It has become increasingly attractive for the oil industry to turn its attention to developing effective exploitation and producing techniques for known heavy oil deposits, due to the current decline of conventional oil reserves and strong commodity prices.
Industry players have been aggressively acquiring large land positions and started evaluation drilling, development drilling and producing heavy oil from Mississippian carbonates in the Peace River region.
TAMO's strategic land program has resulted in the successful acquisition of a total of 2.33 billion barrels of oil. That's right, 2.33 Billion!
According to a recent research report (viewable at http://www.sism.com/Tamm%20Oil%20Research%20Report%20May%2018%202009.pdf ) "...Tamm Oil and Gas is sitting on more than 2.3 billion barrels of heavy oil originally in place resources on its Manning Project. The Company will target the two most significant potential carbonate reservoir zones in the area, the Elkton and Lower Debolt formations..."
The report goes on to read, "...Tamm Oil has created a significant amount of value over the last two years by acquiring substantial heavy oil resources in the Manning Area in Peace River. Most of this value is not yet recognized in the share price. Currently, the Company is valued at half of its landholding, which should be worth $89.6 million or $1.43 per share. The current EV ratio on 2.33 billion barrels of heavy oil originally in place is only $0.02, and on estimated recoverable resources $0.057. Further, established and developed oil sands companies are trading at an EV ratio of $1.0. Resources locked in carbonate rock like Tamm’s are more analogous to oil shale for which there is a substantial discount relative to oil sands resources. Therefore, an EV ratio for Tamm of $0.75 is appropriate. We have been using three different metrics to assess the value of Tamm Oil, which included a pre-production assessment on 2.33 billion OOIP at $0.10 per barrel, a 35% recovery rate on 2.33 billion OOIP at $0.20 per barrel, and value for land based on an average of what has already been paid for. Based on our findings using three different valuation metrics, we believe today’s value for TAMO shares should be $3.02. Long-term, using an EV ratio of $0.75 instead of $1.00, and assuming a 35% recoverable rate of heavy oil, TAMO is worth $9.80 per share...."
So, according to the above report, TAMO should be worth over 275% more than its current share price of $0.75!
TAMO's 2-month chart is showing a great upward trend. It shows a lot of momentum building to soon be testing the $1.00 area. TAMO has the potential to be our biggest stock pick this year! Make sure you don't miss out. Do your research on TAMO right now!
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