Cohen Research Report
Tri-Valley Research Report
by Cohen Independent Research Group
About Cohen Independent Research Group
Cohen Independent Research Group is a registered California Investment Advisor. The purpose of our firm is to distribute unbiased fundamental research reports. CIRG does not manage money.
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Research Report Executive Summary
Tri-Valley Corporation (AMEX: TIV) is an independent energy and mineral development company engaged in diverse businesses such as oil and gas exploration and production, minerals exploration and production, and drilling services. The Company commenced its operations with the acquisitions of working interests in several oil and gas properties in California and Nevada, which currently have more that 100 MMBOE of estimated recoverable oil and gas.
Tri-Valley has designed a comprehensive multi-well drilling program to fully develop its current oil and gas properties by utilizing new technologies such as directional and horizontal drilling and 2D seismic. With the application of advanced technologies, many of the Company’s properties in California will immediately commence production and start contributing to the top line.
The Company’s Temblor Valley property in California includes 860 acres of oil production land with estimated oil and gas of approximately 342.6 MMBOE in place. The field currently contains 56 well bores of which 27 are currently active with average daily production of 100 barrels of oil. Tri-Valley plans a workover and re-completion program at the existing active wells and three new wells in this property by 2007, which is likely to result in a significant increase in the daily production.
Tri-Valley has increased its estimated recoverable oil and gas to 6.1 MMBOE with the modern day evaluation at its Pleasant Valley Property in Ventura County, California. The total recoverable (proven and probable) at this property is 138 MMBOE, providing a great potential to add to the shareholder’s value. The company plans to start drilling wells on this property by October 2006 and expects to start commercial production.
The Company’s Ekho Project (in south San Joaquin Valley) and Sunrise Natural Gas Property (in Delano, California) are its most exciting prospects. We expect these properties to yield large amounts of oil and gas with the deployment of new technologies. The Company estimates the Ekho project to hold nearly 1,657.5 MMBOE and the Sunrise Natural Gas Project to hold nearly 3.3 tcf of natural gas in place.
The establishment of Great Valley Production Services and Great Valley Drilling Services gives Tri- Valley the ability to work on its own oil and gas properties in spite of the unavailability of contract rigs. This will greatly aid the company in its exploration activities and help keep exploration costs down.
Tri-Valley has also identified industrial mineral opportunities in Alaska such as the Admiral Calder Mine, containing a high-grade calcium carbonate deposit. The Company plans to start production on this mine in FY07 and expects it to provide near term cash flow to support the Company’s future exploration and production activities.
The Company’s Shorty Creek and Richardson properties have significant long-term upside potential. The Company has identified targets on these properties estimated to contain nearly 1 MM Oz and 5 MM Oz of gold respectively. Furthermore, fields analogous to these properties hold multi-million ounces of gold in reserves, which increases the Company’s chances of production on these properties.
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