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ARPETROL LTD V.RPT

"ArPetrol Ltd is engaged in the exploration for and development and production of oil & natural gas, and also provides natural gas processing services for third parties in Argentina."


TSXV:RPT - Post by User

Post by knicksmanon Mar 04, 2014 2:24pm
247 Views
Post# 22279042

Soooooo Much Upside

Soooooo Much UpsideRPT owns a processing plant worth $20 million and oil reserves worth $65 million (on an NPV basis). To date, the company has paid off all of its vendor debts and only has the $1.5 million insider loan outstanding. In 2014, I am forecasting the company to generate between $4 million - $5 million of free cash flow (supported by discussions with management).

As the company sells its finished product in USD and buys its raw materials/equipment in USD the company has little exposure to the Argentine Peso (except labor which is not material).

With a market capitalization under $3 million, RPT should generate more free cash flow in 2014 than the company is worth. Or if the company were to sell its assets (let's say they sell their well at 0.5x NAV) the company is worth 9 cents per share (an 18-bagger).

The company should report Q4 results in April. The AGM is planned for June - I think we should get a share buyback announcement then (I don't think the company will buy back much, but I expect it would have a very positive impact on the shares...otherwise the company could provatize itself in a year). We may then get some monetization of assets then and move upward...significantly. 
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