Mammoth Energy Group is focused on exploring, developing and extracting shallow gas resources and oil resources. The company identifies and evaluates oil and gas prospects then provides the necessary expertise and capital for development, leading to commercially variable quantities of oil and gas. Mammoth Energy contracts with third parties for prospect drilling operations, negotiating production sales contracts, and delivering oil and gas production to the marketplace.
The Company owns the drilling rights to a 1,400 acre prospect in Oklahoma’s Noble and Kay Counties through its wholly-owned subsidiary, United Gas OK, Incorporated. Plans include drilling up to 60 gas wells on the 1,400 acre prospect over the next two years. The production anticipated from these shallow wells is projected to deliver consistent cash flow over the next 5-10 years which will be used to support further exploration and development projects.
Mammoth Energy Group differentiates itself from other gas exploring companies that invest in large, high-risk projects, by pursing low-risk projects, preferring to systematically build cash flow by cautiously identifying opportunities that offer the best probability for exploration success. Track records have proven that this method has the lowest risk and the highest potential rewards.
In conclusion the analyst who completed the report stated, “Considering our 2010 revenue target and the oil and gas peer group’s average four times Price/Sales multiple, we derive a target price for MMTE shares of $0.30. Accordingly, we are initiating coverage of Mammoth Energy Group, Inc. with a Speculative Buy rating and a $0.30 price target.”
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