Source Capital Group Inc. Announces
Investment Opinion on Petrol Oil and Gas Inc.
SCOTTSDALE, Ariz.
Reiterating Recommendation on Petrol Oil and Gas Inc. (OTCBB:POIG) Buy
Recommendation
Source Capital Group Inc. ("Source
Capital") announced today that it has reiterated its BUY
recommendation and $6.00 price target for Petrol Oil and Gas Inc.
("Petrol" or the "company"). Petrol is a participant
in the rapidly expanding exploration, development and production of Coal
Bed Methane ("CBM"), a direct addition to the domestic supply
of natural gas.
"Petrol announced recently that it
completed a private placement of equity with gross proceeds of $6.6
million, which will allow the company to begin to drill its leases in
eastern Kansas and western Missouri," stated Joe Blankenship, vice
president research of Source Capital. "Petrol has leases on
approximately 165,000 acres in the area and has an objective to drill 25
wells in the fourth quarter of 2004. The ease of access for drilling and
completion, as well as the proximity to major natural gas transmission
lines, means the company should be able to have commercial production
from these wells in the first part of next year," Blankenship
continued.
"The company's leases are on
properties that have well-defined geological records of substantial coal
deposits, the source of CBM. Petrol indicates that they will continue to
pursue property acquisitions for reserves and producing wells; however,
the principal emphasis will be drilling, completion and production,
transforming the company to a significant production company by this time
next year," continued Blankenship.
Petrol's stock (POIG - $1.90) is selling
at 7.4 times our fiscal year 2006 estimate of $0.25 per share, giving it
a price below the industry average.
Our 12-month price target for Petrol stock
is $6.00.
Source Capital Group: Source Capital,
headquartered in Westport, Conn., provides high-quality independent
investment services, removed from the typical Wall Street environment, to
individuals and institutions.
Company Overview
Petrol is planning an aggressive drilling
program in 2004-2005 once its current round of fundraising is completed.
Its large 165,000 acre leasehold overlying the Cherokee group and other
coal seams in southeastern Kansas and southwestern Missouri could support
up to 1,700 producing gas wells. The flat terrain of eastern Kansas
offers ease of access for rigs and other development activities. In
addition, the shallow depths associated with the multiple coal seams
being targeted means low drilling and production costs can provide the
company with a competitive advantage.
Coal bed methane production in Kansas has
been growing rapidly, to over 7 billion cubic feet, worth about $40
million, in 2003. This represents a 75% increase from the 2002 production
of about 4 billion cubic feet, according to the Kansas Geological
Society.
Forward-Looking
Statement: The statements in this press release regarding any implied or
perceived benefits from the Coal Creek Project, plans to drill additional
CBM gas wells, anticipated revenues, the actual number of supportable
wells, the acquisition of additional oil or gas leases, maintaining
mineral lease rights, and any other effects resulting from any of the
above are forward-looking statements. Such statements involve risks and
uncertainties, including, but not limited to, the continued production of
gas at historical rates, costs of operations, delays, and any other
difficulties related to producing minerals such as oil or gas, continued
maintenance of the oil field and properties, price of oil or gas,
marketing and sales of produced minerals, risks and effects of legal and
administrative proceedings and governmental regulation, future financial
and operational results, competition, general economic conditions, and
the ability to manage and continue growth.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated. Important factors that could cause
actual results to differ materially from the forward-looking statements
we make in this news release include market conditions and those set
forth in reports or documents we file from time to time with the SEC. We
undertake no obligation to revise or update such statements to reflect
current events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Source:
Petrol Oil and Gas Inc.
Petrol Oil
and Gas, Inc. is a featured company on
www.NaturalGasStocks.com
Contact:
Investor Information:
Petrol Oil and Gas Inc.
702-454-7318
www.petroloilandgas.com
or
CEOcast,
Inc. for Petrol Oil and Gas
Ed
Lewis, 212-732-4300 x 225