RE:profitabilityI agree with that assesment. However, i have always felt that the value of USO is not in the production of oil but rather in the technology that makes expensive oil projects far less expensive.
consider for an example. Company X that wants to build a 1 Million bpd operation in Athabasca or any of the many oil sands regions of the world.
with a 20000-30 000$ per bpd capital requirement under USO's patented procedure this company would save roughly 500 Million dollars with a low estimetae of 80 000$ capital requirement per barrel produced, which is near the current industry standard, think about the value in that.
A company with 10 Million barrel aspirations over several plants would save 5 Billion dollars by implementing USO'S procedure.
The true value of this company as i see it is whatever the industry decides the patent is worth.
It will take a few months to a year of production out of Utah to prove to the major players exactly how effective USO's method really is, and the 183 Million Barrels USO currently holds becomes a real nice sweetner to any offer put forward. Considering a 10$ netback on that oil would bring 1.8 Billion into any operators pocket.
I do feel that the amount of oil resources available on USO owned lands is far larger that the estimates made by Sproul. In the multiple Billion barrels in fact is what's estimated on the Spring land.
So becoming a producer may be in the company's plans, you may be right on that, they have also mentioned in the presentation that 5 more 10 000 bpd plants are in the five year plan with a capex in the rhelm of 200 Million per plant for a total of 1 Billion $ in CAPEX for the five plants so it does seem that the company has very losfty asperations for the share price after roll back.
Assuming the 100 to 1 goes forward which i am quite certain it will the stock will likely trade in the 10$ range with a pre-roll back price of .10 which is not difficult to reach after plant commisioning. The company would need to sell quite a few shares to raise 1 Billion in CAPEX funding. 100$ share after rollback is not so far fetched but it would take a big jump in oil prices to get there. I am optimistic and will be doing my buying on this stock very shortly after liquidating some other holdings. GLTA