With all the talk about what is in GreenShift's future, I though investors might enjoy this echo from the past. I thought it interesting that from the date of the information release until the shares stopped trading - post after post on the boards said that the 50 cents a share would never be paid. Starting out you could pick up the "50 cent" shares for less than a quarter and until the day they stopped trading you could buy them at a discount. The shares were bought back without a hitch by the company for 50 cents each - on the day scheduled. I know - I bought some and the money was deposited in my brokerage account! The doubters on the boards never even blinked. They just went on as if it never happened. lol
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New Biofuel Strategy: GS AgriFuels Goes Private
December 28, 2007
As biofuel share prices remain low, GS CleanTech decides to streamline its biofuel assets into one public company and take GS AgriFuels private. In what could be another sign of the times for the biofuel industry, GS CleanTech Corp. announced Thursday that it plans to take its biodiesel subsidiary, GS AgriFuels Corp., private. If the plan is approved by YA Global Investments, the companies' senior creditor, GS CleanTech will transfer its GS AgriFuels stock into a new wholly owned private subsidiary, which will then merge with GS AgriFuels, making it a private company by the end of February.
The plan also calls for other GS AgriFuels shareholders to be bought out at 50 cents per share -- more than double Wednesday's closing price of 21 cents per share. The move is part of a restructuring effort in which the parent company, previously GreenShift Corp., has transferred all its assets -- including majority stakes in GS AgriFuels, GS Energy Corp., GS EnviroServices and GS Ethanol Technologies -- to its subsidiary, GS CleanTech, which will then change its name back to Greenshift in January. Kevin Kreisler, chairman of both GS CleanTech and GS AgriFuels, said the point of taking GS AgriFuels private is to concentrate all of GS CleanTech's biofuel business into one public company.
See this Old Article HERE
SkunK
Tuesday, December 7, 2010
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27 comments:
The price is right...
Buyout of gers....
what are the thoughts here...
looking for no share structure breaks....would .01 eg 1 cent about right....that would be 130 million dollars for the 13 billion outstanding fully diluted shares....sKunK maybe set up one of your polls regarding a buy out price if you think that is a possibility..
glta longs
Well, if they can produce 700 mmgpy of corn oil, which is worth $2 per gallon, that's a total of $1.4B per year.
20% IP royalty on that is $280 million per year, less the royalty to the inventors of $0.10 per gallon = $280 - $70 = $210 million per year.
Put an 8 multiple on that = $1.6 Billion.
Less $70 million in debt = $1.53 Billion.
$1.53 / 13 Billion shares = $0.12 per share.
Maybe another $0.01 per share, or so, for the R&D pipeline.
jgtex
right...that is the sort of input that is very helpful....so then you really do believe a cash out of around 1 billion is feasable...that would be sweet..who would not be happy anywhere near 10 cents...i would for sure..
glta longs
On second thought that $0.01 per share for the pipeline may be a bit high.
Let's just say ... "a bit more" for the R&D pipeline.
It is feasible, especially given the predictions for rising oil prices.
Remember. We are talking about oil, here. Oil reserves are getting harder and harder to find.
That analysis I presented is very "back of the envelope". I will elaborate some of the details here, now.
I figured 20% of the sales price of the oil.
On second thought, that 20% IP royalty may be figured on profit rather than sales, which could bring down the valuation.
What is the cost of corn oil production from a COES installation? Anyone know?
If the cost is $0.50 per gallon, then the profit per gallon is $1.50 per gallon. Less the $0.10 per gallon to the inventors = $1.40 per gallon.
$1.40 per gallon * 700 mmgpy = $980 Million.
Less $70 Million in Debt = $910.
$910mm / 13 B = $0.07 per share.
There may also be anti-trust issues. Federal law prevents any company from having 100% market share of anything.
So, you might want to use 75% market share as the maximum, instead of 100%.
0.75*$0.07 per share = $0.0525 per share.
So, you might put a range on it ...
$0.05 - $0.10 per share
terrific jgtex..
i am extremely poor at accounting for these things...i am a biologist and am here by chance when studying up on algea reactors...long story... now i have around 50 million shares..so would an under paid biologist enjoy 5 to 10 cents a share...life changer
Of course, if you believe that oil is going to $200 for an extended period of time, as some do, then you could raise the price by 2-3X.
$0.10 - $0.30
Another way of valuing this COES process is using the methods of conventional oil reserves.
700mmgpy of oil production for 15 years = 10.5 Billion Gallons of PROVED OIL RESERVES.
10.5 Billion Gallons / 42 Gallons per Barrel = 250 Million Barrels of Proved Reserves.
In their acquisition of XTO Energy last year, Exxon Mobil paid about $10 per Barrel of Proved Oil Reserves, if memory serves (you can look it up, if you want).
$10 per Barrel * 250 Million Barrels = $2.5 Billion.
$2.5 Billion less $70 MM debt = $2.43 Billion.
Divided by 13 Billion Shares = $0.18 per share!
By the way, I am a Biologist as well. I also have an MBA.
These are just estimates. Different ways of valuing the pie.
At the end of the day, the only real valuation is what the buyer & the seller agree to ... ie the transaction price.
Unless and until a buyout transaction occurs, we can only make educated guesstimates.
And, remember, all this talk about a buyout is just talk.
KK conversion to common stock may just be for trading purposes, or for some other reason.
We are all just speculating about a buyout. It may not even happen at all!
Skunks latest post about "SIRE" also highlights another risk that should be factored into the valuation ... LITIGATION RISK / PIRATE RISK.
A lot of folks seem to be pirating the technology!
Here is a link to a news release about the XOM - XTO acquisition.
You will see that they talk in terms of "Proved Reserves". That's when they have proven that a particular oil or gas field contains a certain amount of oil or gas.
My calculation above converts GreenShift's COES patents into those terms ... Proved Corn Oil Reserves of 250 Million Barrels.
http://www.prnewswire.com/news-releases/xto-energy-increases-proved-reserves-1-tcfe-to-a-record-1483-tcfe-84579737.html
By the way, as a biologist, you might be interested in my work in the algae fuels industry ... another great potential source of US oil supply!
http://sites.google.com/site/txclfs/
Even with all the risks and valuation adjustments, I'd be surprised to see GERS sell out for under $0.03 per share at the very bottom of the range, and it would not suprise me to see a much higher valuation, closer to $0.10 per share!
Any way you slice it, this stock is deeply undervalued at current prices.
Here is an article about oil & gas M&A activity in recent years.
It says, and I quote, "The buyers paid an average of $12.61 per barrel of oil equivalent (BOE) of proved reserves."
$12.61 * 250 million = $3.152 Billion
$3.152 Billion / 13 B = $0.24 per share!!!
http://stocks.investopedia.com/stock-analysis/2010/Energy-Mergers--Acquisitions-In-Comeback-XTO-XOM-CHK-TOT-RRC0217.aspx
The problem we are having right now is that US COES Patent Pirates are worse than the Oil Tanker Pirates off the Somali Coast of Africa!!!
jgtex,
many thanks...i will look up your work on algea!.....
great analysis...looks like the market would value this thing minimally at 5 pennies...as they say the rest is gravy!...there is no telling how this will get structured...my gut tells me that KK would like to exit and sell the whole enchalada...he has battled this companies problems for his whole adult life...he did give up control of his company at the share conversion....
Its kind of like having 3 80Million Barrel fields of oil, proven, with one of those 80 Million Barrel fields having been taken over by pirates!
Legally, we own all three oil fields, but its going to take some heavy duty firepower to get those pirates to give back that one field.
A range of $0.05 - $0.08 per share sounds about right to me for a buyout.
Again, we should remember that all this talk about a buyout is speculation in the first place.
If there is no buyout or major debt restructuring, then we may still hobble along with all this debt and a beaten down stock.
There may be some who say, "How can this company possibly be worth over $1 Billion, when it only has a few million in sales?"
Many oil and gas companies trade for values higher than the current year sales and cash flows.
In that Exxon Mobil acquisition of XTO energy, the proved oil reserves were valued at close to $3 Billion, according to that article I posted here.
Those proved oil reserves were not producing any sales or cash flow THIS YEAR, but they were still valued at nearly $3 Billion.
In a high oil environment, it is not uncommon to see investors and/or corporate acquirors putting a premium on future cash flows represented by proven, but undeveloped, oil reserves.
Oil Industry Jargon:
Unproved Reserves = "We have some early indications of an oil find, but have not yet confirmed the size and extent of the find."
Proved, Undeveloped Reserves = "We have confirmed to a reasonable level of certainty the size and extent of this particular oil reserve; but we have not yet built the extraction systems needed to extract the oil to the surface."
"Developed Reserves" are not only proven, but the extraction systems have been built and are ready to begin production at a moment's notice.
"Producing Reserves" are actually producing oil flow in the current year.
In its acquisition of XTO, Exxon paid $12.60 per barrel for XTO's "Proved Reserves" even though they weren't yet developed or producing.
Just been thinking some more about the massive conversion of preferred into common stock.
They may simply be doing an accelerated mass conversion of all the YA debts into common stock, in an effort to boost the attractiveness of the stock via debt reduction.
If, for example, all of the YA debts are settled in one fell swoop by exchanging them for 10 Billion shares of Common Stock, then the company would have a much stronger balance sheet and the stock might command a better price.
Who knows?
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