Packer16 Posted February 2, 2014 Share Posted February 2, 2014 My adjusted NAV including Solimoes is about $418 million or $0.70 per share. This includes writing down all the Namibian asset which I think you have to do based upon the results. About 185% upside. How are getting 5 to 10x the current price? Packer Link to comment Share on other sites More sharing options...
cameronfen Posted February 2, 2014 Share Posted February 2, 2014 My adjusted NAV including Solimoes is about $418 million or $0.70 per share. This includes writing down all the Namibian asset which I think you have to do based upon the results. About 185% upside. How are getting 5 to 10x the current price? Packer How did you calculate your adjusted NAV? Link to comment Share on other sites More sharing options...
PJM Posted February 2, 2014 Share Posted February 2, 2014 My adjusted NAV including Solimoes is about $418 million or $0.70 per share. This includes writing down all the Namibian asset which I think you have to do based upon the results. About 185% upside. How are getting 5 to 10x the current price? Packer Would be curious to know what assets did you include to calculate the NAV? According to my estimates, Polvo at cost , cash & securities and some other assets is around US$350m. It is difficult to estimate the value of Solimoes and Namibia which can be anywhere between couple of hundred millions to billion. Also this does not include the tax credits which may be substantial and should soon be realized due to revenues from Polvo. Link to comment Share on other sites More sharing options...
Packer16 Posted February 2, 2014 Share Posted February 2, 2014 I used the BV for all assets except the Namibian assets which I wrote down to zero in addition to drilling costs and goodwill. Packer Link to comment Share on other sites More sharing options...
phil_Buffett Posted February 3, 2014 Share Posted February 3, 2014 very interesting Company. i bought a first position Link to comment Share on other sites More sharing options...
phil_Buffett Posted March 2, 2014 Share Posted March 2, 2014 HRT is currently a 10% position for me. Making it a 20% position this week. I dont see much downside risk at this point. Upside is 5-10 bagger josh would be nice to hear from you, how you get to a 5-10bagger value? :) Link to comment Share on other sites More sharing options...
rogermunibond Posted March 2, 2014 Share Posted March 2, 2014 Namibian assets are probably worth more than zero, though on a prudent valuation basis i wouldn't assign any liquidation value to the blocks HRT holds. Five to ten bagger upside implies some kind of oil discovery in Namibia. Supposedly HRT has opened a data room and is looking for a farm out partner. Shell bought into the Orange basin and will be drilling in 2014. http://www.southerntimesafrica.com/articles/9490/Renewed-Hope---Shell-s-return-to-Namibia-raises-prospects-for-gas-and-oil-finds--- Link to comment Share on other sites More sharing options...
phil_Buffett Posted March 2, 2014 Share Posted March 2, 2014 Namibian assets are probably worth more than zero, though on a prudent valuation basis i wouldn't assign any liquidation value to the blocks HRT holds. Five to ten bagger upside implies some kind of oil discovery in Namibia. Supposedly HRT has opened a data room and is looking for a farm out partner. Shell bought into the Orange basin and will be drilling in 2014. http://www.southerntimesafrica.com/articles/9490/Renewed-Hope---Shell-s-return-to-Namibia-raises-prospects-for-gas-and-oil-finds--- thanks roger :) Link to comment Share on other sites More sharing options...
rogermunibond Posted March 2, 2014 Share Posted March 2, 2014 http://www.pancon.com.au/investor-centre/asx/2014/reports/170114.pdf Tullow bought into a block north of HRT's Wingat well that showed oil. The Walvis basin is the focus for oil in Namibia. Link to comment Share on other sites More sharing options...
rogermunibond Posted March 7, 2014 Share Posted March 7, 2014 http://www.reuters.com/article/2014/03/06/namibia-oil-idUSL6N0M31Z120140306 More Namibia news. Murphy Oil and OMV to drill blocks in Orange Basin, north of HRT's blocks. Rumors that Chevron is poking around Namibia too. Link to comment Share on other sites More sharing options...
Josh4580 Posted March 25, 2014 Share Posted March 25, 2014 http://ir.hrt.com.br/hrt/web/conteudo_en.asp?idioma=1&tipo=32124&conta=44&id=189954 So their 6% stake in the Solimoes Basin was sold for $99 million. So HRT's remaining 49% stake is being valued at $808 million (.49* $1.65 billion). This represents $2.735 per share or $6.34 BRL per share pre-tax (295.41 million shares outstanding & 2.32 USD/BRL). That is 6.8 times the current stock price of 0.93 BRL and only one of their assets. If we wrote down Rosneft's value of Solimoes by 80%, this would be a total value of $330 million. HRT's 49% stake would be worth $161 million pre-tax, or $0.545 per share. This would equate to $1.26 BRL per share, or 135% of the current market value. Now how much are their other assets worth? Link to comment Share on other sites More sharing options...
phil_Buffett Posted March 25, 2014 Share Posted March 25, 2014 http://ir.hrt.com.br/hrt/web/conteudo_en.asp?idioma=1&tipo=32124&conta=44&id=189954 So their 6% stake in the Solimoes Basin was sold for $99 million. So HRT's remaining 49% stake is being valued at $808 million (.49* $1.65 billion). This represents $2.735 per share or $6.34 BRL per share pre-tax (295.41 million shares outstanding & 2.32 USD/BRL). That is 6.8 times the current stock price of 0.93 BRL and only one of their assets. If we wrote down Rosneft's value of Solimoes by 80%, this would be a total value of $330 million. HRT's 49% stake would be worth $161 million pre-tax, or $0.545 per share. This would equate to $1.26 BRL per share, or 135% of the current market value. Now how much are their other assets worth? thanks josh. sounds great :) :) :) 8) Link to comment Share on other sites More sharing options...
PJM Posted March 25, 2014 Share Posted March 25, 2014 http://ir.hrt.com.br/hrt/web/conteudo_en.asp?idioma=1&tipo=32124&conta=44&id=189954 So their 6% stake in the Solimoes Basin was sold for $99 million. So HRT's remaining 49% stake is being valued at $808 million (.49* $1.65 billion). This represents $2.735 per share or $6.34 BRL per share pre-tax (295.41 million shares outstanding & 2.32 USD/BRL). That is 6.8 times the current stock price of 0.93 BRL and only one of their assets. If we wrote down Rosneft's value of Solimoes by 80%, this would be a total value of $330 million. HRT's 49% stake would be worth $161 million pre-tax, or $0.545 per share. This would equate to $1.26 BRL per share, or 135% of the current market value. Now how much are their other assets worth? I dont think 6% stake was sold for $96m. In fact the press release does not even provide info on the price of 6% stake. AS per the press release, the amount includes outstanding cash calls. "The total amount refers to the sale of 6% working interest, the transfer of operatorship in their Joint Venture in the Solimões Sedimentary Basin to Rosneft, the sale of four heli-transportable drilling rigs and the settlement of the outstanding cash calls owed by Rosneft until October 2013." Link to comment Share on other sites More sharing options...
phil_Buffett Posted March 25, 2014 Share Posted March 25, 2014 would be interesting to hear how this deal changes packer´s adjusted NAV of HRT. would be nice to hear from you packer, if you read this :) Link to comment Share on other sites More sharing options...
Packer16 Posted March 27, 2014 Share Posted March 27, 2014 I am still getting around $0.90 cents per ADR assuming Namibian assets are worth nothing. Polvo is worth lets say $10/BOE so $230 m, cash of $72 m and Solimos in a range of $174 to $289 based upon a JPM DCF of the project results in a total value of $467 to $591 or $.80 to $1.00 per ADR. The current transaction with Rosneft includes control so there is some premium above the 6% economic interest they purchased. Packer Link to comment Share on other sites More sharing options...
phil_Buffett Posted March 27, 2014 Share Posted March 27, 2014 I am still getting around $0.90 cents per ADR assuming Namibian assets are worth nothing. Polvo is worth lets say $10/BOE so $230 m, cash of $72 m and Solimos in a range of $174 to $289 based upon a JPM DCF of the project results in a total value of $467 to $591 or $.80 to $1.00 per ADR. The current transaction with Rosneft includes control so there is some premium above the 6% economic interest they purchased. Packer thanks packer for your post! :) Link to comment Share on other sites More sharing options...
rogermunibond Posted April 7, 2014 Share Posted April 7, 2014 http://blogs.ft.com/beyond-brics/2014/04/04/namibia-africas-next-big-oil-frontier/ Namibia has until recently been largely overlooked by the oil majors. A spate of farm-in agreements over the last six months suggests that this is changing. International oil companies are keen to secure a stake in the southern African country’s oil boom, should one materialise. Link to comment Share on other sites More sharing options...
tombgrt Posted April 9, 2014 Share Posted April 9, 2014 Was able to buy a position through otc but I sure had to show some patience! Link to comment Share on other sites More sharing options...
gary17 Posted April 10, 2014 Share Posted April 10, 2014 I wonder what would be the catalyst here for this company to realize it's intrinsic value. Thanks Link to comment Share on other sites More sharing options...
tombgrt Posted April 16, 2014 Share Posted April 16, 2014 Nothing really but: http://www.businessweek.com/news/2014-04-15/hrt-founder-seeks-partners-to-explore-for-oil-in-namibian-blocks OTC down 5% again today. Might put in an extra order at the 52-week lows. Link to comment Share on other sites More sharing options...
gary17 Posted April 17, 2014 Share Posted April 17, 2014 Hi Tom so your investment thesis here is that they either find commercial oil in which case this is a multi bagger or they fail, and basically close the shop, liquidate, and the net asset should still be a one or two bagger? Gary Link to comment Share on other sites More sharing options...
tombgrt Posted April 17, 2014 Share Posted April 17, 2014 No I think it's quite unlikely that they find commercial oil at this point. The only upside this asset might give is a renewed interest in the region by the majors which could provide new partners. Otherwise the Namibian assets are pretty much worthless imo. I don't see this being liquidated either. This is a token position on their other assets with a possible kicker. Equity is even hated by all the value guys so it could surprise. Link to comment Share on other sites More sharing options...
PJM Posted April 17, 2014 Share Posted April 17, 2014 I dont see any catalyst except some farm outs in Namibia and the company is trading significantly below its net asset values. However the positives are offset by bad management. I also feel that the company is not transparent and i wont be surprised if there are some sloppy deals behind the curtains. Discovery just sold their large stake as they probably did not want to fight a battle with JG who is looking to control the board and eventually the company. I think minority shareholders will probably loose out. Disclosure: I do have a small position but have to admit that i feel that it may have been a mistake. Link to comment Share on other sites More sharing options...
gary17 Posted April 17, 2014 Share Posted April 17, 2014 I guess I'm confused.... So I still don't see what's the catalyst or reason for the company to trade at its intrinsic value, which based on what I have read here is being approximated as the NAV. Are we saying if there's renewed interest in Africa oil then some bugger player might come along and buy this thing up? I know there's some bigger fund guys that have large holdings of this - I wonder what they are seeing here. Link to comment Share on other sites More sharing options...
Packer16 Posted April 17, 2014 Share Posted April 17, 2014 With its market cap I doubt that large fund guys have a position. One who sold because if the small size was Longleaf. Packer Link to comment Share on other sites More sharing options...
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