Hey all,
I posted this over at Yahoo finance's message board, but figured I should post it here to. I did a rough calculation of what BQI is worth. Please give me any feedback on my model so i can refine it. Thanks
Assumptions about pricing: BQI is an exploration company and not a production company. These are only explored reserves and disregard all other land and operations that BQI has. Price is for a buyout and doesn’t necessarily reflect the company’s current intrinsic value.
BQI has the following reserves
P90 1.117 billion barrels of in place bitumen
P50 1.340 billion barrels of in place bitumen
P10 1.547 billion barrels of in place bitumen
We know that Western Oil sands was bought out by Shell for $5.56 billion and it had 2.6 billion barrels of proven reserves. Thus they paid $2.14 per barrel of in place bitumen
so we then can extrapolate that BQI should be worth
P90 =$2,388,661,538.46
P50 = $2,865,538,461.54
P10 = $3,308,200,000.00
We know that BQI has about 260,000,000 shares fully diluted so thus the share prices should be
P90 = $9.19
P50 = $11.02
P10 = $12.72
However, oil prices have risen significantly since the Western Oil Sand’s buyout. We also know that Alberta is imposing a new tax on the oil sands producers. So let’s be aggressive and assume that BQI’s Saskatchewan reserves will go for a slight premium. Let’s say $3 per barrel of in place reserves.
P90 = $12.89
P50 = $15.46
P10 = $17.85
Note that model is only based on the explored land that BQI owns and disregards everything else. Also this assumes a buyout and not production.
Full discloser, I own shares of BQI
