2) Atikwa Resources (ATK.V 1.5 cents) - this is a small oil play in Western Canada that announced in September it would sell itself. Thursday someone dumped a huge block of stock (27 million shares) and collapsed them from 2 cents to 1 cent. They were forced to issue a release saying they are close to selling all or part of the company, merging, or recapitalizing. Below are some quick notes. I am thinking a speculation at 1.5 cents with hope of making 1 cent in 60 to 90 days (target approx. 50% gain). Downside risk however could be 1 cent. There is 6 million shares for sale at 1.5 cents so good liquidity. Buy side has 14 million at 1 cent.
Shares Outstanding: 290 million (market cap $4.3 million)
> debt of $8 million not devastating but financials are available only to the end of August
> with 268M shares out, they need money and have already messed up their share structure
> book value of exploration assets $9M
> property & equipment $16M
Approx. $4M in annual revenue with marginal loss in last quarter
good land positions and drill locations - but no money to drill
10,856 net acres - I am assuming value of at least $300/acre = $3M
production end of August was 122 bopd light oil
assuming production of 150 bopd light oil - market value is likely in the range of $50,000 per producing barrel but this mostly depends upon reserve life and I don't know what that is at this stage. Numbers can be a lot higher but I think $50k is realistic.
So in theory that production is worth about $7M and land maybe another $2 to $3M.
Independent Reserve Report - Feb 2012
10% NPV of reserves - proved $18M proved + probable $33M