Bob,
Some speculations about helium.
UPR's total production of NG is 6 Mcfd right now.
In a year they will need 35 Mcfd to process for helium.
30 productive wells have been mentioned, so drilling at least 50 seems reasonable.
My estimate is then about 1 Mcftd/ productive well.
Assuming 4% helium gives 40 000 cfd, which is roughly 1000 m3 a day.
I have seen enduser prices advertised in Germany of DM10- DM20 per m3,
which is roughly $5-10 per M3.
My guess is that UPR may get about half, assume $3/m3.
What will a producing well then be worth? Another guess: Raw gas half, i.e. $1.50/m3,
which finally gives $1500/day for the helium.
With 35 wells, UPR should be making a profit of around $50000 a day, about $20 mil a year profit from helium alone.
What about the other 96% of the gas? I guess most of it will used to generate the neccessary energy for the cryogenic processes,
but there may be some good profit made from the LNG as well.
Basically, I think the NG will pay for the helium extraction.
What about NAMX?
Assuming a split with UPR of the $1500 per day and well profit,
the potential revenue would be 50% of $1500 a day times 30 wells.
That comes out at over $8 mil a year. Main cost is the financing of the drilling. Estimate: $0.5 mil per well, total $25 mil.
Interest and amortization 16% gives 4$ mil yearly.
Remains $4 mil a year.
Assuming 25 mil shares and a PE of 15 finally gives a target of $2.4 a year from now.
Sounds too good to be true? Sure, but help me revise the calculations,
I'm just speculating, using whatever little info I have.
If we have accepted that there are wells and a drilling program, then it's time to start to try to figure out what things are worth.
If it's been established that the shares HAVE a value, then the next step is to find out what that value could resonably be.
Any thoughts?
ps
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