Remember that we will be profitable this qtr and earning just 1 cent per share which is earning of just 7.5 mil whether not in this qtr but certainly for the last 6 months could take us to 75 cents as per the letter. That may be a bit too high but certainly takes us to 20 cents and higher. This is what they are afraid of. And if Belize comes in soon look out for the pps to go way up and that could be in a week or two. This is from the letter.
Treaty’s net income estimated at $10,222,000 on $25,000,000 of gross sales would earn a penny and a half even if production stayed flat without any increase (which is not happening) on 700 BOPD. Now understanding that the growth starts to ramp up dramatically at these levels, the street would have to look at Treaty in a similar light as companies with comparable growth .The street is now giving such growth stories as much as a trailing 12 month P/E of 50 for 2011 EPS. Given the same multiple, Treaty’s EPS of $0.015 would give us a $0.75 cent stock. Below are charts of a company that was in a similar situation in 2009 as Treaty is now and a chart of TECO.till have hundreds of drill sites available on their current leaseholds. After the 9 well project is completed, production levels will be above 1000 BOPD giving them net income of around $16,000,000. Earnings per share would be $0.02 and the stock should be around a Dollar given similar circumstances. Again, Treaty has hundreds of drill sites available on current leaseholds, keeping cost down by owning all of their own equipment and having a significant oil find in Belize that are not even in these numbers at all. This sets the stage for growth on a year over year basis to be staggering!!
