estimated valuations

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estimated valuations

Post  Ricky ( Dross ) peters on Sun Nov 14, 2010 3:31 am

this is the more pessamistic of the two .. and also more realistic

Spangle93 - 13 Nov'10 - 18:20 - 3494 of 3503

First, to re-prove what was already known.

At year end, NSAI estimated
Proved oil+condensate = 0.08 MMbbl
Proved gas = 4.4 bcf

Probable oil+condensate = 0.9 MMbbl
Probable gas = 16.4 bcf

We are told production in 1Q was 197 boe/d, mainly gas. If you assume constant production rate in 1Q10, and all gas, 0.1 bcf was produced, which reduces the proved gas to 4.3 bcf by end 1Q.

NSAI used equivalent of $16.72/bbl in the ground, $2.87/mcf in the ground, for proved+ probable.

Therefore value in the ground by NSAI = $75.8MM, Cash $8.2, total assets = $84MM

Number of shares 119.319MM, £1=$1.6

This gives the 44p/share figure that is often quoted.

But NSAI based their assumptions on gas in 2010 being $5.9/mcf and $6.8/mcf in 2011, which is well in excess of actual (oil price estimate wasn't far out)

If we use a value in the ground that I think is more reasonable: $20/bbl for liquids in the ground and $1/mcf for gas (realistic based on time value of money, since they were only producing 1/10th the proved reserves per year), this drops the valuation to 25p/share.


Right, now forward looking. This isn't quite straightforward, because the numbers shown in the presentations aren't consistent, e.g. Tiree is 100bcf on one slide and 150bcf on another, while Las Animas is 180bcf on one ond 108bcf on another..... :-( Note that I'm basing valuations on net revenue interest, not working interest, which is why my figures are about 25% lower than those typically shown.


Bongo: Target of 108 Bcf with 42.24 W.I (30% NRI) = 45.62 Bcf to CAZA.
Verus had interest in 4145 gross acres - let's assume that the Bongo Wilcox was half this size. The Cook Mountain trap is 600 acres (i.e. about 1/3 the size, assuming that Bongo was about half the gross acres), Yegua size not mentioned, so assume it's similar. So NRI 18.6 bcf

Matthys - assume 10 bcf for #1 (Wilcox) and 5bcf for #2 (Yegua)- about 14.3% NRI so 2.2 bcf net

Wolfberry. Each well was targetting 120,000 bbl. 2 wells. You can book reserves in contiguous 80 acre spacing, let's say half of blocks around each discovery are CAZA interest and contain oil. Gross reserves = 1MMbbl, 18.75% NRI, so net 0.187MMbbl

Arran & Tiree, each currently 9.4% NRI, assume a discovery would allow half the projected target size to be classed as 2P. Together net 37.5 bcf and 1.12 MMbbl before halving.

Las Animas (assume 180bcf is correct) NRI = 18.75, so net = 33.75 bcf of which half might be 2P

Lewis 50bcf, NRI roughly 37.5%, so net = 18.75 bcf of which half might be 2P.



If you use my conservative figures, then if all were discoveries, this would add 81.8p of value to each share, and CAZA would be over £1.05

If you use the NSAI figures, which have a significantly higher value for gas in the ground, you can add 171p/share to the initial 44p/share

Again, doesn't take into account remainder of bolmex portfolio, or other Wolfberry wells, or any value from New Mexico.






==========================================================================================================

and now the more optomistic ( we know this is overvalued ) but gives a adea of value if everything was valued at full amount

Jammy-D


I’ve sat and done the figures in a bit more detail looking at all projects as per the recent presentation. The values have been taken from other posts so I’m not 100% on the values I’ve assigned. As I said the last time I attempted this, I want to be corrected and think these figures would be pulled a part by someone who knows what they’re talking about. To add to this, I’m usually inebriated, especially while working so only use this as the ramblings of an inexperienced poster!! So here it is:-

This is the potential NAV of CAZA. For the figures to work, the reserves have to be proven (P1). The values of Probable (P2) and possible (P3) would attain lower values, but I am using P1 for all calculations to give it the highest possible value, just for fun.

1Bcf of gas in the ground = £2,600,000
1 Barrel in the ground is attained a value of £10 by a company when publishing reserves.
1 Barrel of condensate has approx 15% higher value than oil, so £11.50 in the ground.
1 Barrel produced fetches $50 after tax, costs etc so Condensate = $57.50

Caza has 119,319,000 shares in issue according to their web site.

I’ve taken this from their recent presentation and used their figures for the target amount of Gas/Condensate. I’ve used the Working Interest (W.I) to give the percentage of the total target to assign to CAZA for the value. This is assuming that after each drill the target is confirmed and moved into P1, which is unlikely but gives the possible future value based on the amounts targeted.

Bongo:-
Target of 108 Bcf with 42.24 W.I = 45.62 Bcf to CAZA.
45.62 X £2,600,000 = £118,609,920
Divided by shares in issue = 99.4p per share.
(this was pre drill and has been described as significant with Yegua upside)

Arran is targeting 250 Bcf and 88 MMbbl of condensate. The presentation said min 12.5%, but from recent interview 50% was the mentioned figure. This needs to be confirmed but to be sensible I’ll use the 12.5%
12.5% interest gives 31.25 Bcf = £81,250,000
Divide by shares in issue = 68p per share for gas
Add the Condensate to this = £1.06 per share for condensate.

Las Aminas is Targeting 180 Bcf with 25% W,I = 98p per share

Tiree is 150 Bcf and 5MMbl condensate with 12.5% W.I = £1.08 per share.

From above, the NAV is £4.79 . None of below has been factored in.

Lewis is exploration targeting 50bcf.

17 other Louisiana locations mentioned on Stockopedia interview.
Windham is an oil play and not included in this.
Current NAV was 45p so also in addition.
Mattys is also in addition and there’s a permit for Mattys #3 that hasn’t been mentioned in presentations but was granted 2 days prior to Matty’s #2 results. Looking at the presentation, the location of OB is close to Matty’s so it may target the same formation as Bongo.
Links for reference:-
http://www.proactiveinvestors.co.uk/genera//files/companies/caza_presentation__26th_aug__compressed_.pdf

http://www.cazapetro.com/

http://www.stockopedia.co.uk/content/caza-oil-gas-stockopedia-speaks-to-john-mcgoldrick-and-ed-duncan-49902/

http://www.proactiveinvestors.co.uk/companies/news/20036/caza-oil-gas-are-ready-to-roll-out-project-after-project-for-some-time-yet-20036.html

I don’t profess this will be the value in the near future, but hope it highlights the massive upside from here and when some of us post this is cheap still, then you can see why. I’ve invested in CAZA and I’m not trading them. I will top slice, but am very much here for the long term.
Hope this helps some to see the future here. The projects will add value over the next couple of years or more so I am in no way saying the above is ascertainable in the near future.
DYOR etc etc.

Ricky ( Dross ) peters

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Caza oil is def going places

Post  adds78 on Sun Nov 14, 2010 2:03 pm

Hi all ive been investing over the years in small oil co,i started trading in 2008,1st buy was on tip from passanger at work,mxp brought 10k at 10p£sold after the spike at 26p so so happy,been in and out a few co,i have been recerching caza for about 2 mth,first buy was at 32p only 5k then 5k more at 42p just sold 10 in my isa in xel at massive profit it makes me sick still hold a few just in case,right caza has good partner and huge upside so going to buy,i read iii but dont post,going to build a postion hoping for between 52/55p starting tomorow ill sell half at £1.10 target and hold the rest for 3years,as you can all see on profile,im a mini compared to you guys,but i got a good eye for shares,i do see this as med risk with massive reward,id like to thank mr dross and many others for posting realy good recherch for every one,good luck i dont think we will need it but who knows

adds78

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Updated valuation figures

Post  csbcsb on Tue Nov 16, 2010 3:15 pm



Above is my spreadsheet valuation, far easier than narrative. I follow the AIF + impact prospects method as first valuation below, I ignore cash raised (as it is needed to fund the bolmex prospects) and other odds and sods across the portfolio. Shares in issue are 119,319,000 + 26,502,000 exchangeable shares in Caza Petroleum held by management + 45,000,000 shares to be placed = total 190,821,000.

I've used working interests, oil price of $12 and gas price of $2. I've stuck with the gas price derived from the NPV10 in the AIF ($49.3m/25.6BCF), the current price is around $5 and the AIF projections are slightly higher but don't forget it's discounted. Interestingly the Q3 MDA shows the operating netback for the 9 months YTD is $3.57 compared to $2.95 last year. The AIF figures come out around $4 undiscounted ($101.8m/25.6BCF). Also the company is moving forward much quicker - this means discounting should be lighter so I do think the $2 is reasonable.

Back to the figures, most estimates comes from the placing RNS. MM2 and Bongo are P1+P2+P3. Windham comes from the August presentation figure of 6,290 mmcfe = 1,048 mbbl oil. Arran/Tiree/Lewis are best estimates from the placing RNS. Las Animas is the 180 BCF mentioned in the presentation assuming a farm-out leaving 25%. The AIF gives some NSAI figures at June 2007 but I don't know how good these are.

In conclusion, Bongo, MM2 and Wolfberry if proved up would give a base of 52p. As we know, the upside on the bolmex prospects is enormous, Arran gives 32p, Tiree 14p, Lewis 15p. Given we now have 25% of Arran/Tiree and will retain 50% Lewis the shareprice fall on the placing announcement may be long forgotten! With the bolmex prospects we could get over £1, I get to £1.12 above. Then there's the Las Animas prospect in Texas which would add another 30p if successful.....

csbcsb

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