Strategic Asset Leasing Inc (LEAS)

[stervc]

Mariner*, with your MMTE DD, consider this Valuation...

Thanks for sharing your MMTE DD as it is superb!

Please correct me if I am wrong, but from the last two PRs released by MMTE, it definitely confirms that we are still significantly undervalued... especially based on its confirmed potential alone:
http://biz.yahoo.com/iw/080821/0427301.html
http://biz.yahoo.com/iw/080822/0427526.html

I still say that the "rubber is meeting the mat" here with MMTE. Here is what I derived from what was released for being the oil output per well...

2 Barrels Per Hour x 24 hrs = 48 Barrels Day

48 Barrels Per Day x 30 Days Per Month = 1,440 Barrels Per Month

1440 Barrels Per Month x 12 Months Per Year = 17,280 Barrels Per Year

Now this is 17,280 Barrels of Oil Per Year from one well.

The price of oil is somewhere in the area of $120.00 Per Barrel I believe, conservatively speaking. So…

$120.00 x 17,280 Barrels of Oil Per Year = $2,073,600 Revenues Per Year

Now that is $2,073,600 Per Year from one well where they have a total of 60 wells where it is very prominent to the tune of a 100% success ratio for hitting oil and gas as confirmed from the likes of NFX:NYSE as I confirmed from NFX below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=30374822

This means that the odds are greatly in our favor that MMTE will hit a minimum of what they have captured for the success of their first well for their complete inventory of 60 wells.

This means that MMTE will have a very positive probability for maximizing this potential of the amount below per year for Revenues:

$2,073,600 Per Year Per Well x 60 Wells = $124,416,000 Per Complete Inventory of 60 Wells

Let’s now factor in a conservative 25% Profit Margin although from the earlier valuation post I made, I confirmed that the profit margin is higher than 25% for MMTE. However, again, let’s just remain conservative and go with a 25% Profit Margin to derive “Net” Income. Let’s also keep this simple and consider that the 75% Expense Margin represents “Net” Expenses which will allow the amount of Net Income to be reflected as below:

$124,416,000 x .25 = $31,104,000 Net Income

Now let’s factor in the OS of 1,309,946,130 shares to derive an Earnings Per Share (EPS)…

$31,104,000 ÷ 1,309,946,130 (OS) = 0.0237 EPS

MMTE would trade under the Basic Materials Sector as indicated below:
http://biz.yahoo.com/p/1conameu.html

Within the Basic Materials Sector, MMTE would likely trade within the Oil & Drilling Exploration Industry which currently indicates a 18.00 P/E Ratio below:
http://biz.yahoo.com/p/123conameu.html

For this reason, we could now consider using the P/E Ratio of 18.00 as the growth rate to use as the multiple for the Industry in which MMTE would likely trade to multiply with the EPS to consider the true potential of the MMTE price per share below:

.0237 EPS x 18.00 PE Ratio = .426 MMTE “potential” price per share

Now, also, keep in mind that this is only the ”potential” valuation from MMTE hitting oil for each of the total 60 wells as a minimum per the results from the recently drilled two wells. Now add the gas potential valuation into this potential oil valuation and I think one could see why some are a little excited about their MMTE investment. So far, I like our odds.

To further discuss, that .426 valuation was not only based on oil, but was based on 60 wells. If we were to base the 17,280 Barrels of Oil Per Year from one well on just the two wells that have been ”officially” confirmed by MMTE to have hit oil at the rate of barrels mentioned above, then we can see where we should be sitting price wise as a new bottom base.

So, 17,280 Barrels of Oil Per Year Per Well x 2 = 34,560 Barrels of Oil from 2 Wells Per year

34,560 Barrels of Oil x $120.00 = $4,147,200 Revenues Per Year from 2 Wells

Now, with taking under consideration the same .25 Profit Margin logic that I posted above to derive the EPS of .0237 for the .426 price per share for 60 wells, please consider below for a derivation of 2 wells that should generate a minimum amount of Revenues of $4,147,200 Per Year:

$4,147,200 x .25 = $1,036,800 Net Income

Now let’s factor in the OS of 1,309,946,130 shares to derive an Earnings Per Share (EPS)…

$1,036,800 ÷ 1,309,946,130 (OS) = 0.0008 EPS

Now, with taking under consideration the same PE Ratio logic I used above to derive the 18 PE Ratio, consider below:

.0008 EPS x 18.00 PE Ratio = .0144 MMTE “Current Value” per share

Now this is only me from doing my DD as I have explain above, but this is why I think MMTE should be trading at a bottom of .0144 per share and a max (for now) of .426 per share. Again, these are only my thoughts as to how I am seeing things here with MMTE. Again, this is a valuation that is just based from oil and does not include gas.

v/r
Sterling





Sterling's Trading & Investing Strategies:
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