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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (98568)4/8/2008 9:33:28 PM
From: Ed Ajootian  Read Replies (1) of 206325
 
PetroResources (PRC) -- Per slide 10 of today's presentation, the PV10 value of their proved and probable reserves @ 12/07 was $54 M and $187 M respectively. Their market cap is presently $49 M and they have about $3 M of net debt and $8 M of preferred stock. Quite an amazing discount being placed on their probable reserves.

Their goal is to double reserves (to 5.5 mmboe) by year-end. So if they meet that goal that would mean the stock's enterprise value is under $11/boe. Most companies that are highly oil-weighted (such as PRC) are trading at closer to $25/boe.

I strongly recommend that all PRC fans take the time to listen to today's IPAA presentation. Don (PRC pres.) said that their net production at Cinco Terry is now up to 200 boe/d, which is phenomenal growth -- per one of their slides, it looks like they only did something like 110 boe/d there for 1Q. And all this is just coming from having a single rig out there. Now that they have 2 rigs there we can expect double that growth going forward.

About 3/4ths of the production at Cinco Terry is gas. With the current high natty prices this is the perfect time for this production to be ramping up.

1Q production appears to have come in a bit light vs. what Dan at energy prospectus was calling for, but I believe 2Q production is going to turn some heads.

Now that they are solidly into positive cash flow they should have no problem getting a conventional reserve-based line of credit.
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