I apologize for my lack of clarity. The $7 million asset value I made reference to in my first post is the total assets listed in the March 31, 2014 consolidate balance sheet. Not at all a figure for what Santa Rosa resources will be contributing. (I have no idea what Santa Rosa estimates the cost of drilling)
When I crunch numbers for a stock, I try to guess a quazi-realistic picture. Even using my conservative yet optimistic $.012 price still puts this stock at 100+ bagger. ($1,000 gamble might become $120,000)
Could my P/E be out to lunch? YES even the best analysts on Wall Street cannot predict the outcome of a stock and I am no expert. This is penny land after all and IF GRPR produces an oil income the sky could be the limit. Who knows?
I too could not ”fix on” the idea of investors going after $7 million in dormant assets, of course, that is not what Santa Rosa investors are going after. The dormant $7 million is the equivalent of a prime real estate lot prior to the income generating luxury hotel. What the Santa Rosa investors are going after is the guessimate- potential $27 million dollar per year joint venture after their money develops the leases. Giving the opportunity for an extremely tax favored annuity for the life span of the wells .
If an investor buys into the Santa Rosa joint venture they are given preferential treatment from the federal government in the form of Tangible and Intangible investment allowances. What this means is that if you invested $1 million into the drilling of an oil well you would be allowed to write off or deduct the Intangible amount of your investment off of your annual gross income 60% to 75% of your investment could be written off against your personal income of the year you made the investment.
Santa Rosa offers an equal investment based split of net revenue. For example: if 20 people invest $1 million into this project and it grosses $13.5 million – expenses. Each investor might gross approximately $675,000 – expenses per year for the life span of the wells. Not a shabby yearly income if you can stomach the high risk investment.
Would I chase this?? If my goal was a high return annual income, YES
