Niko Resources Ltd (NKO.TO), which fell more than 2% to near a
year low $21.38 on Wednesday, reported a reduction to its reserves.
Total proved plus
probable reserves are 377 bcfe. The after tax net present value,
discounted at 10% (NPV10) equates to $674 million or $13.05 per
share. These values assume that D6 natural gas price will remain at
$4.20 per mmbtu net until March 31, 2014. However the Government of
India is currently considering increasing
price for the F2013 and F2014 periods. A price increase during
these periods to $8.00 per mmbtu net would increase the NPV10 to
approximately $15.89 per share.
In addition there is significant upside from contingent resource
discoveries at D6, NEC 25 and Block 5c. The contingent resources
are not reflected as reserves because development plans have not
been finalized with government authorities.
These discoveries are expected to deliver an NPV10 of
approximately $15.00 to $18.00 per share assuming developments
proceed as currently planned. This value has been determined based
on internally determined 2C contingent resources using price
derived from the company's third party reserve report. In the
aggregate these discoveries are expected to add approximately 600