07-23-2016, 12:27 AM
Nice piece of work. Thanks. I have one question and a comment: How do you get the "implied probability" of any A7 outcome?
Comment: You may wish to consider the time value of money. Esssentially, you have to put up $49 now. I'm not sure when we get the $45 in Exxon stock, but definitely months. The resource payment could be a long time coming - you have to drill A7, then certify. Certainly could be a year from today, or longer. Drilling and coring there is not easy. What if they lose the well, need to sidetrack, get stuck, etc.? Alternately, you can sell the stock today, get $49 and invest in something else. An opportunity cost, if you will.
Still, good analysis and presentation.