This is one of the companies that are trading at cash (and it's an OIL company!)
With recent sale of its working interest on Barnett Shale project, the company fully received $30M in cash (after $6M deduction for unpaid liabilities). With this cash amount, the company also paid off entire debt ($18.8M) that it had.
Currently, the company is holding about $15M cash and its oil reserve:
- 1.5M barrels of proven oil
- additional 5M barrels of probable and possible oil
The company is trading at $0.35 x 41.7M shares out = $14.6 market cap .
This company is trading at $14.6M when it has $15M cash (with no debt) AND 1.5M barrels of proven oil AND 5M barrels of probable + possible oil. In addition, the core project (Water Flood Project) is at the later stage of development (in order for the company to produce oil, it needs to have 5 wells - 4 for injection and 1 for pumping at the minimum, the company completed 2 injection well and 1 pumping well). Once it completes the last 2 injection wells, it's ready to produce oil.
According to 3rd party analysis, the future cash flow for its core project (with discount rate of 10%) is estimated $66M (this amount is for proven oil ONLY, if the company considers 'probable' and 'possible' oil amount, it is estimated to be $276M in total).
In addition to its core project, the company already generates oil revenue from other properties that it owns. For example, in last 6 months, the company generated $1.1M.
This company is definately lack of public exposure, but once its core project is completed, the price of company will be in line with its value.
$0.455 (08/05/08)
