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Microcap & Penny Stocks : MTEI - Mountain Energy - No BASHING Allowed -- Ignore unavailable to you. Want to Upgrade?

To: eric deaver who wrote (4086)	6/29/1998 2:43:00 PM
From: DG Cruise	Respond to of 11684

Eric, I agree. We also do not know if this is over valued or under valued. Time will tell, when the Stagg reports come out. If the estimates in the release are even close to the estimates in the releases we should see a huge increase in price. (MY OPINION) Anything on top of that is just icing on the cake, Examples: acquisitions of land, or smaller companies rolling into MTEI. And there is always the possibility of a oil & gas company buying MTEI. You never know! There are many uncertainties on both sides, but I believe we are way undervalued at .40... DG

To: eric deaver who wrote (4086)	6/29/1998 5:57:00 PM
From: Thomas C. White	Read Replies (1) \| Respond to of 11684

"The EIA defines proved reserves as those volumes of oil and gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved reserves are either proved producing or proved nonproducing (i.e., resident in reservoirs that did not produce during the report year). The latter may represent a substantial fraction of total proved reserves." No problem here -- keep in mind though that in the case of "proved nonproducing," this is normally in the case of fields which have in the past been producing but which are left idle during the reporting period (for economic reasons usually, where the price of oil is low and extraction cost is high, so they let the field idle until the price goes back up or they find some cheaper way to get it out). It does not usually apply to a field that has never produced. The reason is that until there is some production history from a field, it is very difficult to justify the "proven reserve" issue from an SEC standpoint. Also shouldn't this statement: <<So, you don't know in the case of MTEI how much of a premium over book value you're paying.>> Read: "So, you don't know in the case of MTEI how much of a premium or discount over/under book value you are paying." Theoretically, of course. It is, however, very difficult to find any "growth" company that you can buy for less than the net asset value . This would tend to mean there's something very wrong. Personally, I do not really see the relevance of this whole discussion on book value of the company given the current share price, and the ongoing definition of the company. Re the issue of book value, I only specifically got into this issue because I was asked about it. My main point was to stress that you can't take a number like $200 million "value" of assets that has sometimes been bandied about and extrapolate a target price of the company at $2 or $3 a share. However, I will say that book value (basically, net worth) is, in the end, very relevant. It tells you what the net asset base of the company is, the base that it needs to accomplish its target mission. The only time a company can operate with little or no tangible book value is by borrowing money or by selling a piece of the company to someone else to get the cash (in the case of MTEI, this would mean leveraging or dilution). I would agree with that statement from an accounting stance. Seems like most of your post confirms what everyone has been saying. We truly will not KNOW the value of these assets until Stagg's reports are released. Well, you would then know the hypothetical value of these "assets," assuming (and this doesn't seem to be at all certain) the results of the reports are actually released. But that won't really be the whole issue. From the 24 June press release: "In addition MTEI has a letter of intent with Pacific Tax Properties to purchase an additional 8,000 acres, plus or minus, pending the evaluation results of a study presently being done by Stagg Engineering Company and the geological and engineering staffs of MTEI. Providing verification of product in place and on completion and receipt of reserve studies, MTEI will then select specific properties we wish to acquire and negotiate the acquisition." My read is that MTEI does not at this point actually own a good piece of the assets in question. They will have to buy them for a certain price, all of which factors into the viability of the activity. Again, until you see an audited financial statement, you don't know much of anything concrete about what's going on.