If I may add to David Smith's comments, we should keep in mind that while the DENOMINATOR of the EarningsPerShare value has increased, the increase can be attributed to certain outcomes that will be accretive to Earnings, the also important NUMERATOR of the EPS.(And also add to the Balance Sheet)
Specifically:
1.The sale of Uinta eliminates debt from the balance sheet, interest and other overhead of ~$300,000 per year, and adds $1,000,000 to assets and returns stock to Coconino.
2. AdHatters is expanding at bettter than expected levels, while reducing costs of operations.
3. LPS, which was initially acquired to provide sufficient assets for NASDAQ listing, is expected to grow at a faster pace through the marketing of the 125 % 2nd mortgage program and be profitable late in the year.. LPS was never factored into any of MY calculations for earnings
4. The private placement offering of 7.5 million shares will retire debt, support the marketing efforts to grow LPS, and provide additonal working capital. Moreover, these shares are 144 restricted stock.
5. The company has indicated that the cost of operation of the EnviroTec well is approximately $10,000 per month and will be essentially unchanged upon upgrade to Class V status. The well is profitable charging 70 CENTS PER BARREL, so it should follow that the well will be very profitable charging TEN TO TWENTY DOLLARS PER BARREL.
6. Coconino Oil and Gas, which was never factored into any of MY calculations for earnings, has a number of prospects under review to acquire PRODUCING WELLS.
7. Coconino is a much different company today than last year. The increase in shares, the vast majority of which are restricted, can be directly attributed to asset acquisition and/or debt reduction. While this may be called dilution, the dilutive effects are substantially mitigated in light of the increase in assets.
It appears that the Company understands the deleterious effects of printing paper for paper's sake. If blatant dilution wasn't done in the past, why would it be done now, when the company is much stronger from an asset point?
TraderGreg |
