Waiting patienting for investors to take note that SD paid $1.25 Billion for Dynamic which had only half of EXXI's production and proved reserves. With a comparable valuation basis, EXXI would be worth north of $2.5 Billion. Need news catalyst for investors to reassess valuation or buyout by larger oil company.
SD paid $1,500 mln for the enterprise value of Dynamic. At the time of the transaction, Dynamic had daily production of 25k boepd and 1P reserves of 62,500 boe. On an EV basis, SD paid $20 per boe reserves and $51k per boepd daily production.
At ~110 MM boe 1P reserves (June 30 reserves minus ~42k per day production through Jan 31) EXXI would have an EV of $20 X 110 MM = $2,200 mln. Take out net debt of $1,111 and divide by 79.4 mln shares gives a share price of $13.72. Do something similar with production and you get a share price of $16.20.
Plenty of meat left on the bone here. It's not a bargain by any stretch... yet.
Well #$%$, SD paid $1,280 for Dynamic; I was looking at the wrong column in my sheet. The $1,500 value was DOR's estimated EV prior to the transaction. So lop off another 15% from the above target prices to get comparable transaction multiples.