I have just moved down under, & have held these for a little while now (they are dual listed on ASX & London AIM). From what I can see they have never had a mention on the forums here....which is a little surprising (to me at least).
A quick summary of GBP:
GBP has a 20% free carry on two wells about to be drilled offshore Kenya, operator is Woodside, with other partners Dana Petroleum (DNX - UK) & Repsol. First well (Pomboo) is due to spud right now.
Has cash of A$6.7m at end September.
Has a stake in FOGL (Falkland Oil & Gas) now worth ~A$24m (and has been dropping rapidly with FOGL share price dropping from 175+UK pence in February to 75p mid yesterday.
They have acreage in Ireland & Malta, but I’m ignoring them as worthless for now - though they are currently shooting seismic in Malta, with potential for farm-in partner RWE to drill next year if something looks good – GBP free carry, but stake reduces to 27%.
GBP at A$131m capitalisation means Kenya is currently valued by the market at ~A$100m (~57c/share). The big question is what is it really worth? If they fail to find any oil, then of course... not a lot.
Merrill Lynch valued Dana's 30% at 89p/share, which equates to approx 75c/share risked for GBP’s 20% stake, so if ML are anywhere in the right ballpark in their assumptions, GBP currently looks cheap (i.e cash & FOGL thrown in for free).
IF the first well (due to spud right now) Pomboo comes in & there are say 1200mboe at 30% recovery at US$4/bbl, that would be worth approx A$377m (A$2.16/share without discounting) to GBP.
On the other hand, if there are 1bn bbls RECOVERABLE (a figure quoted by some), that is approx a whole load more per share….
If Sokwe (2nd well) subsequently came in at 750mboe OIP too, another approx A$1.37/share.
But perhaps more importantly, IF Pomboo were to come in, irrespective of size, the upside is considerably more than that well alone, given that figures of 20bn bbls RECOVERABLE are being banded around (by GBP) for the two blocks in total (unrisked)….20% of that would be very welcome….about A$122/share… nice whatever risking/discounting you apply.
They would probably be snapped up at a nice premium in quick order.
Other factors - Woodside have little to say about Kenya, & have just farmed out 20% to Repsol (presumably in exchange for some share of the drilling costs?).
GBP state “Woodside and Repsol earn their farm-in equity when these two wells are drilled”.
Would they really drill Sokwe if Pomboo is dry?
Directors hold many shares (& options), though there has been some selling recently, so a lot at stake for them...
So all in all, a big gamble on whether the first Kenyan well is successful. I’d expect to see the SP rise nicely in the next month or so in expectation of drilling results.
All IMHO, DYOR etc.