Henry,
With 3.68 million shares out.. the sales of 10 mcf/d at 2.16, and with an estimated 40% interest to Royale (investors and land owner the other 60%), that would give about $3,150,000 to Royale over 12 months, or about 86 cents a share of extra income. That's significant. They have expenses of many types, but they should clear anywhere from 15 to 25 cents per share.. looking back for clues to answer your question:
For 1996 they did 34 cents a share, and a P/E of 11.4
For 1997, they have done 36 cents on the trailing 4 quarters, with the fourth quarter and annual yet to be announced, with an estimated P/E of 9.7 and a full year estimate of 40 cents.
Estimates for 1998 are earnings of 60 cents a share, with a PE of 6.5 and that was before this last news release of their big discovery. Adding 15 cents gives a 75 cent year, and a conservative PE of 10X would yield a stock of 7.50, 25 cents added gives 85 cents x PE 10X and a price of 8.50.
But if the market assigns a PE of 17.9 like they once carried, then the math says it is a 16 dollar stock.
In short, the strike is significant to the bottom line, but will vary with Royale's interest in the well, their expenses, performance of other projects, and the valuation of the market. It's definitely good news.. :-)
Wayne |
