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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: CommanderCricket who wrote (88495)7/31/2007 5:35:59 PM
From: profile_14  Read Replies (4) of 206342
 
CC, I read the recent SEC 10-Q filing on BZP and I have my reservations, seeing the reverse merger to obtain listing in the markets and the possible risk of investing in Peru and Ecuador. I understand the story, but this has the smell of a possible 3-phase management enrichment program of which the 3rd phase is yet to be delivered. Assuming they deliver it, 2k bpd or 12 mcf of gas that is the equivalent of 2k bpd * $70/bpd or $140k/day or approx. $51.1 million in revenues per year.

The company's market cap is about 6-7 times that much and who knows what the cash flows will ultimately be once costs stabilize after the ramp up?

They have eaten up lots of cash ($12 million+) and plowed it into platforms just this quarter alone, but how much more will they eat before they further dilute shareholders is the question in my mind? Their debt is nearly nil -- why when financing has been so cheap? Will they turn cash flow neutral or even positive? Are they headed by a stock promoter who will extract lots of value prior to leaving shareholders with the bag? If he can extract value prior to saddling the company with debt, which it will need IMO, I think it is a risky proposition. I am interested in the idea but need to learn more and short of the filings I would welcome your input and recommendation for additional information.

Separately, I think humpty dumpty is beginning to come apart. VLO had a decent report, just shy of estimates, but crack spreads have cratered from $30 to $10. I think there is more downside to the whole refining sector into August and September before it going up again in Q4. That is when I plan to reassess the sector.

Thanks and best regards,
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