Regarding stock price, I agree with most of what MHT stated. With the low trading volumes we’ve seen today I figured most of the insiders were done selling what they needed to sell and we could move on to news releases, guess we may have to wait a little longer.
IMO, I believe the news our generator is activated will probably bring the stock price to .15 cents/share. News we are running at full production (1,000 barrels a day) and we’re seeing recover rates on the solvent within design parameters will take it to .25 cents/share (add .10 cents/share if we are in-line to make $900,000/year from this generator).
If we are able to secure upgrade contracts for 25,000 bbd then, IMO, all bets are off. It would represent a huge endorsement of the technology and a step-change for heavy oil producers, no company wants to leave cash on the table. If we have contracts to process 25,000bbd, what is a reasonable stock price? At what point has the technology been sufficiently proven? At what point do you value the company against actual earning’s vs. market potential? If our potential exceeds our market value we become a prime take-over candidate.
1,000bbd -> $900,000 profit for Sonoro
25,000bbd -> $22,500,000 profit for Sonoro
Potential Market? -> ???????
Here is an example:
According to Wiki, 70% of the world’s oil reserves come from non-conventional sources. Heavy & Extra Heavy oil make up 35% of the world’s oil reserves. So the real question is, how large is our potential market? If I make an uneducated guess and say 5% of the world oil production comes from small producers who could have a need for our technology (assume 82,000,000 (daily world production) * .05% ) = 4,100,000bbd. And if we estimate we’re only able to get 5% of this market (4,100,000 * .05) = 205,000bbd.
205,000bbd -> $184,500,000 profit for Sonoro
The future looks great if management can deliver…..
What we have going against us in a high burn rate, 2009 salaries were $803,961 with the former CEO making 25% of that. For 2010 it looks like salaries will be even higher with our former CEO making over $348k!
The cash we have from the private placement will only last so long. I have never purchased a heavy oil asset, however, I have talked to others in the industry and $3-4 million dollars does not buy much of a resource, unless you are willing to venture into riskier areas. I reserve judgement on Richard’s direction to invest in heavy oil assets. Fortunately, he has done this before. I just hope we are not taking on more than our $10 million market cap company with $4 million cash on hand can accomplish…. SonoOil, SonoAsh and the Environmental Division will all be there next year. What we need today is an operational generator and a sales force knocking on doors sending potential clients on free trips to Albania to showcase our technology.
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