MWM, can we get this post below added to the ibox, thank you sir!
Natural Gas Revenue
The natural gas production run at half of the total max capacity, is 95,850(MCF) per month.
Take a look here. If CHAG were ONLY a natural gas production company your intrinsic value is as follows:
$4 profit per (mcf) is $383,400 per month, and $4,600,800 per year from natural gas production.
$4,600,800 divided by the O/S 60,755,030 is $0.075 multipled by 4x's earnings is $0.30 per share value.
Run a full capacity, you could be looking at $0.60 PPS
And I thought the natural gas production was just an added bonus.
Oil Revenue
The properties we just acquired are currently producing 3,000 barrels of oil per month. Only 100 of the 631 wells are currently producing and the CEO stated "We hope to restore production in the vicinity of 10-20 wells a month."
Should we not begin to assume that total oil production could be in the 18,000 barrels of oil per month range? Once all of the wells have been restored that is.
That puts Chancellor on pace for revenue in the neighborhood of one million per month ($65 oil) by my estimate. And this is only the oil production and does not factor in natural gas production.
That is $12,000,000 in oil revenue alone, annually.
Current market cap for Chancellor is $12,151,006 @ $0.20 per share.
If it were to trade 4x's earnings, we get an intrinsic value of $0.76 per share.
What's more?
Oil reserves in the range of 750,000 barrels. At $60 dollars per barrel wholesale you have an estimated value in the ground of $45,000,000.00
$45,000,000.00 divided by the O/S of 60,755,030 = intrinsic value of $0.74 per share
Conclusion:
With a conservative perspective, I see around $15,000,000 full year after EBITDA.
$15,000,000 divided by the O/S is $0.246 multiplied by 4x's earnings is $0.987 PPS.
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