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Strategies & Market Trends : Value Investing
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To: Madharry who wrote (25640)1/3/2007 11:27:49 AM
From: fp_scientist  Read Replies (1) of 78670
 
Madharry,

Seems to me that TREF likes to keep a low profile (opposite of PDP) and only releases news on major events. If you contact IR (Sven Engevik +54 11 4814 5556) he will confirm that TREF is already producing 5,000 bopd. Production will go up significantly as they are taking over new acquisitions with existing production.

From the presentation at the Pareto Conference (Sep 06):

trefoil-limited.com

2P reserves are ~24 Mbbl (including their recent acquisitions at Tupungato and Atamisqui). Market cap of TREF is ~ USD 250M. Compare to PDP: 2P reserves at ~18 Mbbl and market cap of ~USD 800M (w/ warrants & options). There is roughly a factor 4 in valuation difference.

Of course, with small companies like these, success relies more on the geology of the fileds and the drilling bit rather than current production or reserves, but I disagree that TREF is expensive compared to PDP. It is the other way around, in my view. For more info on TREF reserves, check the Pareto pdf in the link above.

TREF was focused on Chañares Herrados (CH) which has 2P reserves of ~15 Mbbl and then had this home run in Puesto Pozo Cercado (PPC). They are now focused on PPC which is looking even better than initially thought. TREF has 2 drilling rigs and 2 completion/workover rigs and is trying to get a 3rd refurbished rig.

The Tupungato and Atamisqui acquisitions will add existing production. TREF management team is top notch. Also, looks like the PPC discovery could be extrapolated to the east to Atamisqui. We shall see.

Anyhow, thanks for asking.

fp

Disclaimer: very long TREF.OL
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