Almost everyone in America is familiar with Exxon Mobil, a company that is vastly known for their rather expensive acquisitions. In the past, what common qualifications did these superior companies possess to peak Exxon's interest for an acquisition?
Comparison is key when it comes to a bold claim such as this. Thankfully, with a little help from Google, we were able to research statistics on a company that has already been taken over by Exxon, and was very similar to Mountainview's current state.
Celtic Exploration Ltd. was taken over by XOM in 2012 for $2.6 billion. During Celtic's 2012 state, they were producing roughly 4,000 BOPD between Canada's Montney and Duvernay shale fields, which measured 545,000 acres and 104,000 acres. At the time, Exxon Mobil's Canada President Andrew Barry was upbeat regarding the deal, stating, "This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio."
Presently, Mountainview is producing a ballpark figure of 1,700 BOPD between 6 current well productions. Estimating that Mountainview makes a $100 profit per barrel, that's an estimated revenue of $170,000 per day with 2 other well production statistic announcements still pending. Assuming an extremely worst-case scenario, if those stats boosted MVW's production to 2,000 BOPD, we're projecting yearly revenues $73,000,000. What do these numbers mean? In means Mountainview is producing about half the BOPD and cash that Celtic was. The other difference is that Celtic had access to roughly 5.5 times more acres. However, Mountainview could potentially have over 160 drilling locations on 13,000 acres so far, with less than 5% of the ground being drilled to date. This company could futuristically be producing astronomically more BOPD than Celtic was before the Exxon takeover. With that, comes increased revenues, so on and so forth.
MVW's management have also succeeded in increasing production, while decreasing costs from almost $8,000,000 per well to $6,000,000. Results like this go straight to the bottom line and returns for investors.
I try not to insult anyone's intelligence with statements like these, but with Mountainview's current trading price at $0.55/share, I'm labeling this company as extremely undervalued. Comparing MVW with a similar company, American Eagle Energy Corporation (AMEX: AMZG); whose stock price is over 3 times the price of MVW's seems fitting. Looking at AMZG's most recent oil production stats from a press release on Aug 19th, 2013, I quote "an average of 1,288 barrels of oil equivalent per day" for AMZG. I'm not an oil and gas company expert by any means, but I believe that Mountainview's statistics are impressive.
From a value standpoint Mountainview has secured $75,000,000 in funding from a large US bank, has an enterprise value of $90,000,000 and has roughly 62% insider ownership from some of the most successful oil and gas players in the Bakken today. This is extremely important when it comes to the "safety" of the stock price, however, I must use that term loosely given the fact that we're talking about the stock market. In the past few years, Exxon has been keen on finding companies with very similar characteristics as MVW. One of Exxon's larger mergers, a $41-billion deal in 2009 to buy XTO Energy (NYSE:XTO), paid off huge for shareholders. Under the terms of the deal, Exxon paid XTO shareholders 0.7098 common shares for each of their XTO shares, or about $51.69 based on the Friday prior to December 14, 2009 closing prices. The deal, which was taking advantage of low natural gas prices, represented a 25 percent premium for XTO's shares. Exxon also bears the weight of risk. Exxon operates in many high-risk countries, where its contracts are at risk of being altered whimsically by government officials. Last I checked, the Canadian government hasn't lost their mind yet. MVW would slightly reduce some of this risk for Exxon.
Unfortunately, I can only begin to scratch the surface of MVW's accomplishments. Especially in just the past year, from boosting production over 1,200% to the 50+ years of collective experience their dream team has to offer. As always we encourage our readers perform their due diligence and add this company to their watchlist.
