I'm no expert on this new project but from my understanding the oil companies only provide the byproducts from their oil production to APGI for processing. There is no financial investment being made by these companies. They could share in the revenue thus it being financially beneficial for them.
There will always be oil wells that are remote or stranded. They will not be affected by the new spending. This reality justifies the growing need for APGI solutions.
It is possible that APGI could supply units to capture the gas for resale. The margins might not be as good but still profitable!
I have to agree more with chicken1little2012.
When I first brought this stock, mangt. said it has a PV90M. They then sold it for what I figure was around 24M.
Then they a brought a property in Kansas that needed to be developed, The company's G&A was MORE than the REVENUE it generated!! I'm not kidding!!! Check the Financial statements
Then they delayed the drilling of the WY well so long that they had to get an extension and then didn't have money to test it.
When this was happening I could believe that things could get so screwed up. I thought that mangt experience (also the large pay) meant that they had to be competent. I was wrong!!
My Plan would have sold half or all of the LA propertries ( hopefully at a higher price). Then use those funds to develop the WY properties plus cut the G&A costs. I would NOT have purchased the KS property.
You might say this is Monday morning quarterbacking but as I said before I couldn't believe it when it was happening,
It will be interesting to see what the properties go for in bankruptcy. I think the properties are more valuable than the debt but with so many other opportunties around who knows what they will get.
In the last year, the management paid themselves well for not saving the company. The company has a field in Kansas plus a completed but not tested well on 9,000 acres in WY.
Will be interest if Mangt. or friends bid on these properties.
At this time, the ROI between diesel vs Nat Gas is very low in most of the country. The best selling point now is the environmental angle (cleaner air). The method to use to sell solar power in the major cities where ROI is the secondary reason to convert.