Carpedia, here is a comparison of the two companies:
HTP will have 29,000,000 shares, fully diluted, after this latest PP is finalized. They have 10.5% (net) in ELH.
KOB has 20,500,000 shares, fully diluted. They have 4.4% (net) in ELH.
Just take 4TCF for comparison's sake, at $1.00/mcf.
HTP would be valued at:
((4,000,000,000,000/1000) X 0.105)/29,000,000 = $14.48.
KOB would be valued at:
((4,000,000,000,000/1000) X 0.044)/20,500,000 = $8.59.
Valuation ratio for HTP:KOB is 14.48/8.59 = 1.69
1.69 X 1.13 = 1.91
All other things being equal, HTP should be at $1.91, if KOB is $1.13.
Based only on expectations from ELH, they are about even at the moment.
Don't forget that HTP has obligations in the Greater San Joaquin (GSJ) venture also, which are not proven at all. These are expensive wells to drill, but success would be richly rewarded.
Only you can decide how the GSJ venture changes your attitude about HTP.
I hope this helps.
Rick. |
