To OTC Journal Members: vom 24.03.01
Yesterday, just after the market closed, Energy Power issued a press release which we believe completes the balanced picture for this company. When we considered renewed coverage of this stock back in January, Jim Cassina, the President and CEO laid out his game plan for this company, and he is delivering everything he promised. We continue to believe this stock will eventually find it's way to the industry average of 2.8x book value, about $5.50 per share.
He is modeling his company after the highly successful Enron Corporation (NYSE: ENE), a vertically integrated company that excels in all aspects of delivering energy.
Energy Power has three divisions, all of which are expected to expand. The three legs of their stool are as follows:
Engineering & Offshore Division- 35 year old Newfoundland Company which provides construction and fabrication facilities in Atlantic Canada for major off shore exploration projects. They are receiving ongoing contracts from the huge Hibernia project of the coast of Newfoundland, and expect to participate in the multi billion dollar White Rose project coming in the Fall.
Power Division- They have contracts to deliver power and are developing Power Plants in two locations in India. There is an enormous demand for power in this 3rd World country, and Energy Power will eventually enjoy tremendous cash flow from these two plants.
Oil and Gas Division- This division has a combination of exploration properties and proven existing properties which generate ongoing cash flow. Yesterday's news release highlights the first acquisition of a field which will produce cash flow for the company.
Yesterday the company announced they had acquired 25% interest in a natural gas producing property. In discussions with management we learned that the Sibbald area highlighted in the press release currently produces about $50,000 per month in positive cash flow. Furthermore, there are more drilling opportunities on this property. The $600,000 investment the company made in this acquisition will be repaid in one year at the current rate.
Energy Power also owns leases on which they can explore for natural gas near Nova Scotia. As depicted in this map, their property is right in the heart of Natural Gas country in Atlantic Canada. Also depicted are the strategic locations of wholly owned subsidiary M&M's production facilities. These fabrication facilities are ideally located for a major piece of the highly anticipated multi billion dollar White Rose project. These leases represent the opportunity for a home run in the stock if substantial Natural Gas reserves are discovered on the properties.
We have always felt this stock would eventually trade at 2.8 x book value, the industry average. This would put the stock at about $5.50. Yesterday's news reinforces this belief, and if the company continues making sensible fundamental moves of this type this stock will find its way to higher levels.
We believe energy prices will be very high for several years to come. Experts are now talking about gas at $3 per gallon at the pumps by this summer.
Energy Power is perfectly positioned to expand to fill the demand scarcity brings to the market. The stock is under followed right now, but money is starting to flow into the secondary and tertiary stocks in this industry group.
Continue to accumulate a position in this stock for a move to $5.50 later this year or early next. This represents a 155% return from Friday's closing price.
Yesterday, just after the market closed, Energy Power issued a press release which we believe completes the balanced picture for this company. When we considered renewed coverage of this stock back in January, Jim Cassina, the President and CEO laid out his game plan for this company, and he is delivering everything he promised. We continue to believe this stock will eventually find it's way to the industry average of 2.8x book value, about $5.50 per share.
He is modeling his company after the highly successful Enron Corporation (NYSE: ENE), a vertically integrated company that excels in all aspects of delivering energy.
Energy Power has three divisions, all of which are expected to expand. The three legs of their stool are as follows:
Engineering & Offshore Division- 35 year old Newfoundland Company which provides construction and fabrication facilities in Atlantic Canada for major off shore exploration projects. They are receiving ongoing contracts from the huge Hibernia project of the coast of Newfoundland, and expect to participate in the multi billion dollar White Rose project coming in the Fall.
Power Division- They have contracts to deliver power and are developing Power Plants in two locations in India. There is an enormous demand for power in this 3rd World country, and Energy Power will eventually enjoy tremendous cash flow from these two plants.
Oil and Gas Division- This division has a combination of exploration properties and proven existing properties which generate ongoing cash flow. Yesterday's news release highlights the first acquisition of a field which will produce cash flow for the company.
Yesterday the company announced they had acquired 25% interest in a natural gas producing property. In discussions with management we learned that the Sibbald area highlighted in the press release currently produces about $50,000 per month in positive cash flow. Furthermore, there are more drilling opportunities on this property. The $600,000 investment the company made in this acquisition will be repaid in one year at the current rate.
Energy Power also owns leases on which they can explore for natural gas near Nova Scotia. As depicted in this map, their property is right in the heart of Natural Gas country in Atlantic Canada. Also depicted are the strategic locations of wholly owned subsidiary M&M's production facilities. These fabrication facilities are ideally located for a major piece of the highly anticipated multi billion dollar White Rose project. These leases represent the opportunity for a home run in the stock if substantial Natural Gas reserves are discovered on the properties.
We have always felt this stock would eventually trade at 2.8 x book value, the industry average. This would put the stock at about $5.50. Yesterday's news reinforces this belief, and if the company continues making sensible fundamental moves of this type this stock will find its way to higher levels.
We believe energy prices will be very high for several years to come. Experts are now talking about gas at $3 per gallon at the pumps by this summer.
Energy Power is perfectly positioned to expand to fill the demand scarcity brings to the market. The stock is under followed right now, but money is starting to flow into the secondary and tertiary stocks in this industry group.
Continue to accumulate a position in this stock for a move to $5.50 later this year or early next. This represents a 155% return from Friday's closing price.
