GRPR
For a company sitting on $7 million in dormant oil rich assets, the June 30th announcement regarding a strategic funding agreement was the exact news an investor wants to hear. Asset rich cash poor GRPR just moved from penny stock purgatory to lottery ticket potential.
The future is all about “IF”
IF GRPR is approved for drilling permits, IF drilling is successful, IF they pull oil out of the ground….IF everything works out….. $$$$ How high could it go???
I made a very rudimentary stab at GRPR price potential.
Browsing through SEC filings has not provided a useable estimate for the amount of oil reserves on each lease therefore, I am just going run with the estimate provided in the June 30th announcement of 2,000 – 3,000 barrels a day.
Using the middle number of 2500 barrels per day X present oil price of $82.25 X 365 days = guesstimate revenue of $75,053,125 per year.
In November, 2011 GRPR acquired 50% working interest (37% net revenue interest) in approx. 4000 acres of the Kreyenhagen trend and Joaquin basin.
Therefore, the joint venture could possibly reap a gross profit of $75,053,125 X 37%= $27,769,656 / June 15 shares outstanding 6.3765 billion =.0043 per common share.
For funding the production costs of 10 wells Santa Rosa will rightfully share approximately 50% of the revenue. Bringing GRPR to a gross profit potential to .0022 per share.
As you know, with penny stocks the market either responds with complete vengeance or utter alacrity, thus market price is seldom rational. NYSE Oil stocks are just as irrational P/E ratios are as low as 6 or as high as 325. I decided to use the average P/E of the top five oil companies with the highest ROE (Return on Equity) which is =11.52 (.0022 gross profit per share X 11.52) Bringing the gross price potential with full production of 2500 per day to. $0.025 per common share outstanding. A reasonable net might be < 50% or < $.0125.
All just a wild guess, but what I do know is the price will not be at .trips1 any longer.
So what are we waiting for???? I too believe it is the blunt nose lizard:
In 1971 our blunt nosed buddy was saved from going the way of the Doe Doe bird by being listed as an endangered and fully protected species. Currently the Blunt-nosed leopard lizard only occupies a few, scattered, undeveloped plots of land on the floor of the San Joaquin Valley and in the foothills of the Coast Range.
Our high leaping buddies like to sleep it off during the winter and emerge from their burrows in early April. They reproduce until the end of June, the eggs hatch from early July to late August. They remain active until October or early November. Then it’s back to bed again until the following spring.
Any study for a species as protected as “blunt buddy” will probably continue up until hibernation.
If you are wondering when a drilling permit will be approved … I have a rather satirical equation one could consider:
Wait until “ little blunt buddy” hibernates + (time for environ consultant to write study + submit study to California’s notoriously long permitting process)2 / oil permits already in pile - (5 day work week with no OT + paid holidays X coffee breaks)= APPROVED PERMIT
*The application is more than likely in the pile, it just won’t move until the Lizard study is complete.
I work in an industry that must submit an environ application for almost every project. A simple application usually takes 3 months, a back and forth application with further requirements, more like 6 months. Plus we often battle the political aspirations of the day IE: All economy stimulating applications such as placer mine starts will be given first priority.
Unfortunately, patience is all we can have right now.
A couple more thoughts……
+Thanks in large measure to hydraulic fracturing; the U.S. has reduced oil imports from countries such as Iraq and Russia by 30% over the last decade. Yet in California, imports have shot up by a third to account for more than half the state’s oil supply. Therefore, if there is any State that would encourage “home grown oil” run through its refineries its California.
+I browsed through the power point presentation on GRPR’s web site and I notably enjoyed the photo of the oil bubbling through the creek bed. I do not believe finding oil will be a problem.
+GRPR is a Darwin survivor, unfortunately there has been a great many stock issuances / conversions that have allowed the company to keep its head above water while the company made $0 ….but the point is, it did survive. With development funding in place one year could change everything.
GLTA
