re: some interest, warming up! reposted Here's a post from...

re: some interest, warming up! reposted Here's a post from yesterday for those interested. Interest is certainly growing but volume remains small.

acrushor and theflasher

This is a very tightly held stock and as you say its not on traders radar as yet. A lot of stock is held by the venture capitalists that got the company going and by directors and those close to the company from the float in December. The annual report from last week shows that the top 20 shareholders own nearly 80% (and some would be in eschrow) and that as of 28 February 2005 there were a total of only 506 shareholders. Most of these shareholders have their fill I suspect so I'm not sure what it will take to move the sp upwards significantly. PVE has recently announced a significant upgrade to reserves and added more prospects to its portfolio, and now it is drilling. With a larger and better known company these announcements would have been enough to cause some excitement. Perhaps as the drilling approaches the target depth (in around 2 weeks) we will see some more serious sp action.

Like all explorers its hard to value and will probably be rerated only once production is approved or when it actually starts later in the year - so its one to accumulate at this stage IMHO. In terms of assets in the ground it has 80 bcf of gas proven and probable and 129bcf including possible. Taking only the 80bcf 2P reserves at a price of $8 per 1,000cf (as quoted in the report) that equals a reserve value of $640m - as with oil, gas reserves in the ground need to be discounted dramatically (most use $10/barrel for undeveloped oil reserves - around 15% of average POO) - so applying this type of discount gives a valuation on known reserves alone of $96m. So at present with a sp of $1.04 and with 75m shares fully diluted it is trading at around a 20% discount.

One to watch IMVVHO.

H