MPO 0.00% 14.0¢ molopo energy limited

1p 2p 3p ...more

  1. 312 Posts.
    Short term trend is positive but look at the bigger picture and you begin to see how much further we have to go...

    interesting times as MPO recovers some lost ground... hopefully it can continue to push higher with much news expected in 2008. It’s worth pointing out that less than 2 years ago companies were willing to pay some $1.38 per gigajoule for 2p reserves while the recent QGC & BG deal has a new benchmark of $1.43 per gigajoule and prices I believe will only continue to push higher.

    Now if we take a conservative approach and use an average price paid per gigajoule of 2P gas of around 80-85 cents/Gj we could get a value of about 218m on 2p current reserves so with a current market cap of about 146m would be very enticing to some (and this only on current reserves)...

    if we use the current benchmark that could be expected if a company was looking at a t/o and you get 365m this is all before we see reserves from SA, China, Qld upgrade and further upgrades in NSW...not to mention our North America acreage that has been providing me with some interesting scenarios and possibilities...

    Looking at some of the aussie coal seam gas plays on a market cap/ 2P basis I have done a few quick calculations and have the following:

    ESG marcap/2P 1.41
    SGL marcap/2P 1.28
    SHG marcap/2p .89
    MEL marcap/2P .63

    MPO marcap/2P .57


    So on current reserves MPO is by no means expensive and in my view the most undervalued CBM gas stock going around....

    The market can ignore the underlying business success for a while but eventually will confirm it... the current market price means little to me at present as I’m looking beyond the next few weeks what is important to me is that the company’s intrinsic value is increasing at a satisfactory rate, delayed recognition of value is in fact an advantage to those that have been busy accumulating during the recent lows in early Jan...


 
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