TAMO Is My Featured Company For An Oil-Thirsty Economy
June 14th, 2009 at 11:00 pm Posted by The Dean
Crude Oil Prices Are Hovering Near $70/Barrel
Lately, The Dean has been on fire. Biotechnology month is off to a great start, and we even called the top on SPNG perfectly! In fact, the CollegeStock brand is becoming so powerful, that we may have actually contributed to the demise of Spongetech last week.
That is the power of The Dean. I’m in New York, prepping for my new television series, which will air nationwide on FOX, and students have no idea how big the community is about to become. Right now, I’d like to take the time to highlight one particular oil stock solely because crude oil prices just struck a new high for 2009. Crude oil is hovering around $70 a barrel, and I believe it’s a great time to start looking at oil stocks.
The oil company I would like to feature over the next few weeks is TAMO. Please understand that crude oil is a hard commodity, which makes it a great way to protect yourself against rising inflation. In fact, if you own crude oil, you’d essentially be profiting right now simply off the decline of the US dollar since crude oil has historically traded inversely to the currency. The most valuable part of TAMO‘s business is the Manning Project, which is reported to contain 3.1 billion barrels of heavy oil.
You heard that right, TAMO is sitting on more than 3.1 billion barrels of heavy oil, originally-in-place resources on its Manning Project. One common way to value junior oil stocks is to use their enterprise value with proven and probable oil returns. Enterprise value, or EV, is an economic measure reflecting the market value of the whole business. In turn, valuations are based upon the implied price that the market places on each barrel of oil or oil equivalent that the company has in the brand.
The enterprise value for TAMO, based on a 35% recovery rate, is reported at $221,121,012. With 79,780,000 shares outstanding, this equals an EV per share of $2.75. In the long term I believe that oil prices will rise substantially, which will increase the company’s enterprise value, and therefore, the value of TAMO.
The fact that oil is so hot means that there are many plays to be made, but you’ll need to do your homework to find the real gems.
Disclaimer: We have been compensated $10,000 by a third party, 546 Holding Ltd. for business development and corporate communications services.
