Rafael Pinedo interview - summary:
77% increase in revenues
80% net profit margin (yahoo finance says 25% according to Rafael)
ROI is 24% and will be over 25% next quarter
ROE = 25.3% and is set to continue growing
Next PGPM will issue debentures and continue exploration
Their strategy will continue to be the acquisition of marginal fields where there was existing production. The larger oil companies had to shut these down because they were not profitable due to the companies having a higher cost of operation. 50 BPD fields are too small for the larger co's to make a profit.
PGPM fields vary from 1 to 2 barrels a day, all the way to 30 - 45 barrels per day production
All well logs and seismic work is done and they are able to work with existing equipment at the wells and do minor engineering work to get them up and running. It takes 1 - 2 months to make each well operational again.
By the end of 2006, they will have activated a large number of the wells available in their 12,000 acres.
Company experience
1. Rafael Pinedo has 17 years in IT software and worked as a consultant for companies such as Oracle. His area of expertese is in risk vs reward exploration. He has 4 years of field experience in doing field assessment, therefore determining which fields to bring on line before others.
2. Steve Richardson - senior VP. 25 years in oil and gas exploration. He is working on new and potential acquisitions of small operations in N W Texas.
Rest of management team are in the field, some with 20 - 40 years experience.
The future
ROI and net profit are increasing daily, although RPinedo concedes that this is dependent on high oil prices.
12 - 24 months will be finished with 50 - 60% of the development of existing properties (at the moment they have 20 - 25% of existing properties up and running).
Next year, they rekon they will have twice the assets, twice the income and twice the net profit margin.
Rheddle comment:
His English sucked, but their business plan is quite simple and will work based on continued high oil prices.
I think we can expect some nice PR as time goes on stating the number of wells that are producing and the total daily production of those wells. That will make stock valuation easier, but we are clearly very undervalued at the moment.
AI
