Bass Strait oilfield developer 3D Oil put out some more detailed financial parameters today to illustrate the value proposition behind its 50% owned West Seahorse project. The development partners will have to spend up to $150 million to produce around seven million barrels of oil with a net present value of $130-140 million, starting in late 2014. A true guide to the value created for 3D Oil shareholders needs to take account of the $44 million committed in May 2007 which will have had to wait eight years for a completed development. Investors coming in now (or those who bought when the market capitalisation was as little as $14 million) are going to be much better off than those who have been engaged from the beginning but too few companies take account of the equity contributed by shareholders when they are trying to demonstrate investment attractiveness.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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