A poster on the AOI discussion board from the Swedish forum site Avanza also posted an excerpt about Ngamia from ABG' s research initiation on AOI.

Here is the cut and paste:

"Net pay discovered was in excess of 150m and the early indications are that Ngamia is most likely a billion barrel discovery".

Now, how does the analyst at ABG come to the conclusion that Ngamia could be a billion barrel discovery in it’s own right?

……………………

Here is a little input from the analyst. 36 page long!

"According to a third party report prepared by Gafney Cline and Associates (GCA), the net urisked potential of the Africa Oil portfolio stands at 10 Bn boe, valued at SEK 2,172 per share.

However, these are unrisked numbers, and although the shareprice is unlikley to reach those levels, it indicates the potential upside present in the Africa Oil portfolio"

"Ngamia was confirmed a discovery by Tullow and Africa Oil in May 2012. The discovery lies on the Southern String of Pearls and is located on the border between license 13T and 10BB in Kenya. Net pay discovered was in excess of 150m and the early indications are that Ngamia is most likely a billion barrel discovery.

We currently value the discovery at SEK 4 per share and use the 51 MMboe from GCA’s third party report, but given the sizeable net pay, the size and the valuation will most likely change dramatically over the next few years."

Regards

………………………..

SEK 2172 a share equals …

$333.34 U.S. !! >> H’MMM.

………………………

More from Analyst

In our view, Africa Oil (AOI) offers investors a pure play on what is likely to be a future global oil and gas province where early results have yielded several billion barrel discoveries, both on and offshore. With a risked potential of SEK 100 per share (SEK 2,000 per share un-risked), the potential is significant but not without risk.

But it remains a diamond in the rough

Although the upside in AOI’s portfolio remains significant, the company is a pure play on a emerging exploration province and therefore the risk should not be underestimated. But with Tullow and Marathon featuring throughout its portfolio, investors should take comfort in its quality of exploration acreage.

Regards … January 10/13