TIV becoming the love of my life:
From Yahoo Board:
13-Jul-08 12:09 am Tri-Valley (TIV) continues to increase production, with the following status:
They are now producing over 2048 BOE/day, how much over, we should find out fairly soon.
Production capacity is 3,500 BOE/day from all three fields. Company is profitable at between 1,700 and 2,000 BOE/day. Opus checks are growing each month. Up over 200% since April, with May and June production taking these working interest checks higher by another 100%, with July production now in progress, assuming only 2048 BOE/day, double that amount yet again. This is the pragmatic yard stick by which to measure rapidly increasing production.
That production and revenue generation is the result of only 9 new wells, two of which are still being prepared to place on production, on 3 of 433 acres. This provides some interesting math., if you care to work it out.
Another 12 wells are planned on an adjoining 15 acre parcel, over the next few months.
The next planned wells should get production to 10,000 BOE before the end of 2009.
Past that, a total of 70 wells are planned on two reserves over the next two to three years, making the potential for this teeny tiny, teeny weenie, tiny teeny company staggering.
The implications for Tri-Valley stock are enormous.
By my calculation, for every 1,000 BOE/day over 2,000 BOE/day, TIV should add 25 cents per share annualized, which would provide, by my calculation, earnings of $2.00/share by the end of 2009.
And of course, my favorite model for TIV expectations is a company called GMX Resources (GMXR). GMXR with trailing twelve month earnings of $1.12, closed at $84 yesterday. Again, some extremely interesting math, if you care to partake.
Another factor to consider with Tri-Valley is the possibility of offers to buy the Pleasant Valley "proven" oil field. Those offers would be in the $3 billion and up range, with oil prices now in excess of $140/barrel. That would bring $28K per Opus $1K invested and about $28/share to Tri-Valley, whose stock closed at a paltry $6.88 Friday.
Historically, any junior oil company, at least in California, surpassing 2,000 BOE winds up selling out to a larger producer, or in the company itself being acquired - at a handsome figure.
On top of all that, the Russell Index funds have acquired 2.1 million shares of TIV stock which reduces the float by that amount, so the float, with over 2.5 million shares short has just become tighter, as has the grip on TIV stock by long term investors.
When will TIV stock reflect these conditions? No one can say, but it sure seems reasonable that the stock must begin to reflect such positive results in the near future.
