Mike, you are right on. For some of the newer people, I will try to review some of the basic points of value in AMEP's asset base, from my perspective, which should support a much higher PPS:
* AMEP has 100% NWI on 7000 acres in the Barnett Shale area, which is the 2nd highest producing NG location in the US.
* A recent article represented that land in the Barnett Shale area was sold for as high as $13,000 per acre. With 7000 acres, that totals around $91 million in value alone, or a PPS of $.185 for this property alone.
* AMEP has already received 3D seismic reporting on at least 2500 acres, maybe more, of this Barnett Shale property. This information, coupled with a few producing wells on this property, gives AMEP expanded visibility to the property value. The recently announced Murphy-Nash #1 well was drilled just 1400 feet from a major producing well that has generated almost $1.4 million in revenue since mid 2004. This older well is now being re-fraced to significantly increase production. The Murphy - Nash #1, announced September 12th, has 5 defined pay zones, is waiting for production results, upon stabilization.
* AMEP has 193 wells under its PRI BDC. This will be a smaller revenue generator, with estimated proven oil reserve of around $68 million.
* AMEP owns 2 full rigs. A recent article stated that a new rig could cost as much as $15 million and take 12-18 months to deliver. Rigs rent out for around $20,000 -- $22,000 per day. AMEP could use these rigs to build out the 7000 acres, rent them out to a third party, or leveraged them to acquire interest in other properties for a fee and/or percentage return.
* AMEP posted its 10Q on time this week. The company is preparing for the accounting changes in moving from a BDC corporation to an operational reporting company, which is subject to shareholders approval. Some of the key financials reported in the 10Q were, that the company's net assets increased by $2M and that no new shares were issued for capitalization. AMEP has no debt.
* AMEP has 4-5 new or re-fraced wells, either completed, or near completion. Just adding a couple of wells to the company's current financials, could make AMEP profitable and in a positive cash flow position.
Given that this is the case, AMEP could build out it owned properties, with its own rigs, exponentially increasing revenues and profits, without further dilution.
When you add the value of the 2 rigs owned, the value of the PRI BDC, and the value of the 7000 acres owned in the Barnett Shale, your PPS should be significantly higher than the current price. Bottom line, this in not a $.034 stock. It is being manipulated by bashers and MM, as AMEP has created the void with its silent and lack of PRs. In this lies the opportunity.
AMEP with its valuable properties, rigs and no debt, could be an attractive take over target.
I am giving my view of the opportunity, but you must do your own DD.
