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Stock Tiger
Update -
Platina Energy Group Inc. -
PLTG
September 15, 2007
From the Desk
of
Mr. Blair
Merriam, President & CEO Platina Energy
Shareholder
Update
September 2007
Over the past two
years, Platina Energy has transformed from a public shell Company to
a fast growing, and most recently, a cash flowing oil and gas
concern with considerable proven and unproven reserves. The Company
has also continued to advance its German inspired extraction and
recovery technology rights for the oil field that could prove to be
revolutionary subsequent to its Research & Development phase.
What is
particularly exciting about Platina is that it has grown through
independently evaluated proven reserve holdings from essentially
nothing in 2005 to over $300,000,000.00 at currently available
pricing. Most importantly, because of conventional accounting
reporting requirements, this is not reflected in Platina’s
financial statements. This is the true definition of hidden and
quantified assets—much like many real estate properties that have
had significant appreciation in the market but are not necessarily
reflected anywhere outside of current appraisal values. Platina’s
unrealized assets include reserve estimates from our Tennessee,
Appalachian Energy subsidiary which is estimated to contain 27,500
BCF of natural gas; and as many as fifty (50) individual oil well
sites on our Young County lease with up to 28,000 barrels of
recoverable oil per well in estimated reserves.
Relative to
monetizing the Company reserves, we have successfully developed our
first wells in Young County in conjunction with a strategic joint
venture partner and are producing product daily in commercial
quantities. We have also drilled our first well on the Tennessee
lease in the Devonian Shale formation which is undergoing its
completion process as of the writing of this update. Production
from this formation owned by our Appalachian energy subsidiary is
expected to be on line with the local gas pipeline later this fall.
Platina’s Palo
Duro Basin prospect including 20,000 acres continues to be a subject
of considerable reserve possibility. According to a financial
industry report authored by the well known brokerage house, Morgan
Stanley, they compare the Palo Duro Basin prospect to that of the
better known Barnett Shale. It has been further suggested that the
Palo Duro Basin formation could be even more lucrative than the
Barnett Shale because of potential oil reserve pay zones in addition
to prolific gas reserves. At the present time, the Company has
engaged preliminary engineering studies to ascertain likely reserves
that would be possible or probable. Unfortunately, because there is
not sufficient historical data available to quantify proven reserve
estimates as there is for Young County and Tennessee, the ability to
accurately assess the Palo Duro prospect will largely remain unknown
until such data is available from surrounding new production
prospects.
However, initial
reports from private sources have suggested Palo Duro wells that
have had the entire well drilling costs returned in a matter of days
as opposed to months or years for many other types of prospects.
The Company does not want to over or under estimate its possible
reserves until it can more securely provide stakeholders with
appropriate field data that should be forthcoming.
In addition to
the three Exploration & Production (E&P) prospects the Company has,
Platina owns certain proprietary rights to exciting German inspired
extraction technology that continues to be field tested through its
research and development stage. This particular technology uses a
novel method delivered through a patented device that provides
economically viable extraction capability. It can also
concomitantly increase ongoing production because of its ability to
reduce paraffin build up. In certain oil and gas formations where
both oil and gas products exist, natural gas can be used to power
the extraction device. This causes both down hole pressure and heat
resulting in lowered viscosity for faster recovery and also the
ability to melt paraffin that is a normal build up obstacle for
optimal oil recovery.
The traditional
costs associated with occasional paraffin removal can also be
avoided using this technology. This reduces well down time and
costs associated with the removal of the paraffin build up—both
major potential costs for the oil field operational side of the
business.
Relative to
developmental challenges and field operations, Platina management
continues to bring a common sense and experienced approach to the
industry. Management has sought to acquire a combination of proven
reserves, strategic technology and exploratory opportunities for the
Company. This gives discerning investors an investment opportunity
to participate in the lucrative oil and gas industry resulting from
an attractive story coupled with business plan execution that makes
good economic sense. Management believes that patient investors
will be well rewarded with share price appreciation over time.
Upon a more
in-depth review of the Company strategy and history, you will find a
mindset for cost constraints demonstrated by its commitment to low
operational overhead. With less than five (5) full time employees,
mostly compensated by restricted share incentives, management is in
harmony with outside shareholder desires. Furthermore, because
management has a relatively large stock position in the Company, it
is the most motivated group to seek economic returns and
accumulation of proven assets that should ultimately have share
price recognition in the market. To date, the quantified asset
reserve estimates as reported by independent valuations for the
Company exceed three hundred million dollars ($300,000,000.00).
This does not include the Palo Duro Basin or the Permian Energy
extraction technology whose values have yet to be independently
quantified.
All of this
growth for shareholder benefit has occurred in the last two (2)
years making Platina’s fundamental achievements quite remarkable.
Shareholders should take note that proven management with such a
track record is likely to continue similar strategic growth.
Because it is not fully recognized by the market, opportunity for
savvy investors exist that could reflect in the potential of large
gains in the public share price. For reasons beyond management
control, the exact timing of market place recognition of Corporate
Asset values cannot be determined. Historically, other Companies
that have experienced rapid internal growth have been handsomely
rewarded with regard to shareholder price appreciation. To further
solidify the potential of share investment recognition, management
will continue to grow the Company both organically as well as
through additional acquisition opportunities.
To that end,
management is presently in negotiation for additional acquisitions
that could further add to shareholder asset value. These
acquisitions could include new technology opportunities/advancements
as well as additional E & P and other related business
possibilities. The bottom line for loyal shareholders is a possible
significant potential appreciation in share price assuming agreement
and recognition by the market of Company owned assets.
Another benefit
that Platina has engineered is a unique and novel combination of
sophisticated financial strategies. The Company has designed a
method whereby acquisitions, off balance sheet financing
availability and continued growth could be coupled with significant
future tax benefits. Although the entire strategy is very complex
and integrated into an auditing and legal format to ultimately
benefit shareholders through mitigation of future tax burdens,
investors need to pay heed to operational achievements as opposed to
paper tax loss creations through specific transactional valuations.
The benefit for tax reduction is obvious. The method is centered
around issuances of restricted shares as part of additional asset
accumulation that far out weighs dilution providing for significant
tax savings and discounted asset acquisitions. This strategy has
resulted in exponential asset accumulation returns in conjunction
with the recent drilling activities by third party joint ventures.
The bottom line is the ability to acquire assets for a potential
fraction of what they are worth in aggregate on a fundamental
basis. By simple analysis, a Platina is a Company with less than a
15 million Dollar market capitalization yet has acquired over
$300,000,000.00 in independently quantified asset reserves. This is
quite a remarkable achievement in just two (2) years time and for
little or no cash consideration.
In short, the
main strategic benefit to shareholders has been a rapid growth of
acquired assets for attractive consideration and an aggressive
development and production schedule that could reap the potential of
millions of dollars in operational revenues in the current quarter
and going forward. Part of this strategy includes alliances with
other financial syndicators of tax advantaged investment products
that can benefit from drilling opportunities with Platina as both
contractor and operator in addition to high yield commercial paper
financing returns. Data concerning such strategies in the works
will be further available as a result of forthcoming auditor
reports. Management is always conscious of having third party
valuations as opposed to internal opinions and interpretations that
could be subject to third party adjustments.
Investors in
Platina should understand that the Company has a long-term plan that
continues to be executed upon and refined according to new
opportunities. In summary, within its relatively short track-record
as an oil and gas Company, two (2) years, Platina has consummated
proven reserve acquisitions that many competing Companies have not
been able to do in more than a decade. On the production front, the
Company has been able to engineer and map site locations, acquire
permits, prepare drilling site infrastructure, negotiate pipeline
and recovery contracts and drill/rework almost 10 wells in just over
90 days! To management’s knowledge, no other microcap oil and gas
company has had such operational success in such a short period with
very little internal capital base available.
Management will
continue to pledge its full efforts lead by Mr.s Merriam and
Langston and supported by office and field staff to acquire and
develop more property for Platina. Mr. Merriam brings over 30 years
business experience to Platina both on an operational as well as
“field understanding” basis. Mr. Langston brings almost 35 years
experience as an oil and gas entrepreneur and CPA having raised and
completed energy transactions collectively worth hundreds of
millions of dollars. The executive management team is both
supported and complimented by an experienced board and support staff
who understand administration and accountability to shareholders and
for operations such that Platina will continue to evolve as a future
industry leader.
Relative to
shareholder value, intrinsic assets subject to standard industry
considerations also position Platina as a possible acquisition
candidate for a much larger concern. However, in addition to the
possibility of a future takeover, the Company will contribute to
potential shareholder value by continued execution of its business
model in combination with the potential to list on the AMEX or AIM
exchanges. Significant interest and loyalty from German and other
European investors also continue to support unique engineering
technology acquisitions inspired through the Company’s German
roots.
Management
believes that informed investors are the most valued commodity of
the Company and all efforts to support their loyalty and continued
support will continue to be made and expanded upon including
activities related to personal visibility within the respective
market places.
As an additional
consideration for shareholders, particularly those who are unable to
personally visit our Corporately owned fields, management will be
providing regular report updates including possible website
advancements such that investors may personally see field operation
tasks to better understand the opportunity that exist within this
fast growing Company.
Stock Tiger note:I am not a broker so cannot give financial advice.
This notice is for informational purposes so start your own D&D. Please refer to our
Disclaimer on the Website.
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