Oil & Gas JR. ACG.v ...Looking Very Good 4x Bagger
Like all Deals Timing is of the essence. I am convinced that calmer heads will prevail. Serious Parties Involved here to get this Done. Meanwhile some Real Bargain Shares are to be Had in the Open Market. rare Opportunity IMO. They always say be greedy when others are Needy( Weak Hands) ...... Buy Low Sell High ......whatever suits your Fancy...bottom Line Tremendous Value to soon be unlocked here. Upside is Considerable.
The short answer is NO. The TSX is for gamblers.
I got into ACG before the 1st run up and got out near the $1.00 top but not with many shares. Todd Mongomery simply ran out of money to drill and wisely made a deal.
"This time is different". Bought lots at
.03 Friday.
Tallgrass management are very sharp and aggressive. They bought Compton Petro's assets at an incredible price:
1. 450 BOD for $37K while recent averages are $100-131K per flowing barrel.
2. Paid $8.10 for proved and probable. $27M for 2.1 MBOE.
Using only the 600 BOD calculation x$131K= $78,600,000. With 9.3M Tallgrass shares, add 34M PP shares, then add 29M shares for ACG (200K x .145%) would give 72.3 s/o. Divide shares into flowing barrel gives
$1.09 net present value. Then add in the value of the proved and probable @
.38 for a total net present value of $1.48
Since the 200M ACG shares are 0.145% of a Tallgrass share I come up with a value of
.21 with no value given to the mineral lands for either ACG or Tallgrass.
That makes the PP at
.60 and 1/2 wt at
.75 for 18 months a huge bargin that, I suspect, will largely be taken up by the insiders.
Bottom line: this is a potential 7 bagger minimum short term with no catalysts which seems unlikely given the aggressiveness of the management.
Did I miscalculate or miss something?
Kenn2, great info here. You make some very good points. A couple of minor corrections though. ACG will have 13.9 million shares in the go forward company, not 29 million. Total shares in the new company including ACG (the new shares will be 33.3 million after the $20mm raise at 60 cents, Tallgrass existing 9.3 million of TG shares and ACG after rollback, will be 56.5 million) which makes the net value you calculated even higher at $1.39/share. That is 9.6 cents per share before the ACG rollback.
The bottom line is, this company now has a great asset base, aggressive management and is currently only trading at 1/3 what it should be based on the current proved producing value of the company. The 9.6 cents per share does not take into account any of the huge upside due to future drilling locations (80+), oil price upside, future acquisitions, etc.
I'm surprised no other company is looking to take ACG/Tallgrass out at 12 cents (pre rollback) per share. This would be a great acquisition for any of the other players in the area that are looking for a great asset base and a significant amount of drilling locations to keep their machine going. I wonder if the Tallgrass management team would flip these assets into another company if the price were right. A triple from 4 cents per share in 3 months? That would be very attractive from a shareholder standpoint.