Ludlow Capital Issues Research Opinion on Natural Gas Company 1st NRG Corp (FNRC) Last Updated: September 7, 2010 - 10:30am EST
(NEW YORK)--Ludlow Capital issued a research alert on 1st NRG Corp. (OTC:FNRC), a natural gas exploration and development company, with a 'speculative' valuation target of $2.00 to $3.00 per share.
Valuation Target
With around $3.90 in proven reserves, $7.94 in potential reserves, monthly income from fees of $24,420, and only around 5 million shares issued and outstanding, it would be fairly conservative to justify a $2.00 to $3.00 valuation price target on FNRC. Even based on the numbers below, the Company would still only have a market cap of $10 to $15 million, which is still less then their total proven reserves of $19.5 million. This formula does not take into account value of potential reserves, income from fees, future acquisitions, or potential forward splits or up listing to AMEX for the company.
Share Structure
As of September 7, 2010, the Company had around 4.2 million shares issued and outstanding, with around 2.8 million of that in the public float. At a price of $0.30 the company has a market capitalization of $1.2 million.
Proven Reserves
On the two projects under development with FNRC, the total 'potential' reserves are 5.8 BcF.
Natural Gas at $4.00 Minus Acquisition and Development Costs: $0.63 --------------------- Margin to Company: $3.37
Based on natural gas at $4.00, minus acquisition and development costs, total proven' reserves on 5.8 BcF would equate to $19.5 million potential reserves.
($19.5 million / 5 million shares outstanding = $3.90 per share)