Book value is simply net worth (assets minus liabilities) as stated on the company's filed financial statements. Divide that number by the number of shares outstanding, roughly 18 million in OMAG's case, and you get the book value/share.

Market value is what the market, i.e., investors, value the shares. So as of the close of business Thursday, the book value of the company was roughly $20 - $25 per share (we'll know the exact figure early next week). But since the market only agreed to pay $2.60/share, the market only believes our company is worth $2.60/share (or roughly $47million). The real value is well over $400 million.

Not sure why Oiler thinks correlation between market and book values is "debatable". But will agree a big driver of market value is how the market (i.e., investors) perceives profitability and growth prospects in terms of both sales and profits. Some companies have material "goodwill" assets which "inflate" book value. Depending on the nature of that goodwill asset, it could be as solid as a physical asset (say, highly desirable land in tourist driven location) or it could be an estimate of some yet to be received benefit to the company. At any rate, our company doesn't have any goodwill or, for that matter (as far as I can tell) questionable assets on its books. So the addition of this land represents a HUGE increase in assets and not a fuzzy asset. A reputable firm has valued the land in relation to the current selling prices of similar real estate in the area. If the land was valued by a no name firm, I'd be concerned. But that's not the case here. Everything management has done and said has always been on a very conservative basis ... with the exception of being perhaps overly optimistic regarding the TIMING of necessary Omani government action (but that/those issues are now behind us).

From an investor's point of view, we have to recognize that, even in the inconconceivable scenerio that LLC is unable to manage this project, these assets are still very valuable and another management team would, in my view, be brought in to get the job done. The Omani govt has shown it's desire and support to this end and has chosen our company to get the job done. Management is ONLY aligning itself with reputable, world class vendors (from accounting firms, to construction firms, to financial advisors and bankers).

This is not a fly-by-night endeavor. Of course, there will be hiccups along the way, but what endeavor (especially complex ones) doesn't? All this is a long winded way to say that the book value is real and, when taken in context of likely future profits, represents (again, in my view) a bare minimum value of the company).

Getting back to Oiler's (aka, Debbie Downer) comment regarding correlation betwen book and market values. Companies that have a positive recognizable future (subjective, of course) as far as investors are concerned, typically have a high correlation of book value to market value. Successful companies often trade at a premium to book value (that is, stock price is greater than book value). Companies that are perceived as having a poor future typically trade at a discount to book value.

As has been stated a number of times on this board and in private, I believe that the market just doesn't yet believe our story and so doesn't value the company even at book value. My wife and daughters are in this camp (because of all the false starts over the past 4 or 5 years; it's a standing joke to say "When Omag pops ..."). I would dare say this is all about to change.

1. Omani govt involvement (in terms of approvals, etc.) appear to be behind us with no more ministerial road blocks.
2. The land is now an official asset of LLC and Inc.
3. More announcements are expected in the very near future regarding next steps being completed (there are many unanswered questions regarding financing, advisors, etc., but all of these issues have been moving forward in the background). These announcements will drive momentum and reduce uncertainty ... and likely turn more than a few doubters into believers as the market sees that this is for real and moving forward with increased velocity.
4. Management is committed to getting OMAG listed on the NASDAQ as quickly as possible. We all know what this means as to the exposure of OMAG to new investors and the credibility this lends to our company.

As investors receive more information and more confirmation of steps being concluded, the belief in our company will rise and that belief will correlate to a rising market price ... with book value as a backdrop and, hopefully, a floor.

I would ask management to update their latest estimates of the NPV (net present value) of expected future cash flows and release that early next week along with the value of the land. Last I checked, I believe the NPV was somewhere around $450 million? I don't have the numbers with me here. But I believe an update would be very helpful in showing investors the profitability expectation.

Happy Independence Day!