Monday, March 13, 2017 3:42:44 PM
Following the 8-K filed by MMEX below, I will show how the ”potential” valuation for MMEX is approximately .583 per share based on the info from the 8-K below:
Based on the math from the 8-K info above, I have derived how it is fair to presume .583 per share as a fair valuation for MMEX:
50,000 Barrels Per Day x 365 Days Per Year = 18,250,000 Barrels Per Year
The link below confirms that the current retail price for a barrel of oil is $48.00+ per barrel. I will presume the price of oil to be $40.00 per barrel for the purpose of this post:
http://www.nasdaq.com/markets/crude-oil.aspx
18,250,000 Barrels Per Year x $40 Per Barrel Retail Price = $730,000,000 Revenues
The link below confirms a Price to Earnings (P/E) Ratio of 39.94 for 2017 for companies existing within the Oil/Gas (Production and Exploration) Industry:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html
The P/E Ratio is the variable that is multiplied by the Earnings Per Share (EPS) to get where a stock should fundamentally trade compared to the other stocks within its Industry or Sector. The links below should help to better understand the P/E Ratio logic:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170
http://www.investopedia.com/terms/p/price-earningsratio.asp
Because of the $30,000,000 listed as an Accumulated Deficit, this means that it is going to be officially used as a Tax Shelter as a Net Operating Loss (NOL). This will greatly enhance the profitability of MMEX. I was going to presume a Net Profit Margin of 10%, but with adding this $30 Million NOL, this makes it very fair to presume at least a Net Profit Margin of 20% for the MMEX operations. I will explain more about the NOL as a Tax Shelter after I explain the share price valuation below.
$730,000,000 Revenues x .20 Net Profit Margin = $146,000,000 Net Income
I believe to air on the side of caution, let’s presume a worst case scenario for the Outstanding Shares (OS) being maxed out to be 10 Billion shares:
Net Income ÷ Outstanding Shares (OS) = EPS
$146,000,000 Net Income ÷ 10,000,000,000 (OS) = .0146 EPS
EPS x P/E Ratio = MMEX Share Price Valuation
.0146 EPS x 39.94 P/E Ratio = .583 per share
Please, anyone with an issue with any of the variables I used above to derive the MMEX valuation, simply use the ”Substitution Property” to replace that variable and I am still confident that… bottom line… it will still reflect that MMEX is worth quite a few pennies.
MMEX $30,000,000 NOL Tax Shelter
MMEX has stated to have $30,000,000 listed on their Balance Sheet as an Accumulated Deficit within their 8-K fled below which is also no confirmed within its recently filed 10-Q filing below:
http://ih.advfn.com/p.php?pid=nmona&article=74066594
http://ih.advfn.com/p.php?pid=nmona&article=74079986&symbol=MMEX
This greatly justifies the company’s position as a huge merger candidate. The MMEX public entity is very attractive for a huge positive Net Income generating company wanting to merge into MMEX which is why this deal is being completed. This is because of the $30,000,000 being available to be used as a 2 year carry back and 20 year carry forward Tax Net Operating Loss (NOL) to reduce the taxable income for a merging company’s future tax years. That’s an average of roughly $1.5 Million in the reduction of its taxable income per year over a 20 year time frame or $3 Million in the reduction of its taxable income per year over a 10 year time frame. This is basically like adding $1.5 or $3 Million or so back into the MMEX amount of Net Income generated. Merging this project into MMEX would be better versus registering as a new entity or IPO-ing because you won’t have such huge ”tax shelter” otherwise as a huge tax benefit already existing.
Below are some good videos to listen and understand the logic regarding Net Operating Losses (NOL):
http://www.investopedia.com/video/play/net-operating-loss-nol/?ad=dirN&qo=serpSearchTopBox&qsrc=1&o=40186
http://www.investopedia.com/terms/l/losscarryforward.asp
http://www.investopedia.com/terms/n/netoperatingloss.asp
Net Operating Losses (NOLs) on the 3 Financial Statements
https://www.youtube.com/watch?v=p_53cPDNxCQ
v/r
Sterling
Exit Strategy & Etiquette Thoughts for a Stock
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128822531
Recent MMEX News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 09/16/2024 05:21:55 PM
- Form DEF 14C - Other definitive information statements • Edgar (US Regulatory) • 09/06/2024 01:41:32 PM
- Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend] • Edgar (US Regulatory) • 07/30/2024 02:08:15 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 07/29/2024 04:55:42 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/05/2024 09:51:51 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 01/03/2024 01:18:51 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 12/14/2023 03:11:12 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/06/2023 04:48:44 PM
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