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Re: Rocketred post# 4

Tuesday, 04/17/2007 5:39:22 PM

Tuesday, April 17, 2007 5:39:22 PM

Post# of 11
In the fall of 2006, STP was trading in the $0.70 to $0.80 range.
At that time it had just announced its acquistion of 80 % of 7100 acres of oil sand leases and had raised $10 million thru a equity PP.
Subsequently, that net acreage increased to about 11,000 acres and its first resource estimate was announced in early 2007, subsequent to seismics and a 12 hole drilling program.

PFM is now where STP was in the fall of 2006, having announced that it is changing to an oil sands junior and has already acquired 14,700 acres.

In addition to having more oil sand acreage, PFM is also ahead of STP.... as it was in the fall of 2006... for several reasons.

PFM has raised $11 million recently, with only $3 million of that from equity...the remainder came form selling about half of its existing production.
PFM now has only 36 m shares fully diluted, whereas STP had 53 million fully diluted subsequent to its fall/06 equity raise.

More importantly, PFM still has existing production of 170 boe/day of the sweetest crude. At current prices, that is grossing about $ 5 million annualy and from which it should be able to squeeze about $2.5 million in cash flow..enough to pay operating expenses for a full year for several years into the future.

At 5 times cash flow, that existing production would give PFM a valutaion of about $0.35/share..exclusive of its oil sands holdings.

That is, instead of trading at about $0.75.....where STP was last should be trading above the $1 level.

Consiering also that PFM has 17 million shares less than what STP had last fall, one can can at least another $0.25 to $0.50 per share ( 17 m shares at $0.75 would raise about $13 million or about $0.35/share ).

That is, PFM could trade in the $1.25 to 1.50 range and still be more than comparable to where STP was in Nov/06 ( is has more acreage ).
STP has tripled from that level, implying that PFM could be over $4 by this time next spring..more if they add more acrage.

This is not to say that STP is fully valued.
Far from it.

It is a superb buy , with strong gains coming in the next few months.
Myown 1 year target is $7.50 for STP.

As for PFM, load up at these prices.
They wont last

Anyway, thats how I view PFM and where it is likley to go in the short term..

"these posts are not of a licensed investment advisor or analyst nor does he give out buy, sell or hold advice to anyone"

"A Blind Bat could do a better job at regulation"

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