Oil Search says resources rose significantly

[sageo]

What's happening with Oil Search raising estimates is what most likeky will happen to Interoil's acreage . Thus smart money will dissent .

JFT - Good evening to you . As I was about to go into my nap this afternoon,I put my 'thinking cap' on again.....I know,gets me into trouble ! Ha,ha. But.....I still can't wrap my head around the OSH announcement about the Muruk well . I know other fine bms have commented on it,but now the news artcle just YELLS at me.

If the Muruk well (2 tcfs) is valued at $14 billion,and A/E at 7-8 tcfs (minimum).  $4 billion....[ with Exxon willing to pay crp up to 11 tcs ] ,why are so many willing to accept such a low-ball offer?  Maybe they just want to give up and go away .( Sorry if I am just "beating a dead horse" . Thanks to you & all for letting me 'vent' a little this evening . Now I'll go have my scotch and water. ....The heart doc said I could have 2 per evening " border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/rolleyes.gif" />.

Sageo - part of that large gap in $'s is simply explained from Economics 101.  You are looking at two totally different valuations as they are "retail" and "wholesale" numbers.  OSH's number for their Muruk discovery is based on what they will be selling ther gas at the retail level (~$7.50 - $8 MMBtu) while the acquiring company, XOM, is offering a wholesale price (~$0.40 - $0.70 MMBtu).  It's how businesses make a profit.  Buy material at a low cost, provide value added parts and labor, sell finished goods at a higher price.

Now you can argue that the ~$0.40 - $0.70 MMBtu has offered is totally unfair but that is a different situation than comparing the retail and wholesale values.

Thanks,Bdahl  .....I understand your point.