New Frontier Energy Inc (NFEI)

[otcbargains]

Nfei recently filed two quarterly reports. For the first quarter of the year,
they reported revs of 1.12 mil and net profit of 528K. For the second q they reported
revs of over 1.3 mil and a loss of about 113K. Looking at the second q results they
had an unusually large amount of expenses for Depreciation, depletion, amortization
and asset retirement obligation accretion. For the six months these expenses were
over 1 million with about 3/4 of them coming in the second q. Looking at past results
these expenses would appear to be unusually large. If not for these unusual
expenses net profit would have been close to .02 eps for the 6 month period.

NFEI also boasts a book value of over .15 per share. I am alerting it here friday
to give everyone a chance to do plenty of dd and this particular stock needs
plenty because a lot has happened. First of all I noticed a 500 to 1 R/S or so
I thought. Upon further review they did a 500 to 1 R/S immediately followed
by a 1 to 500 F/S. They did this so they could buyout shareholders with small lots
at .22 per share and reduce the number of shareholders to below 300 so they could
delist and avoid the sarbanes oxley expenses like so many others did at around the
same time. It is fully explained here.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8113475

The next issue is they have gotten rid of their CEO and another board member and
former ceo.

http://www.otcmarkets.com/otciq/ajax/showNewsReleaseDocumentById.pdf?id=129955395

http://www.otcmarkets.com/otciq/ajax/showNewsReleaseDocumentById.pdf?id=9797510

This is potentially worrisome because one of these former officer owns a huge amount of
shares and when an officer leaves there is always the possibility that those
shares are going to hit the open market.

I personally was aleviated of these fears at least at this extremely low level
due to finding what the officer paid for the shares.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7836050

As you can see he paid .12 for some of them.

and He paid .10 for a huge chunk.


In November 2009, and February 2010, the Company sold 6,500,000 and 8,000,000 shares,
respectively of its Common Stock at a price of $0.10 per share to Iris Energy Holdings Limited,
an affiliate of the Company whose sole director is Michel Escher, a director of the Company.
In connection with these sales of common stock to Iris Energy at $0.10 per share, the Company
recorded share-based compensation expense of $1.9 million in general and administrative expense,
representing the difference between the market price of the stock on the date of the sale and the
sales price of $0.10 per share of common stock.

I can't imagine he would pay .10 and .12 for shares and then sell anywhere down here.

Just to summarize the book value is .154, they are on pace to make about .01 eps for the year
but if not for the unusually large Depreciation etc. expenses the net profit would be much
higher. It certainly looks like a hugely undervalued stock to me.