Petrominerales Ltd PMGLF

RE: Re: New 52 week low

[maxleverage]

$530 M market cap + $600 M debt = $1.13 billion of enterprise value.   

For this you get $300 M of pipeline assets, Orito / Neiva production sharing contracts (about 28 million barrels of oil in the ground per the reserve report, but only 5,000 barrels per day of production???) and the remaining 13 million barrels in the corcel fairway area (which will fund the business for 1 more year), Brazil and Peru for "free" and their Columbian exploration land for "free".   On the negative you get a $200 M tax exposure and the "what happens next risk" if they don't find any material oil in 2013 - i.e. how will they fund the business in 2014 once the remaining corcel oil is pumped out? (forget the dividend).

I don't think you can expect any bounce unless they find more oil and it will drop $2+ / share overnight if they lose the tax case.    If they find a nice oil pool, then the story changes completely.   Too bad Bromelia wasn't the 50 million barrel oil pool they hyped it up to be.   We would be easily at $15 / share if that well didn't come up dry.