HITSGALORE.COM (HITT) Message Board

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Microcap & Penny Stocks : HITSGALORE.COM (HITT)

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To: Q. who wrote (4315)	10/3/1999 8:54:00 PM
From: Daniel Chisholm	Read Replies (1) of 7056

Here's another inconsistency. With the recent increase in the price of oil and gas, the production on these leases created a cash flow of over $1.5 million this past month. ...$900.0 million Promissory Oil Production Note... a cash flow of $1.5M per month is $18M per year. Assume the well lasts forever, and use a discount rate of 5% (ha!), and you might argue that these cash flows have a Present Value (i.e., are worth) $360M. (Of course a more reasonable analysis would look at free cash flow, probably reserve life, and use a discount rate more like 15% -- this would value this oil resource at far less than $360M, say, on the order of $100M!) The information that LFT has given seems to contradict their assertion that their Production Rights are worth $900M. - Daniel

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