I have been doing some calculations. Please bear in my mind i am a geologist by profession and not in the oil and gas sector but in hard rock mining. However, I have returned to my textbooks and worked a profile up here. Please tell me if I am off base or wrong. Because if I am correct, 2 cents for this company seems a might ridiculous.
So here I go:
The company is sitting on (at current prices) $2800/day in cashflow from Ft. Scott. Which equates to about 1 million + a year in cashflow. Has a proven resource worth ($4 a cubic foot). Which in my calculations using known fundamentals comes out to $1.6 billion gross or around $16 a share. Is debt free.I think this would attract some attention of potential buyers, JV partners or equity stakeholders. Would you not think the same ?
Upon completion of the foreclosure, Admiral Bay is debt free, haspositive working capital and retains its Ft. Scott Property in BourbonCounty, Kansas. As of July 31, 2009, Ft. Scott had proved reserves ofapproximately 4.2 Bcf and is presently producing approximately 50Mcfgpd. The Company has also retained a 25% working interest in theRevloc Project located in Cambria County, Pennsylvania.
BCF=An abbreviation forbillion cubic feet. Unit used to measure large quantities of gas,approximately equal to 1 trillion (1012) Btu.
Quantities of natural gas are measured in normal cubic meters (corresponding to 0°C at 101.325 kPa) or in standard cubic feet (corresponding to 60 °F (16 °C) and 14.73 psia). The gross heat of combustion of one cubic meter of commercial quality natural gas is around 39 megajoules (≈10.8 kWh), but this can vary by several percent. This comes to about 49 megajoules (≈13.5 kWh) for one kg of natural gas (assuming 0.8 kg/m^3, an approximate value).
The price of natural gas varies greatly depending on location andtype of consumer. In 2007, a price of $7 per 1,000 cubic feet (28 m3) was typical in the United States. The typical caloric value of natural gas is roughly 1,000 British thermal units (BTU) per cubic foot, depending on gas composition. This corresponds to around $7 per million BTU, or around $7 per gigajoule. In April 2008, the wholesale price was $10 per 1,000 cubic feet (28 m3) ($10/MMBTU).[35]The residential price varies from 50% to 300% more than the wholesaleprice. At the end of 2007, this was $12–$16 per 1,000 cu ft (28 m3).[36] Natural gas in the United States is traded as a futures contract on the New York Mercantile Exchange. Each contract is for 10,000 MMBTU (~10,550 gigajoules), or 10 billion BTU. Thus, if the price of gas is $10 per million BTUs on the NYMEX, the contract is worth $100,000.
The Company is consideringa number of strategic options including the sale of additionalassets, the purchase of or combination with other oil and gas assetsto create a company with additional scale and growing the Companythrough intrinsic drilling and development of existing assets.