As per http://www.investegate.co.uk/article.aspx?id=201011011328313839V&fe=1
Latest presentation :-
http://miranda.hemscott.com/ir/mrs/pdf/Interim_Results_170810.pdf
Vital statistics :-
Shares out : 115m (fully diluted 117m)
Dividend paid H1 2010 3.1p/sh
M/cap @ 250p/sh : $460m
Net Debt : $460m (repayable Dec 2014)
EV : $920m
2P Reserves
Entitlements : Egypt 29mmboe - US 25mmboe - Bulgaria 14mmboe - Total 68mmboe
Working interest : As above except Egypt 92mmboe
A good value marker for the Egyptian assets is the Centurion sale to Dana Gas in 2006. Remarkably similar, neighbouring assets with identical fiscal terms, comprising WI 96mmboe sold for $1063m = $11/boe. That would value MRS’s Egyptian assets at $1012m, some $90m more than the present EV of the whole company. There is one difference of note though, in that Centurion’s gas:oil mix was 4:1 vs MRS at 5:1. I should think $90m ought to cover that.
That leaves the rest of the company in for free, as they say……..
Bulgaria - just come on stream at 45mmcfpd. Highly cash generative compared to Egypt. $6.50/mcf vs. $2.65/mcf. Should plateau for 3 years. I imagine cash flow from here is going towards paying down debt due in 2014. On a $/boe basis must be worth more than Egyptian boes. Even at $11/boe that equates to 84p/sh. They also have a gas storage project at the nearby Galata field which could prove a decent earner but is delayed at present because the government wants an independent review.
Explo - Kaliakra East 59 Bcf, 34% COS - deferred for operational reasons.
US - They’re actively looking to divest. You’d think 25mmboe ought to fetch a half decent price but I’m not entirely convinced because MRS don’t seem to have invested very much in recent years. H1 2010 production 600 bopd + 2.2 mmcfd - modest increase expected in H2. Nonetheless, even at $5/boe, that’s equivalent to 68p/sh.
Explo Egypt - current dual seismic campaign primarily looking for Cretaceous oil. Currently drilling SE Dikirnis prospect 1mmbbls + 16 bcf CoS 32%. Rig will then drill 2 development wells on W Dikirnis and then move to drill the aforementioned Cretaceous (5 prospects - 70mmbbls unrisked).
Explo Turkey - drill one well in March 2011 (gross 85mmbbls CoS…
Divestment of Permian Basin Assets
http://www.investegate.co.uk/Article.aspx?id=201012230700104869Y
The divested assets are interests in mature oil field leases located in the Permian Basin in West Texas and East New Mexico. The interests cover three main field areas, namely Artesia, Jalmat Cone and Turner Gregory, together with a number of smaller units. The fields are characterized by having long producing lives with relatively material reserves but with low production levels. The current combined field production rate is approximately 830 bpd of oil and 0.5 MMcfpd of gas and the remaining proved plus probable reserves at year end 2009 were 20.3 MMbbl of oil and 16.1 Bcf of gas on a working interest basis……….
Quantum has acquired the assets for a cash consideration of $80 million
Gadzooks!! that’s less than $4/bbl for 1P reserves !!
MRS’s 2009 Annual Report denotes the unaudited NPV10 of these as :-
1P developed $155m
1P undeveloped $256m
The discounted net present value is not necessarily an indication of realisable market value
You don’t say !!
On the face of it a ghastly result. These reserves are basically reliant on 25 acre spacing water-flood, with production forecast to double in the medium term. At that rate, it would still take 20 years to recover half the reserves, so a fancy price was never likely to be achieved I suppose. Nonetheless, it’s a bit of a choker for investors, albeit the remaining assets do underpin the sp.
No doubt one can’t make a direct read-across for Aminex US assets but the sentiment of this deal doesn’t exactly inspire confidence in what they might be worth, certainly for any NPV10 valuation.
