Petrotech Oil and Gas, Inc. (PTOG)

[stervc]

Edited: VortMax, here’s a UYMG Valuation why I agree…

Here’s why I share your same sentiments. With UYMG and its recent news, the company stated…

http://ih.advfn.com/p.php?pid=nmona&article=53950508

… "With expected sales of 5,000 units the first year, with a cost range between $5500.00, and $77,00.00, depending on the well depth, this system could revolutionize the way Operators produce oil and gas," said Ayo Odetunmibi Vice President and staff Engineer. With just the 340,000 stripper wells in the US, the possibilities of Services, Joint Ventures and owner operator are very large numbers. The numbers are even greater when one considers the other wells in the US.

Mr. Odetunmibi continued, "After evaluating what structurally needs to be built out on the property, with our technology; it seems we are in the right place at the right time. We believe upon approval of the system from the governing agencies we could have a 42% margin above the cost of manufacturing." …

This means that UYMG is expecting Revenues from their ”NG Pumping System” for ”the first year” in the amount below:

5,000 units x $5,500 per unit minimum = $27,500,000 in Revenues

thru…

5,000 units x $7,700 per unit maximum = $38,500,000 in Revenues

This means that UYMG is expecting to generate $27,500,000 to $38,500,000 in Revenues from their NG Pumping System technology during its first year.

When the PR stated that they could have a 42% margin above the cost of manufacturing, which can be interpreted two different ways good or bad, I will choose a worst case scenario for interpreting. I will interpret such to mean that 42% is the percentage of profit to not include the cost of manufacturing. So I will also take this to mean that the 42% represents the earnings before interest, taxes, depreciation, and amortization. (EBITDA). The 42% will be considered the operational profit or profit made from their operations being executed. Let’s consider the minimum per unit amount above which brought about $27,500,000 in Revenues. This means that UYMG expects to have a minimum EBITDA as indicated below…

$27,500,000 Revenues x .42 = $11,550,000 minimum EBITDA

A penny stock generating $11,550,000 EBITDA with an Outstanding Shares (OS) amount to be no higher than the 375 million shares in its Treasury of Authorized Shares (AS) is very significant indeed. This piece alone is enough to justify trading in the pennies. Having an OS that can go no higher than 375 million shares presents a very solid OS for the company.

However, to determine where UYMG should be trading, I would rather want to consider determining an Earnings Per Share (EPS) to derive a ”Net” amount for Earnings/Income/Profit. We can speculate on this since the Net Profit margin for the profitable stocks on average within its Industry (the Oil & Gas Drilling & Exploration Industry) in which it would trade is 13.60% as indicated below:
http://biz.yahoo.com/p/123conameu.html

This gives us an amount for ”Net Profit” to very possibly be somewhere in the area below:

Net Profit = $27,500,000 Revenues x .1360 Net Profit Margin
Net Profit = $3,740,000

So now if we were to consider the Net Profit above, we can derive an EPS. We will consider the UYMG current Outstanding Shares (OS) to be maxed out to equal its maxed amount of Authorized Shares (AS) to be 375 million shares as indicated within the post below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78953921

EPS = $3,740,000 ÷ 375,000,000 (OS maxed)
EPS = $.0099

Now we must multiply the above EPS by a determined P/E Ratio. I think it is important to read the post below to understand the importance of doing this and to grasp a better understanding of the P/E Ratio:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170

Below, from Yahoo, the Oil & Gas Drilling & Exploration Industry has a P/E Ratio of 13.40 which is what will logically be used as the multiple to reflect the UYMG ”potential” Price Per Share Valuation below:
http://biz.yahoo.com/p/123conameu.html

Price Per Share Valuation = EPS x P/E Ratio

Price Per Share Valuation = .0099 EPS x 13.40 P/E Ratio
Price Per Share Valuation = .132 per share

Still, in order for this valuation post to hold merit, the company has to prove that they will be generating such amount of Revenues from its NG Pumping System technology that was recently PR-ed below:
http://ih.advfn.com/p.php?pid=nmona&article=53950508

v/r
Sterling