Absolutely Bull Trader. The real value of Breitling Energy is in the oil and gas reserves that weren’t included in the recent 10-Q.
The current net reserves of oil alone is around 500 MBbls. If you factor in net oil and gas together you would have reserves worth around $50M at current prices.
The farm out agreement with Stellar Energy that Breitling will be capitalizing on soon comes from the agreement between Stellar Energy and Clayton Williams (NYSE: CWEI) for roughly 3,700 acres in the Permian basin that shows the potential for multiple pay zones making the potential for additional net reserves very likely in the near future.
Breitling has historically received revenues primarily through non-operator royalty interest payments.
The move for Breitling to move into a 100% working interest in the Permian Basin puts them in the driver seat to develop its own oil and gas reserves on prime property that was previously controlled by Clayton Williams.
In the past, Breitling with royalty interests only, had no control over operator decisions regarding drilling or shutting in wells or any other decisions.
This is a huge step for the company, and if they can bump proven, probable and possible net reserves to say $200M with this working interest farm out, that market cap seems a little more reasonable.
IMO and FWIW.
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