Teton Petroleum Company
Teton Petroleum Company (AMEX:TPE) is a publicly traded independent oil as gas exploration and production company headquartered in Denver. From 1997-2004, Teton produced oil on the Eguryak license through Goloil, a Russian joint stock company of which Teton owned 35%. At the Annual Meeting of Shareholders on July 16, 2004, Teton received shareholder approval to sell the 35% interest in Goloil. The sale was completed on August 3, 2004. Teton became a shell without any operations and approximately $ 18 million of cash. They have been searching for gas & oil operations since then.
***Key Event
On January 10, 2005 Teton filed a SEC Form 8 which is a disclosure of a major event. See below for filing. No Press Release was made. Teton has apparently decided to focus in their own background North America. It is a possibility that the acquisition could be Coalbed Methane (CBM)acreage--my key area of focus for investing. I have no way of knowing this other than the fact the acreage of 138,063 acres is large.
On December 23, 2004 they had filed a SEC Form 8 disclosing they had entered into a letter of intent. So it did not take long to finalize a definitive agreement.
This is a Benjamin Graham Net Net Stock:
Book Value Per Share= $1.97
Cash Per Share = $1.99
Market price Per Share = $1.32
% Market Price to Book Value =67%
% Market Price to Cash per Share= 66%
Bottom line is one is buying cash at a 34% discount.
Shares outstanding=9,121,094
Float = 4.8 million
Insiders hold 47% of the stock
Trades 30,000 shares a day over last 3 months
50-Day Moving Average: $1.50
200-Day Moving Average: $1.85
AMEX Listed----This is key positive for a "energy" company to be listed here. Also traded on Frankfurt exchange: TP9 (Euros)
(they may be in jeopardy of losing AMEX listing with price and lack of operations--with acquisition this would change)
Short position: Shares Short (as of 10-Jan-05): 48.00K (they think that the cash discount will increase beyond 34%?)
Teton Petroleum Co
1600 Broadway, Suite 2400
Denver, CO 80202
Phone: (303) 542-1878
Web Site: tetonpetroleum.com
finance.yahoo.com
finance.yahoo.com
We are on the low end of the three month trading range:
finance.yahoo.com
We are also on the low end of the two year trading range--note $ 4 range:
finance.yahoo.com
H. Howard Cooper, Chairman & Founder
Prior to founding Teton, Mr. Cooper worked for American International Group in New York evaluating potential oil projects in Russia. After leaving AIG, Mr. Cooper became a partner of Central Asian Petroleum in 1993, which developed the Karakuduk field in Western Kazakhstan. That field was later placed into Chaparral Resources, in the process sending that company’s market capitalization above $100 million. Mr. Cooper has a finance degree from the University of Colorado and a Master’s Degree from Columbia University.
Here is the possible catalyst for change in the company--note that they removed all the confidential material--but note the acreage--could it become a CBM company overnight??:
biz.yahoo.com
Form 8-K for TETON PETROLEUM CO 10-Jan-2005
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 5, 2005, Teton Petroleum Company ("we" or the "company") signed a binding definitive purchase and sale agreement with [*] ("[*]") entitling the Company to acquire certain oil and gas leases covering [*] acres in North America. The closing of the transaction is subject to the satisfactory results of a due diligence investigation.
The letter of intent previously executed on December 17, 2004, is being superseded and replaced by the purchase and sale agreement. If the transaction closes, the purchase price for the acreage will be approximately $[*], of which $[*] will be payable in unregistered shares of our common stock, valued at $1.75 per share. In addition, we will issue a warrant to [*] entitling it to purchase one share of our common stock for each two shares of common stock issued to [*] as part of the purchase price, exercisable for a period of three years at an exercise price of $1.75 per share.
The sellers are being granted certain registration rights in connection with the shares of common stock and shares underlying the warrant issued as part of the purchase price. Upon the signing of the agreement, we paid [*] earnest money of $322,354. The cost of the original option paid to [*] was $25,000, and is nonrefundable.
The purchase price for the acreage is subject to adjustment if there are title defects or environmental problems with any of the leases. In the event that the total acres with acceptable title and environmental conditions is less than 138,063 acres, we have the right to terminate the agreement. In such case, the earnest money will be refunded. [*] will also retain an overriding royalty interest in the acreage. The agreement also provides for the establishment of an Area of Mutual Interest with [*] that will give us the right to purchase additional leases acquired by [*] in the Area of Mutual Interest through December 31, 2007. We expect to close the transaction on or before April 15, 2005, provided that the contingencies set forth in the purchase and sale agreement are met.
Summary and Strategy
I have purchased shares as recently as last Friday. My purchases have ranged from a low of $ 1.26 to a high of $ 1.40. The risks are that the above transaction is not completed by April 15, 2005 or abandoned, the market falls out of bed (My Rydex portfolio insurance insulates me from this disaster but not you! lol), etc. etc. Please do your own due diligence and make your own decisions. I was able to obtain the $ 1.26 shares by placing an order below the market price which came to me. |
