Replies to post #7493 on Pilgrim Petroleum Corp. (PGPM)

[downsideup]

That looks about right. My first look based on probable asset values had PGPM easily worth $0.002 and handily as much as $0.02 a share. To get more than that, you'll need to rely on contributions from one, some of all of these two things...

You need the assets to be worth much more than reported back in 2006, which seems at least a reasonable if not likely potential. Leases on higher potential shale gas and oil properties in known locations have gone up from a couple hundred dollars an acre, to as much as $16,000 to $30,000 an acre... a factor of as much as 100 times the prior value in the last year or two.

You need most of the value from former PGPM assets to actually belong to PGPM shareholders instead being taken by PGPM management as a private holding using Lariat. If they do "the right thing" PGPM shareholders should end up owning most of IMVS, not the 30% PGPM holds now.

[downsideup]

If there are 1.5 billion shares out, and the $40 million debt from Lariat is made good, that is $0.026 per share. I do still expect that the PGPM shares will reflect at least that value at some point pretty soon.

My quibbles here really aren't about whether or not PGPM is undervalued now and could or should be worth more per share than now... rather than being about the degree to which PGPM shares will eventually be allowed to reflect ALL of the asset values that they should... without some of that value being diverted improperly.

Buy it for $0.001 and sell it for $0.30 and you should be happy, but, if you buy it for $0.001 and "should" be able to realize $0.60 instead of $0.30... you should still be unhappy. That risk of asset diversion, of course, is why the shares sell for less than asset values should support right now... and eliminating that perception or risk of asset diversion is a necessary step before the proper valuation will be attained?

[masc2279]

Well there is one more thing. Preferred stock value will retain more shares that standard shares. so that calculation may be further than 110 PGPM shares vs IMVS because the first to always be paid is preferred.

but we also have no idea how many PGPM shares they have or have not bought back at this level which will also adjust the final calculation significantly.