Lundin Oil (LOILY, LOILB Sweden) Message Board

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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Timelord who wrote (726)	10/5/1998 11:47:00 PM
From: Tomas	Read Replies (1) of 2742

Libya: RSO/Lundin are supposed to have been offered US$50 million recently for a 25% interest in Block NC-177. That equals US$2 million per percent of the Block. Back in June the project manager, Alex Schneiter, said he expected bids at this level. But now, 4 months later, they want 50% more = $3 million per percent. Two more wells have been drilled since then, and the original 84 million barrels of oil have unofficially increased to around 120 million barrels. The geologists are convinced that the reserves in En Naga North are in excess of 160 MMB, probably more. $2 million per percent, Red Sea Oil has 60% = US$120 million. There are 41,7 million RSO shares outstanding ---> US$2.88/share = CAD$4.47/share. Red Sea Oil's last trade today: CAD$1.08 (bid/ask 0.95/1.03). So, $2 million/percent = a total value more than 4 times higher than today's market capitalization! Not bad, selling 25% of their interest in NC-177 would give RSO more $ than the market's price on the entire company today. And they want (and believe they can get) 50% more. $3 million/percent = a total value of CAD$6.70/share. Lundin Oil owns 75% of the Block (40% directly and the rest via RSO shares). $2 million per percent = US$150 million. $3 million per percent = US$225 million. Lundin Oils market cap today is US$180 million! What do you say?

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