Friday, January 4, 2013

Geo Energy

Geo Energy: Jim Rogers has entered into an agreement with Executive Chairman Charles Antonny Melati, granting to Rogers a call option over 2m shares of Geo Energy. The exercise price is $0.35/sh, with exercise period of 10 yrs, commencing 1/1/2015. Bloomberg option valuation model values the option at an estimated $0.54 each, which translates to a total value of $1.08m for the deal. Note that Bloomberg assumptions may be on the aggressive side, as it assumes historical volatility of 100%. Reducing volatility assumption to 40% results in the warrant value dropping to $0.39 each.

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