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Wednesday November 7, 2007
OTC: PLTG PRICE 0.25 Get Quote Web Site News Chart
10/31/07 Formation of Oil and Gas Syndication Subsidiary
10/30/07 Platina Energy Group, Inc.: Proven Reserve Valuation Soars
10/25/07 Extraction Enhancement for Quitman, Texas Acquisition
10/22/07 Platina Energy Announces 63-Mile Pipeline Acquisition
10/16/07 150bbls/day Oil Lease Acquisition; Quitman, Texas
10/11/07 Second Gas Well Reaches Total Depth in TN; Excellent Indications
10/09/07 Platina Energy Management Announces Acquisition Buying Spree
10/04/07 Total Depth Reached in Tennessee - Good Show of Natural Gas Prior to Completion
10/01/07 Three New Wells Reached Total Depth in Young County; Production in Line
After the markets closed on Tuesday November 6th,
Bowie Energy Acquisition--$16,000,000.00 Transaction
Platina Energy Group, Inc. (OTCBB: PLTG) continues to issue a string of positive news, and Stock Markets Alerts is urging investors to continue watching this company closely. Tuesday after the markets closed, the company, a fast growing E & P Company, issued a press release announcing that it pays $250,000.00 deposit for 47.5% of Bowie Energy.
More great news for PLTG investors! The press release states that Platina Energy Group and Bowie Energy intend to complete a $16,000,000.00 producing production transaction on two major leases in Texas. Although the transaction is rather complex, the Platina/Bowie have secured terms for $14,000,000 of the $16,000,000. Joint Venture Term sheets for the balance of the financing, $2,000,000.00, are in negotiations. According to the press release, this aggregated transaction when completed could be worth tens of millions of dollars in revenues to Platina s interest.
Blair Merriam, President of Platina reports, this transaction has many moving parts but has evolved from initial discussions, to one that we are quite certain that we will be able to close on. All of the parties concerned have made their best efforts to work together harmoniously and in a professional manner in order to conclude this new piece of business for Platina. In addition to immediate production, developmental opportunities on this acquisition are also vast and will make great future prospects for the Company and its strategic partners.
Last week the company also reported it formed Applegate Petroleum Management, Inc., as general partner for oil and gas participation limited partnerships.
According to Blair Merriam, Platina receives regular inquiries by potential investors and stakeholders seeking oil well participations. The ability to allocate tax incentives to individuals for 2007 along with royalty income probability to investors is the latest expansion for Platina.
With all of the new well acquisition targets being assessed in addition to those owned or under contract with Platina, the Company believes that individual investors should have the opportunity to benefit just as our institutional partners have.
According to Blair Merriam, Our Corporate progress for 2007 has been methodical and steady. We have grown the Company both through acquisition as well as internally and will continue to do so. The next opportunity is to give qualified investors both tax benefits for 2007 under a 2:1 leveraged structure, with income potential for many years to come. Our current product inventory available for partnerships could be as much as $50,000,000.00.
The company should have investors watching!
Aggressive acquisition strategy enhances long-term growth prospects
Platina is aggressively acquiring drilling properties and related energy assets. Appalachian Energy Corporation was created from a natural field acquisition in the Appalachian Basin of Tennessee. It consists of approximately 50 well sites in the Devonian Shale formation. In the Palo Duro Basin Prospect, the Company has leases and options to lease over 20,000 acres under various arrangements. According to a Morgan Stanley report and data from a major trade journal, the Palo Duro Basin may be as prolific as one of America s largest natural fields, the Barnett Shale. In 2006, Platina acquired a lease prospect in Young County, Texas which includes currently an independent third party petroleum engineering reports that give a 40 million dollar net present value based on industry standard of a 10 year discounted analysis.
Technology acquisition complements production business
Through its Permian Energy International subsidiary, the Company owns the rights to a technology for recovery and paraffin build-up reduction. The Thermal Pulse Unit ((TPU) is a cost-effective and environmentally friendly solution for enhanced recovery. It provides a significantly lowered cost basis per barrel for recovery without the problems associated with existing technologies such as CO2 flooding and steaming. Platina plans to deploy TPU technology in its own fields to enhance production and reduce the production decline curve and is also exploring potential joint ventures to commercialize this technology.
Increasing energy demand creates opportunities for developing leased properties and unexplored areas
Industrial and technological developments have increased the demand for energy resources, including and . According to the Energy Information Administration, average US consumption is projected to reach nearly 26.1 barrels per day by 2025. However, most existing fields are mature and production from these fields is declining. Hence, there is an urgent need for exploration and development of new properties and workover of existing wells. Platina is leveraging its resources by bringing various small energy companies together under one umbrella, with each business run by a local management team compensated on a performance basis.
Platina Energy Group, Inc. is a diversified exploration and development company. Since its organization in 2005, it has successfully acquired properties in Northeast Tennessee, West Texas, Central Texas and is now expanding into Oklahoma and East Texas. With off balance sheet financing from financial partners, the Company is able to diversify its exposure while building assets and cash flow without on balance sheet debt leverage or shareholder dilution.
A favorable outlook for revenue and cash flow growth is supported by the Company s strong PV10 reserves and aggressive plans for increasing and production from its acquired properties. Appalachian Energy Corp. which includes currently an independent third party petroleum engineering reports that give a 40 million dollar net present value based on industry standard of a 10 year discounted analysis and is in the process of securing drilling permits for the first three sites, and believes it can drill and complete 50 wells over the next 16 months assuming no major weather delays. Individual well production estimates based on current pricing project revenues of $35,000 to $42,000 per month.
The Company s Young County prospect is currently producing high quality light sweet Texas crude oil. Platina expects to commence Phase I drilling consisting of 20 wells in this quarter and anticipates initial net production ranging from 2,500 to 6,000 barrels per month. Reserves associated with this prospect are estimated at 600,000+ barrels and valued at approximately $40 .
Although the Company has not released reserve estimates for its holdings in the Palo Duro Basin, some experts believes the Palo Duro Basin could be as prolific or more prolific than the Barnett Shale, a natural play estimated to contain 30 trillion cubic feet of reserves. Another wildcard for Platina is its Thermal Pulse Unit technology. While the Company plans to initially deploy TPU in its own fields to enhance production, it may eventually commercialize this technology which addresses a potential market worth tens of millions of dollars. Finally, the Company is negotiating for the acquisition of producing assets through a joint venture with Buccaneer Energy. This acquisition over time could be worth well over $500,000 in monthly cash flow.
Assuming 30 wells, each producing 4,000 cubic feet of natural per month from the Appalachian Basin property and 35 wells, each producing 500 barrels of per month, from the Young County, Texas prospect, Platina could have annual production exceeding 1.4 mcf of and 200,000 barrels of in a relatively short timeframe. At $70 per barrel and $8 per mcf natural , this suggests FY 2008 gross revenues could easily exceed $25 . We anticipate at least a 50% jump in FY 2009 production and revenues as the Company benefits from enhanced production and new wells drilled on the Appalachian Basin and Young County properties. Our model assumes no production contribution from the Palo Duro Basin, which could prove to be the Company s largest energy asset, and no revenues from sales of TPU technology.
With PV10 reserves valued in excess of $100 , we think Platina shares are significantly at current levels. At a $0.45 share price, Platina is valued by the market at less than $10 which is only about one-tenth of the value of the Company s PV10 reserves. As a result, we are initiating coverage of these shares with a Speculative Buy rating and a $1.50 target; Beacon Equity Research thinks a market capitalization closer to 40% of the value of PV10 reserves is warranted by the Company s attractive energy assets and development opportunities.
* This entire section was taken from the Beacon Equity Research Report.
