Monday, October 1, 2012

Random Back-of-The-Envelope Calculations Regarding Oasis Following the XOM-DNR Deal

Updates

Later, 12:50 pm: base on first comment, the original post should look like this, with updated "net acreage" per most recent Oasis corporate presentation --

According to my database this is what I show for Oasis:
  • West Williston: 204,000 net acres
  • East Nesson: 108,000 net acres
  • Sanish: 8,000 net acres
West Williston at $7,000/acre --> $1.43 billion
East Nesson: at $20,000/acre --> $2.16 billion
Sanish: at $15,000/acre --> $120 million
Total: $3.71 billion

Oasis: market cap -- $2.9 billion

1.3 x $2.9 billion --> $3.7 billion

Wow, that's amazing. I didn't change a thing but reflect the current "net acres." Note the two numbers in red, bold. Again, as noted below, I did not work backwards; I just went down line-by-line to see what would fall out.

Original Post

According to my database this is what I show for Oasis:
  • West Williston: 201,265 [prev191,716 net acres (up slightly from 191,552, last report)]
  • East Nesson: 97,956 [prev 102,786] net acres
  • Sanish: 8,409 [prev 8,729] net acres
West Williston at $7,000/acre --> $1.4 billion
East Nesson: at $20,000/acre --> $2 billion
Sanish: at $15,000/acre --> $120 million
Total: $3.4 billion

Oasis: market cap -- $2.9 billion

1.3 x $2.9 billion --> $3.7 billion. 

(Note: I did not work backwards on this. I simply went down line-by-line to see what would fall out. It is amazing how nice the "law of large numbers works out.")

4 comments:

  1. Bruce, what is the "1.3"?

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    Replies
    1. The "1.3" is the 30% premium that a likely takeover bid would require. An acquirer would offer a 30% premium to the current market cap to encourage shareholders to approve a buyout or merger.

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  2. They have 204,000 (West Williston), 108,000 (East Nesson), and 8,000 (Sanish) totaling 320,000 acres according to their September presentation.

    http://www.b2i.us/Profiles/Investor/Investor.asp?BzID=2011&from=du&ID=61227&myID=11687&L=I&Validate=3&I=

    ReplyDelete
    Replies
    1. Thank you. I missed that; I simply can't keep up. Smile. I really appreciate you taking the time to comment.

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