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Avalon Holdings Corp. Message Board

  • tresfind tresfind Sep 27, 2011 1:30 AM Flag

    Ohio oil shale boom?

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    • Co. statement from most recent 10Q: "Due to the increased activity of oil and gas drilling in the Marcellus Shale and Utica Shale regions, Avalon is exploring and researching the possibility of drilling deep waste water disposal wells for the disposal of the brine waters from such drilling and, as such, has purchased options on a number of properties for this purpose."

    • I heard Barry was brought on board because he was going to bring additional business to the waste division but didn't come through when all was said and done.

    • speaking of Berry, what was his leaving all about ?

      Why do you hire a co-god if you wont share the thrown ?

    • A glimmer of hope? If we may ask, who did you call, who returned your call, and what kind of questions did you ask? Steve Berry once called me back before he stepped down unexpectedly, but Coxson/Klingle have never...

    • The waste business benefit is one angle and a nice sweetener. But consider this:

      Klingle probably doesn't even realize it, but the golf courses are literally sitting on top of millions of dollars worth of hydrocarbons. The up front mineral rights and royalty stream from a couple of wells that could conceivably be drilled on the company's 330 acres in the Utica shale are worth more than all of the courses combined. Using Chesapeake's results and recent transactions would suggest $1-1.5m for upfront mineral rights and an NPV of $4-5mn per well at current oil, NGL, and natural gas prices and a 20% royalty. If they got to 160 acre spacing in the Utica, that could mean upwards of $10-12 mn of untapped value. Theoretical, of course, but more than the mkt cap of the company. And AWX could keep the courses in the process and just deal with the minor unpleasantry of seeing a well or two next to the links.

      It's really a shame that he doesn't see how straightforward it would be to send this stock to over $10/share before he retires in a couple of years. It would be quite simple with just a little bit of shareholder friendly communication: commit to keeping capex at maintenance levels for the golf courses, promise not to buy another course or lavishly spend on uneconomic "improvements," look into the Utica angle, begin a formal process to shop the waste business to a suitor (Waste Management just bought Oakleaf for over 5X EBITDA, suggesting $15-20mn is possible), and return the cash to shareholders. If he wants, hell, keep the courses for himself. As a shareholder, I wouldn't mind if we donated the stupid things to him if it means he'd stop spending our money on them.

      Add it up: $6mn of cash+$12mn for courses (if not more)+$15mn for Waste biz+liquidation of working cap would get over $36mn or $9.60/share. He'd personally make millions doing it. Yet, here we sit, less than $2.50/share, worried he's going to buy more golf courses and blow the company's cash position... Remarkable.

      • 2 Replies to mikesydney4
      • Are you even sure that they own the mineral rights to the golf course properties? Also, going back many years the price of the stock has always been well below the book value and much of the time below the cash per share. The whole world is not stupid in determining what this sock is really worth!

      • Stock would jump 50 cents if there was something came down from the board level promissing that he wouldnt buy anymore golf courses.

        But, don't count on it. This is Kilingles company and anyone who disagrees will be ousted.

        Pretty sad when the best thing that could happen for shareholders would be for the CEO and his wife to pass away.

        Maybe then he would realize he isnt god. He just thinks he is.

    • P.S. It is my understanding they have some experience in disposition of oil field waste.

 
AWX
3.6101-0.0999(-2.69%)Sep 16 3:49 PMEDT

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