Note to all:
The below figures are NAV valuations and NAV projections, not Share Price projections. NAV is not always reflected in the SP, for an endless list of reasons, and clearly any upside from any future assets carries associated risk. Please also read ‘The Small Print’ at the bottom of each post.
Update (5/3/11):
All, I have updated / improved the chart (early learning)… It’s now a PDF, so better quality image. I’ve also added some extra info on other assets, and a caveat for the Carnaby prospect. I have updated the CoS for Burgman at the Tay interval, as I believe it has increased since success at Varadero. I have chosen 70% from reading around and gathering a general idea, this is not a stated CoS from anywhere official.
Original Post (with updated chart):
Anyone who knows anything about this company, knows that we’re in very interesting times for Encore Oil. They have just spudded two drills, the Burgman prospect on Block 28/9 (same as the Catcher block) and the Cladhan appraisal well on Block 210/30a (both in the North Sea).
The current Share Price is around the 124p mark.
The link below is a print of a spreadsheet I put together which outlines Encore’s assets as things stand on 4th March 2011. This includes existing proven assets from recent drills, and other tangible assets, but also risked values for current and near-term future drills and the Upside potential they all offer.
Encore Oil – NAV – Now (4/3/11) and Near Term Upside
I think you’ll all agree, the upside is quite exciting! And please bear in mind that this doesn’t include a number of things, such as Tudor Rose, new blocks from 26th Licensing round, Gas quantities in the Catcher prospect etc. I have used $15 a barrel, as I believe this is reasonable given the direction of the Oil price at present, the location of these finds, and the quality of oil (light crude).
I’ve also used 60mmb for Catcher in total (or 120mmb OIP @50% recoverability), which is what Premier have estimates. I have a distinct and strong feeling that they’ve under-stated Catcher at 40-80mmb recoverable, perhaps because they’ll want to purchase it at some point!
The bottom line is that this price is underwritten, and there is significant upside from the near term assets alone. Further upside down the line with the possibility of takeover, and other prospects in their portfolio.
The next few weeks are going to be very interesting.
The Small Print
Please note that I am not a financial adviser or even employed in the financial sector and am not providing financial advice. The contents of this blog are from my own research of publicly available data, and any opinions expressed are my own. I trust that you enjoy reading them but you must do your own research or obtain financial advice before making any investment. Naturally, I do everything I can to ensure that the information posted by me is entirely accurate, however, any information provided is subject to the possibility of error, both in fact and interpretation, on my part and for that I can not be held accountable.
Into the world 