2 billion barrels of oil is worth $200 bilion dollars on the spot oil market today. I have no idea what 80 trillion units of nat gas is worth. This much I do know-ROYL just beat out 12 other companies to win a bid for over 100,000 prime acreage on Alaska's north slope- see precious posts with links. Let's be conservative and say that ROYL can extract 5% of that amount. That's 100 million barrels of oil times $100 per barrel(conservative)- that's $10 billion worth of oil for a $70 million dollar company. So ROYL has access to oil valued at over 100 times it's current market cap (not factoring in the 80 trillion bcf nat gas). 100 times current market cap would make it a $7 billion company-subtract $2 billion for long-term exploration and production and you have a net gain of $5 billion just on the oil.
Argue with the math all you want, but would $100/share 5 years from now be reasonable? I think so.
Royale Acquires 100,480 Acres in Heart of Oil Window
Central Position 22 Miles South of Prudhoe Bay Oil Field
Royale Energy, Inc. (Nasdaq:ROYL) today announced that the State of Alaska has posted the results of the North Slope lease sale 2011 in which the company successfully acquired more than 100,000 acres. Out of 13 companies bidding on 178 tracts, Royale won 60 tracts in the heart of the oil window. The company's 100,480 acre position represents 30% of the 334,969 acres leased in this sale.
The company selected the targeted acreage based upon optimal thermal maturity for oil generation in the Shublik shale, known to have sourced the Prudhoe Bay oil field. Additional potential exists in the Kingak and HRZ shale sections. Based upon existing well penetrations through the Shublik, Royale quantified the selection criteria for the desired acreage. "This well control demonstrates the capacity of the Shublik to generate and flow oil," said Mohamed Abdel-Rahman, Royale's VP Exploration. "Our acreage spans over 88 miles east and west of the Trans-Alaska oil pipeline route and is 22 miles south of giant Prudhoe Bay oil and gas field, in the heart of the thermal maturity fairway for oil generation."
Royale's position consists of three separate blocks of contiguous tracts. The western block is adjacent to the Colville River and holds potential for both conventional as well as shale development. The central block is in the midst of an active test program being conducted by a joint venture between Halliburton and Great Bear Petroleum and is near the Trans-Alaska pipeline. The eastern block consists of 40,320 acres known to sit on the migration path of the oil that filled Prudhoe Bay.
"This acquisition has the potential of being a continuous accumulation of oil produced from shale," said Donald Hosmer, Royale's Co-CEO, "providing a large number of repeatable drilling opportunities that can lead to significant and extended reserve growth for Royale Energy."
Royale got 30% of the oil rich land that Alaska put up for bid. There were 13 companies bidding. Why did ROYL get such a large percentage of the total acreage? Stupid, or crazy like a fox?