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What NCEYQ should concentrate on is trying to get the courts to eliminate or at least reduce the 30% default rate which comes to around $20 million on the balance owed to LMF. I am fairly certain that their assets are worth over $70 million and therefore would preserve some shareholder equity for current shareholders.
If NCEYQ can't pay what they owe to LMF then this case will revert Chapter 7 bankruptcy case and complete liquidation of assets and cancelled shareholder equity.
Disclosure: I am neither long nor short NCEYQ and just wanted to take a look at the potential value of the underlying NCEYQ assets while it is in Chapter 11 bankruptcy proceedings to see if any shareholder equity will survive. NCEYQ has four major asset fields, two in natural gas and one in the oil patch and undeveloped lease areas of both oil and gas potential.
NCEY acquired a 93.75% working interest in 10 oil wells and one gas well and a 70.31% working interest in one additional oil well, as well as revenue interests of 72.19% in 9 of the wells and 41.01% and 70.80% in the other two wells, (collectively “Mustang Creek Assets”) for $33,000,000 (funded by Laurus Master Fund) on the effective date of December 1, 2005 (closure on April 28, 2006). Mustang Creek Field accounted for 87% of their net oil production in 2007 (127,738 out or total of 146,579 barrels) and 91% of net oil production in 2006 (173,097 out of a total of 190,846) . At the time a barrel of oil was approximately $60 – $65. At current a barrel of oil is at $118 so the underlying asset has appreciated approximately 90% in that time frame. I am assuming that the value of the 1.3 million proved barrels of oil (if known) will be in the same ratio as today with just a difference in the underlying asset value. Therefore, 33,000,000 x 1.9 = 62.7 million in current value of Mustang Creek field. At a sale at auction in bankruptcy I am sure there would be a discount to this factor, but I am unsure how much to apply.
The other producing oil fields include Prado, San Miquel and Tenna, respectively. 50% of Prado was acquired In June 2004. Prado Field comprises 1,280 acres in Jim Hogg County, Texas with four (4) active wells on this lease and twenty (20) inactive well bores. In September of 2006, the Company re-purchased the remaining 50% for a cash payment of $300,000. The Company now owns 100% of the working interest in the Prado Field production. Prado produced 2,083 barrels of oil in 2007. The San Miguel Creek Field is located in north central McMullen County, Texas. The Company currently owns and operates the 200-acre Herrera Lease and the 40-acre Wheeler #2 lease in this field (240 acres total). The Company now controls 100% of the working interest on these leases and wells which produced 11,344 barrels of oil in 2007 and 9,938 in 2006. Tenna Field in Wharton Co, TX was acquired with 100% of the working interest in three (3) wells in the Tenna Field in July 2003. Tenna Field produced 5,414 barels of oil in 2007 and 7,811 in 2006. I couldn’t find the price paid by NCEY for these last two oil properties currently producing.
The two operating Natural Gas properties include: Sargent South Field in Matagorda Co, TX. NCEY acquired 100% of the working interest in the Sargent South Field from Calpine Natural Gas (NYSE) and its partner, ("Calpine") in January 2004. The Sargent South Field is located onshore in Matagorda County, Texas, east of Matagorda Bay. The leasehold is approximately 3,645 acres. Currently, there are two (2) producing wells on the Hamill Lease; Hamill #2 and Hamill #17, with daily production in excess of approximately 1,600 MCF of gas per day. Sargent South produced 180,220 MCF in 2007 and 318,229 MCF in 2006 and 164,965 MCF in 2005.
The other Natural Gas property is non-operated the Wishbone Field – Lindholm Hanson Gas Unit. As of January 3, 2006, the Company owns a 15.20% non-operated working interest with a 12.214% net revenue interest in the Wishbone Field in McMullen County, Texas, which is operated by U.S. Enercorp, LTD, headquartered in San Antonio, Texas. The Company acquired its interest in the Wishbone Field through three (3) separate transactions. In June of 2005, it acquired a 6.2% working interest and 5.464% net revenue interest. In September of 2005, it acquired a 7.25% working interest and 5.4375% net revenue interest. The total combined interest now owned by the Company is a 15.20% working interest and 12.214% net revenue interest. In January of 2006, it acquired a 1.75% working interest and 1.3125% net revenue interest for $1,890,000. Wishbone field produced 272,301 MCF of natural gas in 2007, 715,624 in 2006 and 1,374,755 in 2005. Therefore, if we extrapolate the value of their last purchase to the total percent of interest owned it would equate to a value of approx $1,890,000 X ( 12.214% /1.3125%) or $17,588,000 at 2006 prices with Natural gas at around $6.00 per MCF, whereas it runs $8.50 MCF today.
Conclusion: NCEY essentially owes Laurus Master Fund $68 million + 30% default rate for a total of about $88.4 million. I don’t know if there will be any other major creditors or vendors, etc will try to claim any NCEY asset value. The key value for me is the value of the Mustang Creek Assets. If they can get a value of at least $50 –55 million then close to $20 million each for their Natural Gas Fields then there maybe some shareholder equity preserved. They could be left with their non-developed lease property and their (3) smaller oil field producing properties possibly. Odds are probably still against any shareholder value remaining , but I’m sure the stock price will be volatile as it will take many months to sort this bankruptcy out. Comments and constructive criticism welcomed on my method of valuation of NEYQ assets or anything else (sorry for the length of my analysis).
Flatsixer,
Thanks for filling in the details for BESV as I was trying to find a somewhat comparable case to NCEY to see if anything can be salvaged for common shareholders as it was for Blast.
Yes,
The assets I believe on the balance sheet should be at cost of acquistion of such assets. I haven't yet figured out how the value of the recoverable reserves of oil and gas is evaluated in present terms (i.e. 1.6 million barrels X cost of barrel x some discount factor). What would some third party pay for their oil reserve assets? There must be some formula out there to tap into for this. I figure the debt including the 30% default rate could be as high as around $88.4 million ($68 mil x 1.3)
If you would have read the SEC filings you would have discovered they have been upside down for years along with a working capital deficit. In Chapter 11 bankruptcy they look to re-organize if possible if anything left over after creditors pick away at the carcass. The overall question is NCEY properties worth more than the loans owed to Laurus so as not to wipe out shareholders equity.
BESV (Blast Energy Services went Chap 11 last year when they owed Laurus 40 million and the shareholders equity survived (in bankruptcy for 13 months). However they had more assets then liabilities at the time of filing ch 11.
The $51.9 million is just the total assets listed in SEC filings as of March 31,20008 and the same liabilities total of $75 million +. NCEY has been "technically" bankrupt for some time now. Because the assets were listed at cost on the filings they should have more value because of price of oil increase.
NCEY probably will survive as an entity in some form, however the current shareholders will be wiped out in favor of Laurus as liquidation of assets will surely not cover debt to Laurus...IMO
One new thing that was revealed in yesterday's 8-K that was new was Laurus wanting all their money back not just the $18 million due on July 1st 2008.
NO other entity would touch financing NCEY since essentially all of their assets are pledged to Laurus in case of default on loans. They HAVE to work out a deal with Laurus some how to survive.
The new info from this last 8-K centers around the demand for all 68 million loan + back not just the $18 million + currently due on June 30th and July 1st 2008. I still think they may get some financing done but the terms are going to be ugly as they get.
The question is what are NCEY options now that Laurus has demanded payment in full of $68 million + owed . Will NCEY have anything left if Laurus gains control of enough assets to cover their loans. I hate to predict it but $.05 a share or lower is coming tommorrow after this bomb was dropped.
http://ih.advfn.com/p.php?pid=nmona&cb=1210796836&article=26317829&symbol=NB%5EAAGH
Notification of late filing
Ok, smart guy then why was their 0 volume trading on AAGH today. I have followed for at least 2 years and their has NEVER been zero volume for the entire trading day. You would think on speculation alone negatively that AAGH would have an inordinate volume today if it was trading at all based on speculation of how bad the earthquake was.
http://www.hemscott.com/news/latest-news/item.do?newsId=64220498563129
AAGH is located in China at Shenzhen but maybe they were a part of the suspension . I imagine that they will report in soon and continue to trade tommorrow perhaps. Or perhaps I was wrong and they just traded 0 shares today for no reason?
I believe the Chinese earthquake epicenter in Chengdu was around 1,500 miles from AAGH headquarters in Schenzhen. However,
it was very shallow and felt in neighboring countries. I expect the death toll to be in 6 figures.
http://www.google.com/imgres?imgurl=http://www.chinatraderonline.com/images/Map-Shenzhen-China-small.gif&imgrefurl=http://www.chinatraderonline.com/support/Shenzhen_China.htm&h=390&w=500&sz=116&tbnid=qIE31S-OErsJ:&tbnh=101&tbnw=130&prev=/images%3Fq%3DShenzhen%2Bchina&hl=en&sa=X&oi=image_result&resnum=1&ct=image&cd=2
I believe we have suspended trading of AAGH and other chinese stocks because of massive 7.9 earthquake in China.
http://www.cnn.com/2008/WORLD/asiapcf/05/12/china.quake/index.html
Last year AAGH reported on 5-18-2007 so we should here something soon.
Another day another $.0001 a share for PRSF...however with 0 volume...what's up with that?
Now that we all "understand" what AAGH is doing all they have to do is "execute" their plan and we will be on easy street LOL
Hard to believe that it has been 2 1/2 months since last PR...maybe Karney has run out of things to B.S. about...roflmao
I'm just playing devils advocate but the viewership was not the problem with WWTBAM which supposedly was great....It was distribution and selling of advertising spots for the venue. They can say they solved their problem...I will wait for proof of it before buying more of AAGH down here.
I'll keep my last 20% shares of AAGH and wait out to see what happens. Time for AAGH to step up to the plate and start producing on the TV front...hopefully I'll have enough patience
I just don't think momentum investors initially will give the same cache to "singingbee" as they did to WWTBAM. I think it will take actual earnings from those projects which may well then get AAGH some momentum. It will take more patience now if they have righted the ship with those TV projects.
What's going to hype up AAGH like WWTBAM did to attract the investors? It looks to more more like slow and steady if these other lowel echelon programs (i.e. singing bee)can turn a profit. Not generating hype like WWTBAM did for sure. ..but maybe they can make a profit on these. Stock is in prove it stage which at least lessens its volatility..IMO
I wasn't making fun of HAN...just showing how ridiculous his revenue and earnings projections were for WWTBAM.
I had many spirited exchanges with Han concerning potential revenue and or earnings from this WWTBAM project (Below is Han's analysis for anyone who wants to refresh their memory...sorry for the painful memory). I figured the best case scenario would be about 10% of what Han was forecasting. He was forecasting anywhere from about $1 million plus or more revenue per episode to AAGH based on his flawed logic of success with WWTBAM in other markets (Hong kong China WWTBAM flamed out after 5 months...but they did show program 5 days on week during that time). In effect it turned out to be about 1% of Han's predictions (so even I was off by a factor of 8X...stupid me but at least I sold 80% of my 150K shares of AAGH into last run-up). In the filling they reeived $118,000 + from WWTBAM from Sept 20- dec 31st or about 13 episodes...just over $13,000 per episode.
CALCULATION and COMPARISON:
We know that 30 second spots in Vietnam costs $3,400. Let say each 60 minutes show have 10 minutes of advertising time (in Vietnam, USA, and China).
GDP (ppp) 2006: Vietnam’s: $3,400; China’s: $7,700 (2.26x of Vietnam’s);USA’s: $37,800 (11.11x of Vietnam’s)
Population/Market Size (2006): Vietnam’s: 85 millions; China’s: 1.3 billions (15.3X of Vietnam’s); USA’s 300 millions (3.53x of Vietnam’s). However we got the precise number of home viewers who have access to the show of 517 millions or 6X of Vietnam's. This is the number I will use instead of 15.3 to make my DD more accurate and conservative.
Vietnam’s Calculation:
$3,400 x 2 ads per minute x 10 minutes = $68,000 of ads revenue (10 minutes per a 60 minutes episode.)
USA’s Calculation:
If we use Vietnam’s revenue and work backward to see how it compares to that of USA in 2001.
$68,000 x 11.11 GDP differences x 3.53 Population differences = $2.66 million in ads revenue of 10 minutes per a 60 minutes episode.
We know that about 6 years ago in the USA, advertising revenue from the show is around $2 million per episode. The $2 millions at 5% growth in advertising cost and inflation rate for 6 years = $2.66 millions. Basically, $2 million in 2001 equal $2.66 millions in 2007 after adjustment for interest rate. That was $100,000 per 30 seconds spot back in 2001 or $134,000 per 30 seconds spot in 2007.
China’s Calculation:
$68,000 x 2.26 GDP differences x 6 Population differences = $922K per twenty 30 seconds of paid advertising spot for 60 minute show. That is $46K per each paid 30 seconds spot.
But in China we have 90 minutes episode. $922K x 1.5 = $1.383 millions in ads revenue per Saturday new episode.
Using the USA’s cost structure (40% of ads revenue 700K/1750K), each episode in China will generate $830K ($1.383 x 60%) in profit per 90 minutes episode.
104 episode x $830K = $86.32 millions in profit (2 years) OR $43.16 millions in profit for 52 episode (1 year).
The revenue from advertising is split CMP 70% and local agent 30%.
Total Ads revenue: $1.383 millions
Cost per episode (90 minutes): $553K (40% of $1.383 millions)
CMP takes 70% of revenue = $968K in revenue per episode.
CMP net profit after cost = $305K per episode ($968 - $553K).
AAGH owns 60% of CMP.
AAGH ‘s take in profit per episode: $183K per episode.
Net profit for AAGH per year (52 episodes) = $9.52 millions.
With 200 million shares in O/S = $0.0476 a share in net profit (EPS)a year from now.
ALSO, the revenue from the RERUN on Sunday afternoon & CALL-IN revenue stream for this show in China might be worth $300K a week. But this time there is no cost of production involved. Giving the ratios as above:
Total Ads revenue: $300K
Cost per episode RERUN (90 minutes): $0
CMP takes 70% = $210K in revenue per episode.
CMP net profit after cost = $210K per episode.
AAGH owns 60% of CMP.
AAGH ‘s take in profit per episode: $126K per episode.
Net profit for AAGH per year (52 episodes) from the RERUN = $6.55 millions..
With 200 million shares in O/S = $0.0327 a share in net profit (EPS)a year from now.
What will you give P/E for a company such as AAGH giving 1) in China super hot market, 2) more shows are to be under the umbrella, 3) EPS’ potential of $0.08 a share ending 3rd qtr 2008? 4) the Olympic in China is soon to take place, and 5) this company is small and fast growing. Advertising revenue will be pouring into the country.
Additionally, AAGH should have only given Mak his bonus preferred shares if he met preset revenue and or earnings goals for the Company...not just given him control of Company before he had created any shareholder value...IMO
That's why I stick by my assertion that AAGH made a mistake by getting in the TV broadcast venue altogether when their core product was so strong. They hould have used the S-8 shares to buy up a competitor in their core business and dropped the rest of this nonsense. Stock price would be at least a $.25 a share if they had gone the alternative route
A net loss of $3,930,322 was experienced from our TV Entertainment segment for the twelve month period ended December 31, 2007 Loss is primarily attributable to the costs related to operations of the Who Wants To Be A Millionaire? TV program and a $2,000,000 impairment resulting from the termination of these operations.
I thought the IR said that all ad slots were sold for 2007 for WWTBAM. It looks like from reading the filing the WWTBAM project is completely abandoned. I wonder if "singbee" and other projects will have the same cache to attract investors to the stock. AAGH will havve to prove itself going forward that it can make a profit if stock price is going to appreciate going forward...hype or potential apparently won't work anymore...IMO
During the twelve month period ended December 31, 2007, our revenue for the TV Entertainment segment was $118,961 mainly from the broadcasting of our first TV entertainment program - the mainland China version of Who Wants To Be A Millionaire?.
This would have been revenue from WWTBAM from Sept 20 - Dec 31 2007 or approx 13 episodes of WWTBAM (not counting repeat Sundays).
Another day another $.0001 a share for PRSF...the more things change the more they stay the same...ROFLMAO
Heptikus,
I guess I did forget about Mak's conversion in the 4th Q. I was hoping they could at least have the 4th Q profitable.
After looking over the recent numbers as preliminary figures for full year in a reacent PR I think it is a great chance that 4th Q will actually be profitable...as they shouldn't have an S-8 expenses or any potential writedowns on WWTBAM (as that announcement would be in the First Q just finished). My preliminary guess is a profit of around $1.25 million for the 4th Q or about $.01 per share.
The recent shows in their potential arsenal don't have the excitement that WWTBAM had for speculation from traders/ investors. Therefore, even though they may well pay off better in profits it will take a few quarters of profit to see how much they will contribute to the bottom line. I don't think HAN is going to post more speculative numbers of his of what he thinks those projects can bring in revenue and profit wise like he did with WWTBAM...LOL
PRSF should be ready for another R/S anytime. This time Karney IS going to deliver shareholder value...he promises...ROFLMAO
Yes,
Because of the leap year this year report is due 15 days after March 30th or April 15th. The late filing has just been submitted just as I surmissed. It will be an interesting read when it does get released on the 4th Q numbers for WWTBAM.
Last year AAGH filed annual report on 4-16-2007 after they filed for a 15 day extension. I figure it is a fair chance they do that again.
IMO, S-8 odds probably in the 50% range. If management pays back some of their $1.976 million owed to AAGH that may alleviate some of the uncertainty of S-8 occurring in the immediate future.
IMO, investors perceived WWTBAM was the prize jewel and where willing to bid up AAGH stock price accordingly based on its potential. Since AAGH potentially dropped the ball for whatever reason on the WWTBAM project marketplace has become skeptical that AAGH can successfully diversify into this arena. The bottom line is can AAGH sell ad revenue in amounts that can make any of those programs profitable. There core business appears strong so the marketplace is in a wait and see period (prove it state) with AAGH, IMO.