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Non-Tech : Spark"s Play Pen

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From: Spark	10/5/2006 11:27:10 AM
	of 6175

CGHI..a fellow trader played with the nr's a little: Ballpark valuations: In the recent IPO Research Report (see post #511 for link investorshub.com ), Investec worked out the predicted market cap for Arrik Energy, compared to other O+G companies that had floated recently, and relative to their estimated O+G resources. This worked out as an 'average' market cap based on about 15% of potential reserves. They didn't take all the leases into consideration (KItchen and South Kitchen excluded) and the reserve estimates by their own admission were very conservative So I did the same, but based on reserve estimates of all leases of: c.1 billion barrels of oil @ $60 barrel. c. 7 tcf gas @ $5 billion tcf These are 'in-house' estimates by Escopeta, so they higher than the independant estimates, but they have also been working on these leases for 14 years and Bob warthen who is their expert has 40 years + experience in the Cook Inlet and has been right on his estimates for other areas sold off to bigger companies in the past... Scenario One: 100 % of estimates found Arrik Market Cap = c. $15 billion Market Cap equivalent value to CGHI = c. $7 billion CGHI Share Price = $23.00 Scenario Two: 50% of estimates found CGHI Share Price = $11.50 Scenario Three: 10% of estimates found CGHI Share Price = $2.30 So based on only 10% of estimates found we are talking about a potential 65x's increase in share price:) Been adding to my position and looking to get more if I can too....I could see CGHI moving to another exchange etc. in the future....I have my feet on the ground still but I must admit, this could get pretty interesting/ crazy:)

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