04-26-2015, 03:31 AM
The company can also be valued based on the value of its acreage. According to a recent article in Reuters, land in the oil-rich areas of the Vaca Muerta and Agrio shale plays is currently being sold to the oil majors for between $5,000 and $15,000 per acre. This means that Madalena's holdings in the Vaca Muerta shale alone could be worth as much as $600 million to $1 billion. This is several times the company's current valuation. Land in gas-rich shale locations in Argentina are attracting offers as high as $5,000. Therefore, if we assume that Madalena Energy's acreage in Argentina is valued at an average of $5,000 per acre, then this values the company's land holdings at $4.75 billion. This excludes the company's holdings in Canada completely. Given Madalena Energy's total enterprise value of $166.73 million, this could make the company a very attractive acquisition target or represent a very large opportunity for a potential investor.