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

To: Devil's Advocate who wrote (4529)	7/6/1998 11:09:00 AM
From: EubieV	Read Replies (2) \| Respond to of 11684

MTEI-Book Value, Etc. Interesting reading--Thanks for the DD DD Summary 1 Did a little DD: Called the West Virginia Geological survey-- talked to the director: Raleigh County: -- Deep mining, very little surface -- Low sulphur coal is there in a abundance (my bad on earlier post) -- 600 producing gas/oil wells Lincoln County: -- Deep (shaft) and surface mining -- Marginal coal-- mix of low/med/or high sulphur coal -- 6,000 gas/oil wells since 1929 -- 4,200 wells have reported -- 2,200 wells in production Stagg Engineering-- VERY well thought of-- been in the biz a long time... DD Summary 2 I invested in Mountain Energy, Mr. Jack Uselton and his experienced management team. I did not invest in ICVI (or any of its predecessors), nor did I invest in Mr. John Christensen or his management team. However, for the record MTEI is a newly formed company. Mr. Christensen is diligently working to turn over all past records and books to MTEI so he can move on to focus his attention on Convenience Concepts, Inc. Mr. Christensen does not office in the MTEI corporate headquarters, nor does he have an office in the same building. Our goal is to find the value and viability of Mountain Energy, not the value and viability of the now defunct ICVI and it's predecessor companies. So how do we learn about MTEI? Who are the principals? How did it form? What are their plans? Who is in control of the company? What is the value of MTEI's assets? What is their plan for acquiring, exploration, drilling and exploitation. It's really quite simple. We go straight to the source and get the facts. We call the CEO, Mr. Jack Uselton. In fact, more than a dozen people call him and report back their conversations. If that's not enough at least three people talk with Mr. Winston Overstreet, Vice-President of Operations. We learn the management team Mr. Uselton is putting together is extremely experienced. We also call other oil and gas concerns to see if they know or have heard of Mountain Energy and Jack Uselton. Yes, Mountain Energy is known and even more impressive that Mr. Uselton is one of the most well respected oil and gas men in Houston. In fact while in the process of calling O&G companies, we even verify that MTEI has been actively pursuing acquisitions - a good thing to do while oil and gas prices are at all time lows. We even go so far as to have a gentlemen, who is currently working in the O&G industry with more than 20 years experience, give Mr. Uselton a call. They talk for more than an hour. Mr. Uselton and company get a favorable recommendation. We also find that MTEI has competitive advantages in drilling over larger oil and gas concerns due to their size, their technology, and their strategy of going after reserves in already existing wells thus helping to reduce start up costs. We even spend more than an hour on the phone with a gentlemen who spent a day in Houston visiting Mountain Energy. This gentlemen is now an investor in MTEI and is accumulating more at these levels. We dig enough to find out that MTEI is pursuing loans and lines of credit with a well known financial institution rumored to be a $50 million loan with a $100 million line of revolving credit. Current loans for O&G companies are typically 25% of fair market value. We go so far as to have multiple people call Stag Engineering to verify that indeed MTEI has retained their services to survey 2600 + 8000 acres in West Virginia. USGS estimates usually represent 25% to 40% of actual minerals in place. We learn from Stag Eng. that in West Virginia the underestimates have typically been higher than this. We find many advantages to the properties in West Virginia ranging from high grade coal, collection networks already in established, gas which qualifies for alternative fuel tax credits, to acreage that is in already proven oil producing counties. We also learn that MTEI will exploit their properties to the fullest extent within the letter of the law. We learn that MTEI just hired a gentlemen fluent in satellite and infrared imaging technologies for enhancing their oil and gas identification and exploration capabilities. We also learn that MTEI has interviewed at least one lady that they really like to handle in house Investor Relations and hope to bring her on. We have an example of a company, TransMontaigne Oil Co (AMEX:TMG), who successfully reverse merged onto the AMEX exchange going from .50 to its current price of $15. TMG is similar in design to possible plans that MTEI might be interested in pursuing. And to top it all off, we add to our DD by reading the press releases, which state the company is in the business of ACQUIRING primary producing reserves. The company is in acquisition mode, which again is a positive because they will be buying at an industry low. Let's take the conservative approach and run some numbers. Start with the $2.85 book value stated in the press release which does not factor in any other resource exploitation other than coal and natural gas. No oil, no lumber, no precious gems. At a conservative 25% of USGS underestimate, this would give us a new book value of $3.56. For Oil and Gas concerns not showing a profit, industry averages indicate a price to book multiplier of 1.5 (3 x for profitable companies). Let's be conservative and not even factor this in. Now add in the 8000 acres, which is roughly 3 times the size of the 2600 acres. Assuming that similar reserves are within the 8000 acres, we have $3.56 * 3 or a new book value of $10.68 based on coal and gas alone in West Virginia properties. Adding other exploitations on these properties would raise this value. While all of this DD does not make MTEI a sure bet, I feel that it offers a significant step towards understanding the value of investing in MTEI. I feel comfortable with my current position in Mountain Energy, Inc. and will continue to accumulate. Have a prosperous day!