Replies to post #325 on Marksmen Energy Inc. (MKSEF)

[lovethatgreen]

He states each well worth 25 million.

At 50 bucks a barrel that's 500,000 barrels.

How fast they can pump it is the q.

500 barrels a day would be stellar.

The current sp with what it appears they have doesn't connect not even close.

[trepid]

I started working on the numbers and figured I would post them here. If I made any mistakes feel free to correct them.

According to the CEO's last interview, MKSEF expects $25 mil in revenue (at $50/barrel) with a $1.5 mil cost per well, and they expect 8 to 10 wells this year. They have a 60% interest in the wells.
https://upticknewswire.com/featured-interview-ceo-archie-nesbitt-of-marksmen-energy-inc-otcqb-mksef-2/

So I figure $25 mil - $1.5 mil = $23.5 mil rev per well
$23.5 mil rev x MKSEF 60% interest = $14.1 mil rev per well
$14.1 mil rev x 8 wells (lowballing) = $112.8 mil rev from wells drilled in the first year.

The missing piece is how this spreads out across this year and next year. Some % could be applied based on an assumed schedule. The CEO did say that he expects oil to start pumping from the first well in the next few weeks.

I saw this at http://www.gonzoilinc.com/html/faq.html:

Good wells last a long time; bad wells do not. Clinton Sandstone wells have a typical life of 15 to 20 years. However, there are some Clinton wells in Ohio that are more than 50 years old

If we lowball again and use a 20 yr lifespan then $112.8 mil rev / 20 yrs = $5.64 mil rev per year for this year's drilling. Only some % of that would fall into this year, not sure how much.

If we want to use profit to figure out the share price, maybe use 40% of revenue? $5.64 mil rev x 40% = $2.256 mil profit per year.

$2.256 mil / 88,228,565 OS = .02557 at a PE of 1. With our current price at .176 our PE is only 6.88, again based on only this year's drilling and lowballed numbers.

Found this at https://www.investopedia.com/ask/answers/012015/what-average-pricetoearnings-ratio-oil-gas-drilling-sector.asp

Oil and Gas Drilling P/E Ratios
As of January 2015, the average P/E ratio for the oil and gas drilling sector is 25.4. The industry average includes the metrics of large-, mid- and small-cap companies including Canadian Energy Services (CEU) with a P/E ratio of 20.98, Hugoton Royalty Trust (HGT) with a P/E ratio of 7.54 and Pioneer Energy Services Corp (PES) with a P/E ratio of 38.84.

If we're conservative and use a PE of 12 we get a share price of .3068 (74% over today). A PE of 25 gets us to a price of .6393 (263% increase). Once oil starts pumping and the quarterlies start showing money coming in I believe we'll move to that level, and we'll continue moving up as more wells open in 2019 and beyond. Maybe they'll send out their multi-year plan in the next few months, moving us up quicker.