RECALCULATION OF MTEI BOOK VALUE
The press release on 5/21 states an approximate book value of $2.85.
The press release on 5/28 provides numbers to use in calculations.
Calculations will be done based on a 20 million public float and
70 million fully diluted.
From the 5/28 press release, net asset value on the 2600 acres
is between $110 million and $180 million, after the mining
and transportation costs are factored in. This is only for the coal
and coal bed methane gas exploitation and does not factor in land
values or any other resource exploitation such as natural gas, oil
and possibly lumber.
Other issues must be included in order to caluculate earnings.
However, MTEI is a small company and will have a competitive
cost advantage in their industry.
No prime indicates calculation with 20 million shares. The
prime (') indicates calculation based on 70 million shares.
STEP 1 - Book Value
A1 low = $110 million / 20 million shares = $5.50
A1 high = $180 million / 20 million shares = $9.00
A1' low = $110 million / 70 million shares = $1.57
A1' high = $180 million / 70 million shares = $2.57
A1 = Book value at 20 million shares.....$5.50 and $9.00
A1' = Book value at 70 million shares.....$1.57 and $2.57
Step 2 - Resources underestimated from 0 to 25%
Now if USGS estimates as stated are somewhere between 0 and 25%
underestimated, this would give us a new book value range of:
A2 range.....$5.50 and $11.25
A2' range.....$1.57 and $3.21
STEP 3 - Factor in industry multipliers
For Oil and Gas concerns not showing a profit, industry averages
indicate a price to book multiplier of 1.5 (multiplier of 3 for
profitable companies). To bring the book value in line with
industry standards, multiply both ends of the range by 1.5.
A3 range.....$8,25 and $16.87
A3' range.....$2.35 and $4.80
===============================================================
Now the 8000 acres, which is a little over 3 times the size of the
2600 acres. Let's round down to 3 for easy math and understanding
that we won't know reserves until Stag completes it's surveys. We
make calculations assuming similar coal and coal bed methane gas
reserves are within the 8000 acres and again not factoring in
any other exploitation.
STEP 1 - Book Value
B1 * 3.....$16.50 and $27.00.....20 mil
B1' * 3.....$4.71 and $7.71 ......70 mil
Step 2 - Resources underestimated from 0 to 25%
B2 * 3.....$16.50 and $33.75
B2' * 3.....$4.71 and $9.63
STEP 3 - Factor in industry multipliers
B3 * 3.....$24.75 and $50.61
B3' * 3.....$7.05 and $14.40
So adding both the 2600 acres with the 8000 acres, we would give
the following book values:
STEP 1 - Book Value
C1 = A1 + B1.......$22.00 and $36.00.....20 mil
C1' = A1' + B1'.....$5.67 and $10.28.....70 mil
Step 2 - Resources underestimated from 0 to 25%
C2 = A2 + B2.......$22.00 and $45.00
C2' = A2' + B2'.....$6.28 and $12.84
STEP 3 - Factor in industry multipliers
C3 = A3 + B3.......$33.00 and $67.48
C3' = A3' + B3'.....$9.40 and $19.20
===============================================================
These numbers are based on stated and extrapolated coal and coal
bed methane gas reserves in West Virginia properties alone. This
does not factor in other exploitation of the properties which
the company expects to pursue within every letter of the law.
Also not factored into this book value are additional properties
and company acquistions that will be paid for out of the 50
million restricted shares. Think of those shares like a credit
card!!!! Remember, while energy prices remain at 15 year lows,
the company will remain in acquisition mode. Any further
further acquistions will only add to the book value,
simply look at the above calculations that were fully diluted.
And all for .50! IMO, MTEI is VERY UNDERVALUED. I'm banking
on MTEI and that's the facts JACK.
Have a prosperous day.
Tod
It's best to know Jack.
Uselton that is. |
