3SOF

Nelson resources paid US$2.60 per barrel for Chaparral

The transaction will be accounted for as a purchase of Chaparral by Nelson under purchase accounting rules and Nelson will continue to use the full cost method of accounting for its interests in oil and gas properties.

Based on a transaction value of approximately US$23.9 million, the transaction implies a proved reserve purchase price of US$2.60 per barrel.

If NLG pays US$ 2 (just a guess as might even pay less as the oil is still in the ground) for the Zhambai option (according to a PR the two off shore blocks have 1.7 Billion of recoreveble oil) they will need to pay 3.4 Billion.
Total reserves will go up from 220 Million now to 1900 Billion suggesting a market cap of (7 $US per barrel *1900 M barrels) = 13.3 Billion, taking debt/share increase of lets say 1.8 Billion shares to finance the purchase into consideration would give NLG a 13.3 Billion $US market cap / 1.8 Billion new shares plus 900 M already outstanding would give us a price per share of 4.75 $US or 5.7 CAD$

comments please

Nelsoninvest

Hi Michael

Thanks for the great info!!!

Nelsoninvest

Hi everybody, I am new to this board.

Has anybody an idea on what the direct added value will be if the Zhambai option is
successfully exercised.
The value of these new (at let's say 7US$ a barrel) reserves will lift the market cap into the billiions. Can I then conclude the markt cap will increase  by the value of the new proven reserves - the cost of the option and other related costs

or is that all to simple, some companies such IVH do not even make money and are only valued on what is in the ground

25% participatory interest in Zhambai LLP (a wholly owned subsidiary of Kazakhoil, the predecessor of KazMunaiGas), which holds a licence for the exploration and production of Zhambai South and South Zaburunye blocks