Take a look at this oil and gas Company and an independent evaluation
NTAH:OTC (OIL)
This months pick Nevtah Capital Management Corp., Symbol NTAH on Nasdaq BB
52 week trading range Current Price $0.55
I would buy at current levels $0.55 Stop/loss $0.40
Shares Outstanding 14,765,000
Management/Insiders own most of the stock
The float is estimated at approx. 1 million shares
Nevtah has been brought to my attention because of previous coverage
of Broadwater which is another Dan Kesonen company. Broadwater did very
well for us with a quick double, but then the BreX fiasco hit the mining
market. I believe Nevtah will also do a quick double and easily go
much higher given some time and this is why Nevtah recently entered
into an agreement with Tower Oil LLC of Nashville,Tennessee to form a
strategic Joint Venture. Tower Oil will transfer certain assets into
Tower Oil International LLC, in which Nevtah will earn a 60% interest.
Nevtah will spend $1.5 Million over 9 months in developing Tower
Oil's leases. The intent of the agreement is to put six areas in which
Tower Oil owns oil and gas leases and wells into production over the
next six
months.
MANAGEMENT
Danile P. Kesonen, President, has over 25 years experience in the
Financial and Investment Banking industry. He is managing Director of
RLK International Group, investment bankers, with offices in the US and
Europe. Mr. Kesonen has been President of PLC Systems Inc., a Director
of Gamma Electronic Systems and has held several VP positions with
Shearson Lehman Brothers, E.F. Hutton and A.G. Edwards and Sons.
Lawrence Jones, director has 30 years experience in operations and
finance. Extensive background in acquisitions and mergers in London, New
York, Australia. A former Managing Director, Barclays Metals Ltd.
member of the London Metals Exchange
Much of the expertise for this venture will come from management of
Tower Oil who are presently operating 27 oil and gas wells in Texas and
Tennessee. Tower Oil management has an aggregate experience of over 150
years in exploration, well drilling, completion and final production
of oil and as, a few key people include:
Robert Barnes, P.Geo., director of Nevtah has 35 years experience
encompassing all aspects of of the oil and gas industry in the United
States. He was Professor of Geology at the University of Tennessee,
Nashville for 14 years and adjunct Instructor in Geology at
Vanderbilt University for six years. He was instrumental in numerous
major discoveries including Gum Branch Field (1.1 million barrels of
oil and 1.4 BCF gas), Honey Creek Field (current producer of over
500,000 barrels of oil during first 3 years), Indian Creek (current
producer 1.8M barrels of oil, 1.3 BCF gas) Burrville Field (740,000
barrels of oil) and Lick Branch Field (1.1M barrels of oil).
Mr Barnes is President of Tower Oil.
Timothy G. Russell, geologist, Tower Oil has 30 years exploration
experience in the Middle East and Africa. He was exploration manager for
Amoco Production Company for 11 years. Mr. Russel was involved in the
discovery of at least 3 fields in the Africa-Middle East area including
the Mouvyaid Filed which has made over 2 trillion cubic feet of gas
William J Graham is a petroleum engineer with 41 years experience
including field operations in drilling, producing, onshore and offshore
construction of platforms and terminal facilities. He was with Exxon
Company for 19 years during in a supervisory capacity over engineers
and staff in the U.S. He was Operations Manager for Esso Exploration
in Malaysia including operations in the South China Sea and
surrounding area . Obvious without me telling you more you can see
that management is second to none
OIL and GAS PROPERTIES
Borchers No. 1 well in Gonzales County, Texas.
Production on this well has totaled at present 482 barrels of oil
since start-up on Oct. 2, and is set to attain a final productive
capacity of up to 300 barrels of oil per day plus approximately 200 to
300 barrels of salt water per day. This well, which is a horizontal
Austin Chalk producer, has reserves estimated by statistical methods
to total in excess of 330,000 barrels of recoverable oil. The well has
produced up to the present time a total of 180,000 barrels of oil.
This production level has been reached by means of a technique
utilizing a submersible high speed hydraulic jet pump. It is expected
that this well will plateau in the 200 to 300 barrels of oil per day
production range within the next 60 days.
Borchers No 2 well, Gonzales County, Texas
This well is currently inactive and previously produced 18,090 BO in
the Austin Chalk formation. The plan is to treat and re-equip and
return to production. Based on well history a production range between
80-120 BO/D is expected. The maximum cost is projected at $75,000 with
a 2 to 3 month payback at $18.00 BBL. Parker No 1 well, Gonzales
County, Texas
This well is currently inactive and previously produced 13,294 BO in
the Austin Chalk formation. The plan is to replace a head gasket on the
engine and return the well to service utilizing existing submersible
quituplex hydraulic jet pump for about 90 days to evaluate productive
potential.
The well may need reboring to remove suspected bridges in the
horizontal leg to bring back to full production. Based on well
history a production range of 60 to 240 BO/D is expected. The
estimated cost is $40,000 and an additional $60,000 if a rebore is
required with a payback of 2 to 6 months at $18.00/BBL.
Clearlake Hunt Club No. 1 well, Brazos County, Texas
Currently the well is producing 5 B/O/D (barrels of oil per day)
from a Austin Chalk formation because the drilled horizontal section is
relatively short and missed the target zone and all fracture systems.
The wellbore encountered abundant amounts of volcanic ash which has
resulted in partial plugging of the well
The plan is to drill a new and properly placed horizontal wellbore
which should result in a completion more typical of this area
consisting of several 100 to +1000 B/O/D
Additionally in this area three offsetting vertical wells were
completed producing from the Buda Limestone and one from the
Georgetown Formation . The cost of the extension drilling $300,000 and
600 BOD is estimated giving the project payback in 2 to 4 months at
$18/BBL price
Lawhorn-Lawhorn No 1 well, Gum Branch Field, Scott County, Tennessee
This well is currently suspended in the Ft. Payne Limestone
formation. The plan is to re-enter the existing vertical well and
lowside abandoned horizontal section and proceed to drill dual 1200
foot laterals. It is expected to develop undrained portions of the
reef resulting in producing rates and cumulative production exceeding
existing vertical wells. Good vertical wells in production here
produce at several hundred BO/D.
The estimated production is expected to be 400 B/O with a cost of
$75,000 and a payback of 1 to 7 months at $18.00/BBL.
Oil Property Summary
The current 300 bopd appears just to be the beginning. Four
horizontal drilling projects on leases in Texas and Tennessee will
commence in December 1997 and be completed by February 1998, adding
significantly to the companies revenue. The second well in Gonzales
County, Texas should come on stream in the next couple of weeks. NTAH
is anticipating a production range of 1000 to 1500 barrels of oil per
day (based on on historical yields and projections) from five
strategic oil projects starting at the six month level of
implementation.
Hawes Field Project, Matagorda Island, Calhoun County Texas
This is 1,571 acres of leases on a gas field containing 3 wells in
Miocene sands that are currently sanded up. There are two series of
pay sands in this acreage block, namely the Miocene at about 6500
foot depth is a certainty on this acreage and cannot be missed. The
trick is proper completion and proper handling of drilling mud while
drilling the pay. Proper production rates should also be followed.
minimum recoverable reserves from the Miocene is 10 BCF (billion cubic
feet) gas.
The Frio sands at about 12,500 foot depth have not been drilled but
should produce minimum recoverable reserves of 60 BCF gas from the
series if properly permeability is present. There is good seismic
coverage showing structural highs at both Miocene and Frio levels.
The plan here is to properly drill, complete and the right production
technique will eliminate the sand problems. One well should be
monitored for several months before drilling others.
Additionally a 3-D seismic survey was started in July to better
define the deeper Frio Sands. Recently a major Frio discovery was
announced by Shell in Matagorda Bay, behind this barrier island
complex. This is considered by Shell to be at least trillion cubic
feet gas discovery. Existing siesmic data illustrates good structural
development at the Frio sand level.
This field should definitely be a good gas producer with potential
for a large discovery. Nevtah plans to drill its first gas well on
the on this lease during April 1998.
FINANCE
Nevtah is committed to spend $1.5 million over a period of 1 year.
After it has made its total investment, Tower Oil LLC will vend its
fixed assets including a 12 mile gas line on Metagorda Island, Texas
into Tower Oil Int. LLC (Nevtah JV).
Net profits per year on oil production, based on current oil prices
are projected to reach $1.6 million by year one, rising to $6 million
per annum upon completion.
Yields from the April 1998 gas well are expected to range from
US$600,000 to US$1,200,000 in net profits per annum.
If we assume $1 million in profits after tax in year one and with 15
million shares out works out to $0.07/share. At 10 times earnings we
have a $0.70 share price. If projections are met and we assume
earnings rising to $4 million and further share dilution to 20 million
shares works out to earnings of $0.20/share and at 10 times earnings
gives a share price of $2.00. These are just some rough estimates and
most often these stocks move in anticapation of future earnings as
well as have a premium for exploration speculation. This quite often
results in high PE ratios and the stock price may reflect more on cash
flow and exploration potential.
I believe in Dan Kesonen with his connections in Europe and abroad
there will be no difficulty in raising any needed funds and probably
at much higher prices than we have today. Current projects will
quickly get the company into a positive cash flow situation as well,
so things look very good on the financial side.
SUMMARY
Nevtah is probably the most exciting oil and gas stock I have found
for things to happen in a hurry. NTAH has been under heavy accumulation
over the past month, this coupled with future developments indicates
bigger things to come, including a higher stock price.
NTAH will benefit from its alliance with Tower Oil who has large land
holdings as well as an exceptional management and technical team. We
can also expect numerous new oil and gas acquisitions down the road.
Nevtah should experience rapid growth along with rapid increases in
revenue and profits. There should be a considerable increase in
promotional activity in January which should co-incide with numerous
press releases on the NTAH's current projects and possibly future
projects unknown as of yet.
I have looked at numerous oil and gas stocks lately and have added
Rochester to my RSA newsletter and believe this is an excellent pick
for my Speculation letter as many followers of the desert stocks are
familiar with the Nasdaq OTC BB listings
There should be ample time to buy the stock at current levels
between now and years end. I expect 1998 to be a prosperous year
indeed for Nevtah and its shareholders.
Contact Nevtah 208-626 West Pender St.
Vancouver, B.C. V6B 1V9
604-689-7706 Fax 604-689-7715
Head Office, 4400 PGA Boulevard, Suite 716
Palm Beach Gardens
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