With 10 oil wells at West Tulsa by the end of the year, based on testing of existing wells that should generate at least $20 million/year.
Given the last couple of drilling results (including today's), it could well be that the average production expected from each well increases following testing, but let's assume $2 million/well...
Most of that $20 million is profit, since the cost/barrel is only about $2.50, and the price of oil fluctuates by more than that in a day's trade!
So given $20 million earnings expected next year just from the first 10 wells at West Tulsa, what are those wells worth to the share price? ie, what is a reasonable P/E ratio for a company with this kind of revenue from wells in production, and forward growth expectations?
I've got some numbers in my head but I'm curious what other people think...
RFE Price at posting:
$1.15 Sentiment: Hold Disclosure: Held
