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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