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USCI: United Sts Crude Intl Inc
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[QUOTE]Originally posted by realityinc21: [QB] No prob, I've owned USCI for a few months and have done well thanks to this BB so I am much obliged to do the due. I know that most of us aren’t in this stock for our retirement fund but at least this could ease fears for the new investor/swing trader. So, do you worry that USCI no longer exists? That you’ll lose your investment? I don’t and here is why. First, their last PR’s, 5 to be exact, were from November of 2003 which was only 5 short months ago and their headlines were this: “Video footage of TM-96 Generator in the Oil Field” “US Crude retains marketing firm to market portable steam generator” “US Crude’s president featured on MacReport.net” This sounds like a company who has been busy for the past 5 months with marketing and pushing their generator technology. Second, from an article from 1998 (yeah I know it’s old but follow me anyway). [URL=http://www.findarticles.com/cf_dls/m0EIN/1998_Dec_16/53415019/p1/article.jhtml]http://www.findarticles.com/cf_dls/m0EIN/1998_Dec_16/53415019/p1/article.jhtml[/URL] The key here is the headline: “U.S. Crude Ltd.'s Recoverable Assets Certified by Independent Geologist at $355 Million; Company Positions Itself for the Future Through Property Acquisition and Product Sales.” All right, here is where it gets interesting. And follow my math very carefully. In 1998 a barrel of crude oil was at it’s lowest in 25 years and has since been at it’s highest in 20 years. In 1998 a barrel of crude sold around $15/ppb (http://www.wtrg.com/oil_graphs/oilprice1947.gif) today a barrel of crude sells for $32/ppb (http://www.bloomberg.com/energy/). From the article the geologist stated that the company has an estimated remaining oil in place of 67+ million barrels of oil. Using a recovery factor of 50% (much less than the 80% that USCI has been proven to extract from their wells) they gave them an estimated worth of $355 million. Now, even if over the past 6 years USCI has extracted half of the oil in place (which I don’t believe they have even come close to) the price per barrel has doubled since 1998 (from $15 ppb to $30 ppb) which would bring their net worth back up to $355 million. NOW, if they have only marginally extracted oil from their over 300 wells (321 at time of article but has since purchased more) then their net worth would actually be more like $600 million. AND, if they can extract upwards to 80% of the oil in place then their net assets would be worth almost $1 billion dollars (THAT’S HARD TO BELIEVE BUT TRUE) Likewise, as I said in the parenthesis, since Dec of 1998 USCI has added more wells and more leases to their inventory. SEE ARTICLES BELOW: [URL=http://www.findarticles.com/cf_dls/m0EIN/2001_March_6/71260947/p1/article.jhtml]http://www.findarticles.com/cf_dls/m0EIN/2001_March_6/71260947/p1/article.jhtml[/URL] [URL=http://www.findarticles.com/cf_dls/m0EIN/2001_March_21/71955905/p1/article.jhtml]http://www.findarticles.com/cf_dls/m0EIN/2001_March_21/71955905/p1/article.jhtml[/URL] [URL=http://www.findarticles.com/cf_dls/m4PRN/1998_July_12/20893519/p1/article.jhtml]http://www.findarticles.com/cf_dls/m4PRN/1998_July_12/20893519/p1/article.jhtml[/URL] [URL=http://www.findarticles.com/cf_dls/m0EIN/2001_July_24/76729115/p1/article.jhtml]http://www.findarticles.com/cf_dls/m0EIN/2001_July_24/76729115/p1/article.jhtml[/URL] [URL=http://www.findarticles.com/cf_dls/m0EIN/2000_Oct_24/66310725/p1/article.jhtml]http://www.findarticles.com/cf_dls/m0EIN/2000_Oct_24/66310725/p1/article.jhtml[/URL] If you read the company statement at the bottom of each PR you can see: “U.S. Crude is an oil technology and production company with more than 300 fully equipped oil and natural gas wells on 8,780 acres of land in several states. The company's long-term goal is to acquire 10,000 oil and gas wells over the next eight years” That even the property value alone 8780 acres X a marginal $5000 per acre = $43,900,000 in assets on top of the proposed minimum $355 million in oil reserves. So, for the swing trader that is worried about this stock rebounding, don’t, I think that regardless of the lack of PR we are going to be very happy with this stock over the next few months and that we always have to keep in mind that the shortage of oil we are continually facing only increases the value of USCI and it’s stock. So, why, if they could be worth somewhere in the $600-$800 million dollar range are they still a pinksheet stock trading at 0007? GOOD QUESTION! And here is why. 3 reasons; First, the company diluted their stock back in August to about 1.5 billion outstanding shares. This lost a lot of investors and hurt their reputation. Second, USCI has had a long standing agreement from the US Department of Agriculture to obtain up to $4.86 million dollars in loan financing that, until this day, has not been determined if the loan ever went through. I have seen the $4.86 loan program referred to in multiple articles over 2 years from USCI (http://www.findarticles.com/cf_dls/m0EIN/2000_Sept_25/65456918/p1/article.jhtml). My guess is that they haven’t taken the loan yet, but still have the agreement, because of reason number 3. Third, through all my dd on this stock I have come across a number of partnerships and clients that have purchased equipment from USCI or have partner relationships on leased oil lands, from Delaware, West Virginia, Florida, California, and more. Some of these companies I have been able to identify as still existing and still using USCI Steam generators (see some of my previous dd), others I have not. My opinion is that during the past 3 years, those partners have since presumably gone out of business, causing USCI to resort to registering more stock to cover costs (reason #1) to still move forward with their initiatives and to forgo borrowing the $4.86 million dollars (reason #2) because, at the time, they saw a trend of their business partners going bankrupt. One reason for all those companies went out of business is that, from the first article explanation above, at the time (late 1990’s) the price per barrel was at it’s lowest in 25 years, when that happens companies who survive by extracting oil from marginally producing wells can’t afford to exists (that is why the wells were left abandoned in the first place for these companies to acquire them so cheaply). Since then we are seeing the highest price per barrel in 20 years so do you think that those companies may crop up again? Do you think that those relationships with USCI will re-form? I am betting on it. When you can get $33 per barrel, a well which may still have 10 million barrels in place but can’t be produced through cheap methods becomes attractive again. Keep your eyes and ears out. Just my humble opinion. Thanks for reading, FS ~ Trust your dd [/QB][/QUOTE]
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