NuTek Inc. (Stock Symbol: NUTK) could quite possibly be the next big
winner of the oil industry. They have developed proprietary
technology in the form of a pump that continues toextract oil from
wells after the traditional oil rigs become too costly to operate.
Traditional oil pumps are effective only when volume of oil exceeds
20 barrels a day. When the production decreases to 5-10 barrels a
day, big companies' pumps are uneconomical. This where TuTek's
pumps come into play. NuTek is not an exploration company, they
simply take over the existingwells. They look for wells that are
producing 5 - 10 barrels a day, called "stripper" wells. By
installing their inexpensive $3200 Bailer Pumps, NuTek can produce
oil for around $2.25 a barrel...THAT'S LOWER THAN OPEC PRICES!
When NuTek acquires the lease on a well they also get the existing
materials and equipment. The piping from the old rigs can usually
be sold for more than the cost of NuTek pump. Hence NuTek can earn
profits even before the first barrel is pumped. The bottom line is
that NuTek can produce oil from low volume wells at the lowest
possible cost. NuTek is always looking to buy wells that big oil
companies forego and because they're often the only interested buyer
they can get a spectacular price.
One company that NuTek has developed a joint venture is Regent Oil
and Gas. Regent has agreed to pay for the costs of the pumps and
lease acquisitions of up to 5000 new wells in exchange for
approximately 60% of the revenue from each joint venture well.
This arrangement allows NuTek to forego the hassle of raising
capital and diluting stock.
For discussion's sake, let's look at some numbers relating to NuTek's potential oil production
operations. At 5 barrels a day, and a conservative $19 a barrel,
NuTek's revenues will be $34,675 from one well
( 5 barrels x $19 x 365 days). After giving 25% to the land owner
and state that number is $26,006. The company can reasonably expect
to bring 61% to the bottom line which is $15,863 profit per year per
well.
Based on the projections provided by the Company when they reach 2000 wells, NuTek's
earnings per share could be $2, and the stock price could hit $30 in
the long run. It seems amazing, but just consider other oil
producers, like Chesapeake Energy (CHK) which went from $3 to $50
in 3 years, or Basic Petroleum (BPILF) which went from 7 3/4 to
26 5/8.
Call any stock brokerage firm for more information. Or contact
Britt Brooks, NuTek, Inc.,
210.769.4146. The symbol is NUTK. |
