In May of 2008 WLL paid $330 million for 11,500 net acres 4 miles away from Royale Energy's 15,000 net acre lease in the Uinta Basin. Royale Energy has the legal right to sell the Utah lease to a buyer like WLL.
5% of $330 million is $16.5 million.
100% of the shares of ROYL are worth $16.2 million.
Right now the stock market is valuing all of the assets of Royale Energy in Utah at $16.2 million and it is valuing all of the leases and wells in California at Zero.
1/4 of a mile from ROYL in Utah is the Stewart Petroleum well that is averaging 4 mmcf per day in daily natural gas production. The Stewart Petroleum well is worth $16 million all by itself even in this down market.
Royale Energy owns a working interest in thousands of net acres and owns a working interest in dozens of natural gas and oil wells. A share of ROYL represents a percentage ownership stake in the leases and wells.
Royale had over $6 million in cash and had bank debt of less than $3 million on September 30, 2008. The stock market is valuing the cash for zero as well.
By selling ROYL shares for $2 a person is selling Utah for 5% of what WLL paid for a lease 4 miles down the road, is selling California's leases and wells for $0, and is throwing the cash in the trash.
I had you on ignore, so I didn't see this until I saw the other posters message. I don't post under other names. I have to laugh at your post. I have objectively presented facts to support my position and thought your posts were worthless since the beginning.
You do nothing but sing the praises of ROYL and keep bringing up old news. You indicated the lawsuit by their partner on V20-2 - that was stupid comment. Recently you indicated that ROYL's Q4 results were not that bad - that was stupid. I also posted a fact based summary of their 10K.
Then, when faced with delisting, you indicated that ROYL getting extra capital was good. That the board approving additional equity was good. That's right - issuing 5 million more shares that will dillute your PPS by half was good. That was really stupid.
So, there are a number of facts which support the other poster calling you stupid. So with the above said, I am stating for the record that you are a real dumba$$ and I am guessing you are a young punk. So punk, get ready to lose all $300 you invested in ROYL.
Let's assume they are the same person. I really don't know or care.
I have read both of your posts (Pearls and yours). I have concluded he is correct. I have looked at both your posts. He made a solid call on Royale back in November and was a solid supporter of ROYL until that time. You, on the other hand blindly pump this stock - no matter what.
I also see a lot more facts in his posts. He explained in detail why this stock was going to fall and got out. He appeared to be following it - hoping the price would drop. He was smart and knew when to get out. You on the other hand keep pumping away. Where are your facts to support buying this stock at $1.90. From what I see, you keep talking about how far ROYL is from another company's well. They have been close to that well for a long time.
I guess he is correct. You appear to be stupid. I'm sure I'll now be classified as another name posted by pearlcity. I can assure you that I am not. I will put you on ignore so I don't have to see your posts anymore - they are worthless
The Whiting wells and the Stewart well are the holy grail of drilling in the Uinta Basin. With so much gas so close and so many square miles to prospect on, it is just a matter of time before Royale reports hitting something significant in Utah.
Not worried about the balance sheet. The oil and gas properties are worth far more than the accounting allows. The Rio Bravo sale is all the proof anyone needs to know this.
What part of today don't you understand? NG down - everything up big time - ROYL down. This stock is at the beginning of a steep slide. Nobody wants to buy or sell this stock. Anyone holding it is doing nothing more than gambling. At least Regere admits that. You on the otherhand, pump blindly.
I believe you indicated that ROYL seeking extra capital is good. One of two things has to be true. You are and idiot or you are attempting to mislead other intentionally. I hope it is the latter, because nobody can be that stupid.
fastball you will have to wait a long time or at least a year since Royal has said (can you believe them?) they will focus drilling in Cal. Repeat Cal.
Now you may not care about the balance sheet but I assure you Nas does as well as banks and I assume anyone who owns stock in Royal other than you. If the cash flow does not allow for drilling or debt repayment the company will go BK with all those billions up in Utah you seem only focus on.
ROYL just needs to drill and increase production and the price of the stock will take care of itself. Its not like ROYL is the only stock in the market being given away at ridiculously low prices.
Rogere, I got the net acreage off of both of the 2007 10-Ks. The production comes from the California website. ASPN only retained an average working interest of 33% whereas ROYL has a working interest over 50% in California. Plus, the Parks well in California is confidential and does not show up on the production for that well does not show up in the website.
The California oil and gas is worth $2 if you sell in the middle of a credit crunch when most companies are desperate to preserve cash and if you sell when natural gas is $4 per mcf, which is below replacement cost for overall current North American production.
There are only a few large companies that have not cut their captial expenditures budget by 50% to 90%. In a few months supply of natural gas will not meet demand. Demand for natural gas is only down about 6% and almost all of the decline is from industrial use. There is no decline for heating or for electricity.
ASPN was able to sell its California wells and leases a couple of weeks ago for $8 1/2 million. Royale has comparable leases and wells to ASPN in California and almost double the net acreage and net production.
It is California that is worth $2 and it is Utah that is free.
SSue do you have any production numbers on how much oil and ng ASPN sold at 8.4 million dollars?
I do not value reserves as much as you unless they are proven. Utah is not the vast valuable reserves until they are proven nor is Cal.
Production is king with me and would be glad if production of Royal was well above that of ASPN in Cal and frankly if both about the same then the 8.4 million is to me a downer. I would like to think that Royal production and proven reserves in Cal are worth more than 2 bucks a share since at present I just do not put much value in Utah given the market and royal ability to "bring in" a big well.
Ironically, as bad as the economy is and as low as natural gas prices have fallen, the only real drop in demand is from industrial sources.
Demand for steel is down over 50% while demand for natural gas is down 5%.
With the impending fall in supply for natural gas it is only a matter of time before demand exceeds supply. Or, in the interim we may get news on Utah or the Cornish #1 well in California.
Utah gas is definitely worth something. New York City is closing its schools today because of a massive snowstorm in early March.
They are burning natural gas because baby it's cold outside.
Just because ASPN sold some wells and leases in California for $8.5 million doesn't mean Royale's California acreage is worth only $15 million to $20 million.
The Andrus Island East well and the Lone Star East well are both new discoveries. These discoveries didn't exist when the year-end 2007 10-K filings were put out by both ASPN and ROYL.
ASPN was a desperate seller and they sold at the bottom. Royale has plenty of cash and a new line of credit and can take advantage of bargains in the market right now.
Additionally, Royale will be drilling the Cornish #1 well in California. They claim it could be their biggest discovery ever.
Clearly there is no value in the shares of ROYL for Utah. Bear markets create great opportunities for investors and the ASPN sale and the WLL buy demonstrate the tremendous upside potential for these shares.
Royale is able to get a large line of credit from the bank becuase of the gas in the ground under their leases. The possible reserves in Utah are potentially as high or higher than 1 trillion cubic feet.
Its real simple, Entrada, Dakota, Mancos Shale.
You got to be kidding me right?? You think a bank will loan money on a maybe??? If so why only 15 million?
You blue sky boys are not quite as bad as felps since you do not wish bad things on people but your facts are about as good as his. All emotion and no value at all.
Potential is not what a bank loans money since it equals maybe. The bank loan is a good sign but no because of your way of looking at it you way is just wishful thinking and nothing more.