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Gold/Mining/Energy : Teton Petroleum (TTPT) -- Russian Oil
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To: Sleepman who wrote (45)9/28/2002 9:50:46 AM
From: Ed Ajootian   of 115
 
Dan,

The macro issues are the least important for this company. The most important is whether they can lower their production costs to a point where their play becomes economic. At the rate things were last quarter ($11/bbl. to produce) the play is barely economic.

They hired a new guy to run the field operations in August, a real oil guy, and hopefully he is succeeding in getting things in line.

Also, the increased production recently announced should help lower costs per barrel due to economies of scale.

The biggest impact that any macro issues would have on the company is the extent to which the higher world oil prices induce the Russian government to relax its export quotas, which would allow Teton to export more oil vs. sell it domestically in Russia. The domestic price for oil in Russia is something like 1/3 of the current world oil price (i.e., about $10/bbl.). In the quarter ended 6/30, Teton was able to export only about 35% of its oil. If this goes up to, say, 50%, their bottom line would go up immensely.

My broker says Howard has started to buy a little of the stock on the open market (about 12,000 shares I believe). This is largely symbolic but is a great sign IMO.

This would be a great time to average down IMO. The key is to make sure you buy under the $.41 mark, which is the price at which about 6 million warrants are outstanding.
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