Great new info.
Greeneyedhawk,
Your posting of the updated DD #4 page is an eye popper, indeed.
Your conservative numbers are right in the same low range as my own personal projections – figures that caused me to purchase 2.6 million AMEP shares at an average share price of about 3.7 cents. Even at these very conservative low projections, AMEP is a screaming buy.
But since bulletin board stocks are traded primarily by momentum players, day traders, and other forms of “dumb money,” there isn’t much smart money here yet. That will change in the first quarters of ‘06, when well-numbers and revenues begin to ramp up. Those of us who’ve gotten in early will look pretty handsome next summer. (I’ll smirk a bit – based a good deal on your detailed diligence, as in your recent new post.)
Your fleshing out of the new well-spacing and new pay zones is even stronger evidence that AMEP will be the best stock purchase that could have been made in 2005. Of course, that applies only for astute investors, not day-trading adrenaline junkies. I’m looking forward at least 36 to 48 months before I’ll sell a single share, when the share price should exceed a dollar or more.
But for those of us who have truly invested in AMEP, we need to also ponder AMEP’s eventual dividends. Certainly for the near future, for several years, perhaps, all available corporate revenues will be plowed back into the company for ramped operations, increased lease holdings, and other future revenue-generating purposes. I’m impressed that Charles Bitters takes the long view himself, not squandering current assets on quick loans and other long term encumbrances.
So, when might AMEP distribute dividends, and what might they be? It’s way too early to tell. But the fact that the Barnett Shale wells produce at high rates for decades means that at some time in the future (depending on the rate of well drilling) the AMEP leases will be fully perforated and the company will be continually flooded with quarterly revenues, probably measured in 100's of millions of dollars.
One thing that you haven’t discussed (because it’s still in the future) are the implications of HOA-800 in other wells. Yes, AMEP will be able to generate nice initial working funds from the 193 wells you’ve described. But who would think that’s the end of the HOA-800 story? How many other “exhausted” wells are sitting around the Texas landscape awaiting the oozing magic of HOA-800 technology? What future deals will AMEP be able to make on those wells? Perhaps most will be merely license deals, where AMEP simply gets quarterly bank deposits on hundreds or thousands of old wells brought to production with their proprietary product. A future cash cow? You bet.
Smart investors will not dismiss the great potential of this developing technology. It would interesting to learn the number of vacant Texas wells that could respond to AMEP’s unique and proprietary HOA-800 technology.
It’s clear that nothing about AMEP’s potential is complete or mature. But whatever happens, even at the most moderate or conservative rates you’ve presented, over time the company will reward investors handsomely.
Greeneyedhawk, as you should have, you’ve been extremely cautious for every datum. Your diligence and presentation at these levels clearly shows the value of buying AMEP shares. But in fact, the typical field data for fractured horizontal Barnett Shale wells can be in the 2.5 million cubic ft/day range or above. And making a budget to heat a house next winter with gas at $9/Mcf is dangerous. Ten dollars is almost surely way too low. Twelve to fourteen dollars might be closer.
I’m a longterm holder of AMEP shares. Do I think that the company is going to be selling its Barnett Shale (or other) methane for only 10 bucks in two or three years? Not a chance. In my own spreadsheet projections, I’ve plugged in all of the higher levels, and the numbers over on the right, in the columns showing calculated share values, dividends, and total values are plainly stunning. I firmly believe that two years from now your posted, conservative numbers will be seen to have been well below actual figures.
Again If AMEP can generate only the revenues you describe in your recent posting, the stock is a screaming buy. But if I were forced to pick some future numbers, I’d say that they would easily be double your projections. Let’s sit back for a year or so and watch the numbers grow.
For the many others, who in their own diligence followed yours, I express my great thanks and appreciation. You have personally confirmed, even expanded, all of the positives I’ve based my share purchases on. Great work. My deep thanks.
– Falconer66a
AI
