The discounted future cash flows based upon year end prices for oil and gas worked out to $2.7 billion. The pv 10 before taxes was $4 billion. I did a reserve analysis to try to factor out some of the risks and acquisition(lifting and extracting) costs. I agree the future price of oil is critical but trying to measure VPI on a reserve basis compared to competitors even taking into account significant discounts leaves me with the feeling VPI is undervalued. I am often wrong.
I like your work and agree with your conclusions. I am often wrong also, but this stock looks very undervalued compared to it's peers. As distasteful as the swap of restricted stock for out of the money options was, it does provide additional incentive for mgt to get the price up; I believe the rating agencies will recognize the improved balance sheet after the 1st qtr earnings are announced and will upgrade the debt. A share repurchase plan would make great sense at these price levels. An LBO is very doable IMHO. Cheers!