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Microcap & Penny Stocks : Benz Energy (BZG.V)
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To: Sleepman who wrote (257)3/26/2000 6:02:00 PM
From: Ed Ajootian   of 272
 
Dan,

In an environment like this, where natgas prices are going up and Benz' production is about to increase substantially, debt is our friend. Debt provides the leverage needed to really increase cash flow as a result of increases to the prices of the commodity. Although most of the present production is hedged, none of the future increases to production are hedged obviously.

The company will not likely be pushed into bankruptcy given that it has survived thus far. The bank could have pulled the plug anytime in the last year or so, but chose not to. Why would it do so now, when they are about to turn the corner and start generating positive cash flow? Also, the note receivable they have obtained from Harken now provides additional cushion to the banks that they will get their money back.

Mark my words, before the week is out this company will issue 4Q numbers and it will be very difficult to find any stock out there for less than C$.15. Then next week or so they will put out the news on the next well and it'll be off to the races. Assuming they get this next well going and then drill another equally good well in the Oakvale Dome, I see no reason why this thing can't get back up to the C$.25 mark, nearly a double from here.

I can understand you're not wanting to chase the stock at this point. Try putting a bid in at C$.12 or .13 for a few days and see if the trade goes off. Hopefully Benz management will cooperate and will hold off putting out the 4Q release until the end of the week.

Re: Taro, I ended up getting out of that several weeks ago and am no longer following it. Let me throw out another biotech for you while we're at it. Ever heard of Ilex Oncology (ILXO)? I bought some based on a Prudential analyst report.
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