RE: RE: RE: RE: RE: RE: RE: More Insider Buying -At the end of 12-31-08, EPS has $22 million net cash per its latest presentation.
Q3 report included assets of Yemen oil field of circa $40-50 million, I think.
Marcellus shale is its most important assets now. Look at COG's new wells in the same county in PA, average IP rate is about 8 mmcfd. And we know that the NG there usually receives a premium to NYMEX. Also see RRC's presentation, even at current NG price, these Marcellus horizontal wells generate great IRR.
EPS said it would produce NG from Marcellus by the end of June at some 6-7 mmcfd. If these horizontal wells could flow at IP rate of 4-8 mmcfd, then it will be very easy to ramp up production. When production is up, the G&A per mcf or boe will decrease.
EPS already drilled 3-4 Horizontal wells and 3 vertical wells. It completed 2 H wells and one V well. The cost of a H wells is $3-4 million, and a V well is $1.2-1.5 million. So roughly these wells cost more than the current market cap of EPS.
The company has 31000 net acres in PA and NY, the undeveloped acres worth $500-1000/acres, so these Marcellus shale lease hold worth more than its market cap.
Its net cash value($22million) at 12-31-08 exceeds its market cap.
It also has some conventional NG wells, probably produces 2-3 mmcfd.
EPS does not have net debt. With the cash on hand at 12-31-08, plus some debt($40-50 million), it can drill 20 marcellus H wells, which could produce 6000 to10000 boed in the first year (average 1.8 to 3 mmcfd per well in year one ). Of course these wells will not begin production in the same day.
I think if EPS' Marcellus H wells is as good as COG's, then this company worth much more than its current market cap.
It could be a 3-5 bagger in 1-2 years.