Platina Energy Group, Inc. focuses on the acquisition of oil and gas leases or properties. The company holds interests primarily in an oil and gas lease that is located in the Palo Duro Basin; and various natural gas leases in the Devonian Black Shale formation located in the Appalachian Basin of east Tennessee.
Please read all of the company information, the press releases and the SEC filings to learn all yourself of course but here I will mention briefly the 3 areas I find interesting.
First before that - one thing the company has done right away is to have the idea to be diversified so to reduce shareholder risk and to use joint ventures and other cooperative techniques to be able to advance while using much less of the company's money and or stock while they grow. In the following I may use the term "they have" or "on their" in talking about property locations. It may mean lease holdings or ownership directly but this is not important in this brief overview as I use the terms only to identify which property we are talking about.
First - they have property in Young County Texas. This prospect is oil and in some cases this had oil wells on it but the price of oil was too low to make it a profitable in the pat so it sat a long time and Platina was able to buy the option on the lease at a very good price. With oil prices now as they are, even fairly low volume wells can produce very good revenues.
Platina itself is pumping a couple of very low volume wells as they use this income to pay much of their overhead as this type of well is too small for a joint venture. I liked the fact that the company utilizes all resources in this way. It has a very good management team and has very low overhead.
Before we go further let's give and example of how some private may get into the oil business. You have money in stocks and your home and so forth but would like to be an oil baron so you manage to find a leasehold on a bit of land and you pay a geologist and other experts to tell you where to drill and you contract the drilling company and set up the electricity and make the roads to the well and so forth. You drill and find you are producing 2,000 barrels a month and you are in heaven. Unfortunately however if that were a good risk/reward situation we all would be doing it. In reality you would likely not find oil on the first try or find low production and end up spending so much money you loose instead or making a profit. You can of course drill some more wells but each time it is all you money at risk.
Platina has another way of doing this and that is through joint partnerships. Platina already has the leaseholds on property with proven reserves of oil and they have the roads, the resources to do the drilling, pluming, collecting and even selling of the oil and will take on the risk if you are willing to share in the profits.
In the Young County property they have areas they call phases and each one may use a slightly different format but this is basically the set up: The joint venture partner pays Platina a flat fee to drill the well and pump the oil. They guarantee a minimum production based on a ten day run rate after the well is set up and working. If the well they drilled does not produce at least the minimum then Platina drills another one yet the partner pays no additional money. When the well is found and pumping the typical payback period for the joint venture partner is about 4 years at the minimum rate but maybe less than one year on a higher producing wells. The split of the proceeds are about 75% to the joint partner and 25% to Platina. The joint partner does pay some expenses like electrical and maintenance but this gives you the basic concept.
In May Platina signed their first JV agreement for this property with Zone Petroleum LLC and they plan to drill 35 wells. The initial income to Patina for their flat fee is about $75,000 per well net for a total of $3 million for the first 35 wells when completed. The production of each well varies and at the beginning it produces more than years later but even using a reduced longer term average of 200 barrels a month per well the output will be 7,000 barrels a month at present price of about $65/barrel or total gross revenue of this phase one at $455,000 per month with Patina receiving about 25% of this or $113,000 per month and Platina did not have put up its own money or stock plus it received a nice up front payment.
On this property they figure phase one will have have 40 wells and phase two 40 and phase 3 and four a total of about 200 as they will be a bit smaller wells. This is like a win/win situation as if Platin has to drill more than one well to find one to meet the guarantee they have the upfront payment still and also their costs are less that a single individual as they already have the operations ongoing and for the JV partner their is no additional costs. So long term Platina receives is a very significant revenue stream while not having to use its own money.
Second -Platina has property in the Appalachian Basin of Tennessee in the Devonian Black Shale formation and it has natural gas reserves and this is held under the name of Appalachian Energy, a wholly owned subsidiary of Platina. According to filing this property has at least 1,000 acres and a minimum of 60 proven drilling locations though they think it may have room for 100. The CEO of Platina, Mr. Blair Merriam, said that an engineering report produced by C. G. Collins (independent Petroleum Engineer) stated that the production in the P Hawkins Gas Project area comes from Devonian Black Shale. The report further stated that most of the larger gas companies in America grew to their existing levels by producing gas from this formation including companies such as Columbia, Equitable, United States Steel, KY ~ West Virginia, and Wiser.
This part of the business may be really quite huge as they are now undergoing reserve reports on the property to determine the amount of reserves in natural gas it may hold.
I did a bit of looking on the Internet and came up with some "guesses" as there seems to be an average rate per well in the area. About $35k to $40k per month is my figure. Platina has property there that could hold as many as 100 wells but if I use only 50 wells times $35k we get $1.75 million /month gross. There are of course royalties and leasehold payments and these could take perhaps 40% so 60% of 1.75M would still give Platina a bit over $1m a month or $12M a year so on 37M shares outstanding about $0.32 per share - and this is only from this Tennessee property. Obviously we have to wait to see what the reserve report says but this at least gives us an idea that the stock price has a long way to go as reserves are confirmed, wells are drilled and production begins.
Third - for many this is the most exciting part of Platina as it has property leases in the Palo Duro Basin. This is a natural gas area and it may have huge reserves but the gas is trapped in between shale and in the past there was no good technology for extracting it. You cannot for example just drop some dynamite down a well hole and blow it up to unlock the natural gas as the whole field could explode. Yikes. There are however new techniques allowing one to reclaim the gas and Platina will be doing it. You can Google "Palo Duro" and you will find amazing excitement about this area.
The Paulo Duro Basin is being compared to Barnett Shale according to a Morgan Stanly report and Barnett Shale was the largest natural gas play in Texas. This may be one reason of the great interest in the company but I think numbers one and two above will be the shorter term thrust for the company.
There are currently about 37 million outstanding share 15 Million in the float.
Posts: 185 | Registered: May 2006
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posted
Wall Street Capital Funding LLC: Issues Pre-Market Stock Alerts for Friday! August 3, 2007 8/3/2007
Aug 03, 2007 (M2 PRESSWIRE via COMTEX News Network) -- Weston, FLA.- Wall Street News Alert's "stocks to watch" this morning are: Edgeline Holdings, Inc. (OTCBB: ELHI), Migo Software, Inc. (OTCBB: MIGO), Platina Energy Group, Inc. (OTCBB: PLTG) and Sun Cal Energy Inc. (OTC BB: SCEY).
Platina Energy Group, Inc. (OTCBB: PLTG) up 8.7% on 919,000 shares traded. Platina is an oil and gas exploration and production Company focused on acquiring and developing oil and gas properties with substantial proven reserves. The Company owns several oil and gas leases in Continental North America that are either currently in production or are being developed for production. On August 2nd 2007, the company proudly reported that it has begun drilling its first new Young County well having secured sufficient funding to develop the Company's Young County property to its maximum potential. Under the terms of the jv funding commitment, the Company may proceed with its aggressive drilling program. The Young County prospect is one of two primary proven reserve fields owned by Platina. Independent third-party reports show that this property has proven reserves of over 1.4 million barrels across 50 potential wells.
Platina Energy in Application Process For Drilling Permits For its Devonian Shale Prospect Friday August 3, 8:28 am ET
Estimated Recoverable Reserves for the Fifty-Five (55) Proposed Well Sites Are over 27.5 BCF Spanning a 10-Year Period, Yielding over $200,000,000 (!!!!!!!!!!!!!!!)
posted
Damn shorties. But PLTG is strong enough to get them running. They must cover, soon the share value will rise due to the continued earnings. Every month some new wells will be completed.
When we get the value for Palo Duro Basin, this will fly.
Posts: 185 | Registered: May 2006
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posted
"Based upon what appears to be an inordinate amount of short selling, the Company is now providing additional information relating to the financing, to dispel concerns that the financing might have elements of a convertible debenture.
Blair Merriam, CEO of Platina, stated that "the $17 million financing provided was through an equity line of credit as part of a Joint Venture between the investor group and Platina, and not any form of a convertible debenture or common stock dilution." ......
"The investors further concluded, that based on more recent well production data on adjacent properties, income to the joint venture once all wells are drilled and completed could be significantly higher than $2 million per month estimates."
posted
I think tomorrow will be a good day again. After last 2 news no one will go short. So tomorrow all should cover their short positions.
Posts: 185 | Registered: May 2006
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posted
If I'm right with the short attacks, this should close much higher today...
I'm really sad. SUCH a good company and no reward at the stock....
Actual prospects and the estimated value:
Young County: >= 100,000,000 Appalachian: >= 200,000,000
Actual market cap.: ~13,000,000
And the coming value for Palo Duro Basin should be the bomb. If this is worth what it should be (or more), the two actual prospects are just dwarfs compared with the Palo Duro field...
Posts: 185 | Registered: May 2006
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posted
As I know, only the two actual prospects (Young County and Appalachian) would legitimate a share value of at least $3 with future earnings (When all new wells are drilled and hooked up).
Appalachian will be ready this year (2007). As I know, Young County will need a few months more.
I don't know how long it will take to estimate the value of the Palo Duro prospect, but IMO relative soon (within 2 months).
So I cannot understand the chart of the last weeks. Really sad. Shorties damage the private investors, the company,... sad!
Posts: 185 | Registered: May 2006
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posted
4-7 I'm sorry that you're out. Especially with such a cheap value... IMO you should get in again.
Posts: 185 | Registered: May 2006
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posted
I've managed to average down to .33 by dropping at .25 and reentering today at .20 when i saw all the shorties covering. Blocks of 10000 50000 100000 and even 250000 have gone in the first 30 minutes. Once they are done covering this could start to slowly trickle up.
-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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posted
Based on your posts, you seem smart, fourseven. I'm glad you're in. That reasures my buy in at .20
-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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posted
Roba, Do you know roughly how much of the 3.5 mil short shares have been covered?
-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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posted
I'm out till the other 2 mil shares are covered
-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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posted
You're out when the shares must be covered and prefer to get in if they are already covered? oh. I thought it's better to get in BEFORE the shorties must cover. Because the share price will raise by covering. Am I wrong?
Posts: 185 | Registered: May 2006
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posted
Look at the other day. Almost 700,000 shares got covered and the price stayed within .20 and .21. This stock is currently a falling knife. I've lost enough money on this for now. I need to go make my money back and then buy in with my full cash flow. I doubt this stock will fall past .05 per share since that was where they were when the company's rev was only 18k a year. Sitting in this i'm missing opportunities to make bigger money now. DMPD was up 370 % today and I couldn't get in on the action cuz I was here. These happen every day. I'll be back in at between .05 and .10 with more money.
-------------------- The hardest people to love are usually the ones who need it the most. Posts: 30 | From: Denver, Colorado | Registered: Jul 2007
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