Canadian Oil & Gas Companies Message Board

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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: SofaSpud who wrote (370)	10/7/1996 7:15:00 PM
From: Kerm Yerman	of 24935

David, With share price at $1.35, stock price is exactly 3X cash flow for year ending Nov 1996. They would appear to be reworking wells to increase cash flow along with a drilling involvement in a few developement wells. Am I right? I'm guessing this to be the case for they appear to be working within their cash flow. That's o-k, for most companies would be taking the route to dilute shareholder value with private placements or public offerings. Because of the limited shares outstanding, it won't take much in terms of added production to keep shares increasing in value. I like that. The cash flow to share price ratio is about right for this stage of company developement. As they get more aggressive, the ratio will work higher. Are they the operator in their activities. I notice they carry a 40% average WI in total wells drilled to date. Do they mention who their joint venture partner is. Last, is there any mention of undeveloped acreage. If they have eliminated their debt, they will be in great financial position to make a bold move. I would estimate they can get $1.5 mil in loans based upon anticipated cash flow for 1997. That amount coupled with a new equity offering of units, common shares (2mil shares) and warrants (Equivilant to 1mil shares) would result in a total of $6.0 mil. to work with based upon $1.50/share value. What an impact that would have on the company if funds were used wisely. Even with 5.3mil resulting shares outstanding, it would also bold well for the shareholders. Small investment here might result in a good return in a couple years. I would like to review background of officers and even backgrounds of directors. This would allow me to guage where they are going. The press release I referenced for Wolverine Energy is even more interesting to me. Can't wait for you to run that info by me. Thanks for taking the time and making this effort for me and the others at this location. Really appreciate it.

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