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Some additional value is also likely to be added from the Argentinean assets; however,
the bulk of the asset growth is likely to be the North Sea.
We expect the stock to begin to react to the upcoming drilling program, and the
anticipation of large production volumes and cash flow in 2008. As these potential
events are becoming near-term, we are raising our price target to $7.50 and are
maintaining our BUY recommendation.
McDaniel & Associates to 2005, Ryder Scott thereafter, Constant Pricing, Before Royalty (Argentina 12%, U.K. 0%)
Gas converted to oil at economic equivalencies, in 2004 at 5.0:1, 2005 at 49.9:1, 2006 at 38.5:1
Source: Company Data and Octagon Capital Corporation
Constant Forecast
2006 2006
Oil and Gas, P+P, PV 10% $34.1 $119.2
Working Capital $55.4 $55.4
Net Asset Value $89.5 $174.6
Shares Outstanding, Basic 87.1 87.1
Asset Value per Share, Basic $1.03 $2.01
Proceeds of Dilutive Instruments $36.3 $36.3
Shares Outstanding, Fully Diluted 101.0 101.0
Asset Value per Share, Fully Diluted $1.25 $2.09
Ryder Scott, After Taxes
Forecast Pricing Includes Causeway and Fyne & Dandy Fields
Source: Company Data and Octagon Capital Corporation
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