None of the below includes Belize. Now add 4-5000 barrels per day from Belize and you do the math...life changer, YES
Treaty is a $22 million market cap company in its infancy that holds a favorable risk reward opportunity and a growth profile that cannot be ignored. Treaty sold its first 550 barrels of oil last month at a $3 premium to WTI. They have forecasted selling another 850 barrels in July and 1,250 barrels in August. At this growth rate of 32%, which Treaty has endorsed, we believe that Treaty can get to 1,000 barrels a day within 12 months. Treaty drills its own wells, and is the working operator in all their locations keeping their F and D costs at an absolute minimum. They own all their own equipment as well as the leases on approximately 3,800 net acres in Louisiana, Kansas and Texas.
Current gross revenues are estimated at $9.25 million going to $22 million next year and estimated $33.6 million the following year. This translates to a net estimated income of $2,356,932 in the current year, $8,742,479 next year and $15,751,024 in the out year of 2013.
Earnings per share in the current year are estimated at $.00393 going to $.01475, going to $.031 in 2013. With 600 million shares outstanding and a 25 multiple on earnings, we believe fair value for this company is currently $.09 going to $.36 next year and $.65 in 2013. All figures are calculated at $80 a barrel of oil, and as stated in this article, we think prices will almost double in the next 12 months.
Treaty Energy shares currently trade at $.05 range. We feel the risk reward at current levels is very attractive with an upside of 10-20 times current stock price with a limited downside. Also, cash flow from their continuing operations should be sufficient to fund their drilling programs.
Treaty Energy currently maintains around $750,000 in net debt down from $1.8 million in the first quarter of this year. This reduction in debt is a trend that Treaty has committed to continue. All of these factors combined makes us believe that Treaty Energy is a great investment opportunity.
Besides their North American drilling program, Treaty Energy also owns a lease in partnership with Princess Petroleum that contains 1.8 million acres off-shore and 200,000 acres on shore in the country of Belize. This represents one of the largest concessions in that country. Treaty Energy has no revenue from Belize built into any of their models.
Treaty Energy has identified eight drilling locations through geosensing, geochemistry and radio metrics. There is a private energy company that has drilled 14 locations in Belize, averaging total production of about 7,500 barrels a day. Treaty Energy has 200,000 acres, with a similar geological formation that is in the same area which has found commercial pay.
Through the different technologies, the proximity to a commercial producing area, and two years of extensive work by the drilling team at Treaty Energy, we feel as though this could be a “game changer” for this emerging exploration and production company.
News 
Market Data 
Discover 
AI
