Tomco Energy Share Discussion Threads

[gb234] 29/2/2012 11:04

I bet you derampers are really pleased that you didn't buy loads of these at 1.5p and less.(I am so sad that I did). :)

[rmart] 29/2/2012 10:47

lol, nice picture.

[fumanchuchu] 29/2/2012 10:46

rmart - 29 Feb'12 - 10:32 - 20983 of 20984

I have a pure hunch, nothing more nothing less, that Total have taken a bigger stake (majority maybe) in Red Leaf and that TOM's leases will be swallowed up in the deal.

[cuthbert cuthbertson senior] 29/2/2012 10:10

And r mart stays shtum!coward

[cuthbert cuthbertson senior] 29/2/2012 08:17

FROM BLUE TO GREEN AND SOON INTO THE RED LIKE BLOODY TRAFFIC LIGHTS CEPT NO AMBER

[gb234] 29/2/2012 06:34

Pretty poor deramping here when all that they can come up with is 'boiler room scam',not a bright lot these derampers.

[sir rational] 28/2/2012 23:17

Skiboy10 - 28 Feb'12 - 23:14 - 6897 of 6898
...clearly a boiler room scam.

[skiboy10] 28/2/2012 23:17

I'm just a long term shareholder. No more. And you don't even know me so not sure why you'd be so aggressive.

[sir rational] 28/2/2012 23:15

Is he your boss?

[skiboy10] 28/2/2012 23:14

Chris Brown of ex-London Mining has invested over £4million of his own money. Two Monaco based hedge fund managers both invested a £1 million each of their own money. Yes clearly a boiler room scam. Get real.

[rmart] 28/2/2012 23:12

Ok cheers, excellent research.

[sir rational] 28/2/2012 23:10

Invest here if you'd like to lose your shirt

[sir rational] 28/2/2012 23:01

Boiler room scam

[yarisverso] 28/2/2012 21:43

There is no sting. He is one of the tozzers. As is Harrissen, R 2 D 2, FuManChuChu, Sir Rational. This is the derampers BB. try this:-



Email update from a hedge fund analyst on Wall Street (many of you will be aware of from previous)

The following is a summary of my updated valuation exercise for TomCo Energy. The contents of this email are entirely my own thinking and express only my own opinions.

Spot WTI crude ended the day. February 23rd, at $107 per barrel. Plugging that price into my DCF model spits out a valuation of 23p per share. I think it's important to recognize how much the valuation of TomCo moves with these higher oil prices. Each $5 change in the long-term assumed oil price equates to 2.5p per TomCo share. For fun, if oil were to spike to $150 per barrel, then we would be at 40p per share. Actually, a linear extrapolation of my model would produce a NPV of 46p, but I assume that costs rise significantly along with rising oil prices, (which is not necessarily the case by the way).

The other key assumptions are as follows:

Cost per barrel rises to $44.5 per barrel in the initial years of no production, (from $38 per barrel in analyst models) then is flat for the life of the project. And, I assume that the long-term oil price is fixed for the life of the project. Flat costs and prices are more conservative than assuming, like many analysts do, that both costs & realized prices go up by say 2% per year. Escalating both costs and prices makes the margin go up each year.

Instead of first production in early-to-mid 2015, I assume only one capsule is completed in all of 2016, RL is probably expecting first oil in mid-2014, (my guess, not the company's). Just 1 capsule in 2016 compares to the 6 annual capsules that are expected to be reached in the first stage of growth. In addition, I incorporate a slow ramp-up to max production levels. My model has peak annual production in the year 2023, 8 years after first oil. The assumed project life is 20 years, (from 2016) over which ~90mm barrels are assumed to be extracted. 90mm barrels would be 74% of the 123mm barrels identified by SRK.

My model has a 40% contingency on cap-ex and includes $5mm per year of annual maintenance cap-ex that is not included in other analyst's models. Fully diluted shares in my model are 1.725 billion, which assumes a pro forma issuance of 215mm shares at 3.5p each later this year. Finally, and importantly, my 23p valuation at spot WTI of $107 utilizes a 13.5% discount factor. Emerging oil sands projects in Canada are routinely valued with 8%-10% discount factors. The 13.5% rate is an average of 12% and 15%. I strongly believe that if a super-major signs on with Red Leaf, that the discount factor should be 12%, not 13.5%.

Not included in my model is a combined $6 per barrel of margin, (still a conservative figure) for possibility cheaper transport options AND realized prices at a premium to the prevailing WTI price. Both of these outcomes are reasonably likely, but not in my base case. Needless to say, if I were to add $6 in margin and use a 12% discount rate instead of 13.5% and the $107 per barrel long-term oil price, the NPV jumps higher, to approximately 33p from 23p.

Where should TomCo trade vs. the 23p DCF derived NPV? A lot higher than 1.7p. If after a super-major official signs on with Red Leaf TomCo were to trade at a 75% discount to NPV, that would equate to a price of about 6p per share. Said another way, TomCo's current share price is only ~7.5% of its NPV (13.5%, $107). Over the next 2 years, I envision TomCo's discount to NPV declining significantly. 2 years from now, TomCo could be trading at 33% to 50% of its NPV (10%), or 13p-20p per share. This leads me to believe that TomCo will probably be taken out at a price of 15p-20p per share within 2 years.

[wild_goose] 28/2/2012 21:36

Sir R,

I am a new boy on the block.

Can you tell me about "the sting"

Come back.

[wild_goose] 28/2/2012 21:34

Calmm down guys.

$1 million get you a plot.
Just the way it is.

Are posters saying we don't own the mineral rights to the plots.

Forget Chevron, they will be investing billions in the deep water offshore fields, not small nuts like this.

[sir rational] 28/2/2012 21:25

Time to sell if you want to salvage anything from this sting

[cuthbert cuthbertson senior] 28/2/2012 21:23

Rmart you must be really thrilled with your ramping mates, this was set to above 2p if your mates had refrained from selling