Replies to post #3461 on Daybreak Oil and Gas Inc (DBRM)

[True Blue]

That could be the metric you use as a rule of thumb but Ive traded a few O&G's that have deviated from this means. Wish I could remember this one in specific - it went from around where we are priced to 12 bucks just based on a rumor and in the end it was drastically over priced and collapsed. That rumor was just that "black ooze" was reported while drilling.

If a stock can go to 12 beans based on "black ooze" I think we have a shot at 5 bucks here.

[alsobirdman]

Geo, using your numbers, let's take a look at some possible production numbers. That first KY well produced about 275 bopd at its flush rate. Let's say the production rate becomes 200 per day. That gives us 50. Now multiply that times the 50 wells planned for that lease and you get 2,500 per day. Throw on another 500 per day from Kern County, which is possible, and we're getting to some pretty good numbers. Not your 5,000, but let's say we get to 2500. According to your numbers that would get us a mkt cap of say $130M or so. Not $5 but I'll take $2 all day long. And remember, I'm using low-side numbers.

Now we have to remember that these KY wells gradually taper off to about 40-50 per day in 18 months time. So worst-case scenario is that in a couple years we are only at roughly 700 per day net to us. At that point all of the drilling costs have been paid off, and the earnings numbers start looking very good.

Throw in a couple more projects along the way and thinigs get even better.

Five bucks? Meh, I'm not counting on that. But I am counting on over $2.