Posted by: TheTiger7777 Date: Tuesday, July 08, 2008 2:57:24 PM
In reply to: RamRock who wrote msg# 5032 Post # of 5268
Why to BUY HTOG!!!
A report by The Tiger
I have been following this stock for some time and have read thousands of posts over the past 3 weeks about your thoughts. In an effort to consolidate the voice of the majority, I provide the following summary and opinion. I will also present both sides to be fair and show you why you should buy HTOG.
Like many penny stocks, this one has been driven by the MM’s, Day Traders and the emotion of the rest of us. This is one of those stocks that I believe it is worth your time to read my thoughts. I am hoping to remove the emotion and look at some fundamentals.
There seems to be some confusion about this stock and like most stocks, two very different sides. The cons side contests that this stock, like most in pennyland, is all fluff and for reasons below. The pros side believes there could be some real value for reasons below.
I am not suggesting to buy, sell or hold, simply offering my opinion about this contested stock. I will state however, that I own a good amount of stock in this company and believe that what we have seen so far is only the beginning . I am going to assume that most who read this are current with the company’s situation and, if not, that you will do your own due diligence.
CONS: I will break down the common voice we all see here about the reasons NOT TO BUY HTOG. You can see they have many reasons to back up their claim.
• Debt – Since its inception in 1998 HTOG has accumulated $61,140,095 in debt as of 3-31-08. This along with the following statement in their most recent report, “If we are not able to obtain the additional financing on a timely basis, we may be unable to conduct our operations as planned, and we may not be able to meet our other obligations as they become due. In such event, we would be forced to scale down or perhaps even cease our operations.” has caused great concern among potential investors.
• Reliance upon additional financing – HTOG has not hidden the fact that they $39 million dollars to fund an aggressive 300 well expansion, and as stated previously, also need this funding to help with current cash flow.
• Dilution – in their 3-31-08 report HTOG states there are only 42 million common shares. Many believe that massive dilution has occurred (as high as 1 billion total common shares), devaluing the stock for good some say.
• Timely PR Fluff – Since the drop in stock price on May 30th, when HTOG stock dropped from .04 to ultimately .0017, there have been 5 timely press releases. Topics ranging from increased revenues, to possible completion of a 4 mile pipeline, to an increase in rating to a “speculative buy” from Beacon Equity. Many believe these press releases were in conjunction with massive dilution to create “false stock value”.
• Penny Stock – All investors do is loose money in penny land and this one is no exception. Had a few great runs and will now leave many holding the bag. Interest is over with this stock and can only go down from here.
PROS: Here is why people are saying to BUY HTOG.
• Revenues – HTOG is finally producing cash after 8 years of being in the “exploration stage”. As stated by them, “We first sold natural gas in February 2006; therefore we are no longer an exploration stage company”. Total revenue for the first 3 months ending March 31, 2007 was $116,344. Total revenue for the first 3 months ending March 31, 2008 $547,274. As reported on 6-30-08, revenues for May exceeded $330,000 alone! Net loss for the first 3 months in 2007 were $6,580,316. The net loss for the first 3 months in 2008 was only $847,252. We are producing revenue and quickly closing the gap.
• Solid Strategy – An aggressive expansion to drill 300 new wells in the next 12 – 24 months, expected to generate $300 million in New revenue. All this for a cost of only $39 million, which still needs to be raised.
• Strong Properties – HTOG owns and operates nearly 645,000 acres in two areas in eastern Kansas. HTOG has been exploring, researching and is now primed and ready to rock and roll.
• Successful 4 mile Pipeline – This new pipeline has connected 12 wells, and are expected to double their production in the near future (further immediate increasing of revenue). In addition, vast additional acreage will be open for further development and drilling along the 4 miles to be accessed by the pipeline.
• Perfect sector – With the price of energy increasing exponentially, and the double wammy of the credit crises, this is exactly the right stock to be invested in now.
HERE IS MY OPINION ON ALL OF THIS:
There is a reason this stock is trading as low as it is. Heck a year ago HTOG was trading at $2.00! It has taken 8 years to finally start producing, and along the way they have taken in a large debt load. This is why the price is at a GREAT TIME TO BUY.
Take the emotion out of your thoughts. We have had some high’s and after the last few days, some lows. This is going to happen and should be expected when the MM’s and Day traders and running the show right now. There are more of “us” than “them” and we will bring this stock to its rightful place (at least .25), if we can operate without fear. By the way… I did not sell today, but added more when it hit its low.
There are a few things that need to be forgotten about… company debt, reliance on financing and dilution. With most stocks these would be a huge concern, but not with this one. I have owned and operated 3 multi-million dollar businesses, written multiple million dollar business plans and raised millions of dollars of investment capital. For guys like you and me $39 million is a lot of money, but trust me when I say “This is NOTHING in the world of venture capital!” If this is why everybody is freaking out, it’s time to refocus and take a deep breath.
I believe HTOG knows what they are doing, have developed (and now proven) ability to find and produce natural gas, owns and operates rich land, their geologist’s have confirmed and plotted 300 new wells, AND WILL HAVE NO TROUBLE RAISING $39 MILLION DOLLARS TO FUND THEIR EXPANSION. I would not be surprised if they already have the funds and are waiting to announce.
It is simple…. The will raise $39 million dollars, they will drill 300 new wells, they will generate $300 million dollars in new revenue, they will retire their existing debt (within the first year of full operation!), and even if they have diluted to 1 billion shares, HTOG WILL BE TRADING AT .25 IN 12 MONTHS AT THE LATEST!
Regards To All!… TheTiger7777@yahoo.com |
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