Pangea Petroleum

snappybimmer said: "any thoughts about PAPO.OB for a daytrade or holding it for a short time? Things are getting interesting with petroleum and thought this explortion company might be an intersting pick. Trading was high volume on friday. any comments or thoughts?"

LanceJ said: "The first thing I notice is that this company is a bottom feeder. The company writes: "Pangea is working to create shareholder value by using capital and proven technology to exploit energy prospects that are of minor interest to larger companies due to their size and location." In otherwords, they are not profitable enough sites for larger companies and so they don't want them, and that's what Pangea is doing to survive. In essence it's feeding from crumbs from the masters table. That's not necessarily a bad thing, even the bible elevates this sort of activity, so let's not rush to negative conclusions just yet. But it is important to know this if you think buying this stock is going to land you the next Exxon Mobile or something. This company ain't no Exxon, and with this sort of business model, never will be. They will probably have to change their company vision at some point to get more aggressive, but again, this isn't all bad, just important to know. On to the books. The first thing that jumps out at me is the company's total assets: $237,927. That is a terribly small amount. You would expect property and equipment to be valued at at least $1,000,000 for even a small company starting out in the oil and gas industry. Now my question really becomes is this company just a small office that tries to broker deals that are rejects from the big boys, and match them up with another company that has the equipment to extract the energy component. Back in the business description we have: "The Company is an independent energy company focused on the exploration and development of oil and natural gas reserves, whose core business is directed to the development of oil and gas prospects in proven onshore production areas. Pangea is pursuing a development program designed to achieve profitability by distributing risk across multiple oil and gas projects. Pangea diversifies its risk by carefully identifying prospects that fit within strict parameters and by taking a minority working interest in each project. The Company devotes essentially all of its resources to development of revenue producing activities by keeping overhead at a minimum level through the retention of carefully selected consultants, contractors and service companies." Alright, so they are not a "production" company, they are an "exploration" company and attempt to grab rights on bigger companies rejected sites. Then they work/broker a deal with a production company that actually has the equipment/assets to extract the oil. That is why they have to settle for a "minority" interest in these projects, because other companies/contractors/service companies are doing all the real work. Geezz... the next thing I want to know is how many employees this company has. Looking up in their profile it looks like they only have 2 full time employees! Dude... you could probably create a company like this and run it. They have virtually no assets, and are a 2 man shop! I'm starting to not like what I see, but we'll continue. Revenue as of the first 6 months in 2004 was $37,780... revenue as of the first 6 months in 2005 was $31,839. So the revenue is going down. During the second quarter of 2005, the Company reported $12,841 in revenue. This revenue is from the Company's interest in five producing wells. That's not enough revenue to keep this business going. The company writes: "Since its inception, the Company has suffered recurring losses from operations and has been dependent on existing stockholders and new investors to provide the cash resources to sustain its operations." Now if you look at their net loss, you see that it decreases from $406,992 in 2004 to $99,983 in 2005 for the first 6 months of the year. So something must be improving somewhere right? Well... not really. They haven't increased revenue so how did the expenses decrease so much? You can track most of the difference back to a "dry hole" they had in 2004 that they didn't have in 2005, the line item is "Dry hole costs" and is $105,909. The company was organized on March 11, 1997. After all most 9 years, the company has this to say for its progress? "The Company's long-term viability as a going concern is dependent on certain key factors, as follows: - The Company's ability to continue to obtain sources of outside financing to allow the Company to continue to make strategic investments in new oil and gas well prospects. - The Company's ability to locate attractive development prospects, and coordinate with timely funding that will allow the Company to continue to increase oil and gas reserves and production. - The Company's ability to increase profitability and sustain a cash flow level that will ensure support for continuing operations. They still haven't achieved these goals after 9 years?!?! They are still a 2 man shop after 9 years?!?! They still are relying on "existing stockholders and new investors to provide the cash resources to sustain its operations"?!?! Check out all the big institutional investors and mutual funds that are invested in this company..[url]http://finance.yahoo.com/q/mh?s=PAPO.OB[/url] ......NOT! Zero! This is lower than the average institutional ownership of the Oil & Gas Operations Industry which is 48.0%. This is so much lower that it really speaks to the fact that not even institutions or mutual funds are willing to invest in this company yet, they ain't no dummies. My thought is that this is a bad investment. I'm not really even on the fence on this one, but just to teach newbies good habits, let's use "if you had the cash to outright buy this company, would you?" procedure. Number of outstanding shares reported to the SEC as of August 8, 2005 is 186,679,846. So 186,679,846 x $0.023 = $4,293,636. So if you have $4.3 million dollars, would you buy this company? My answer would be "hell no" (shaking my head like Queen Latifa). So if you wouldn't buy the company for $4.3 million dollars if you had it, then it isn't a good investment."

snappybimmer said: "Hey lance, thanks for the advice. It's nice to have people such as yourself on here lending a helping hand and teaching "us" newbies. I just noticed that there was alot of trading on PAPO this past friday and still don't understand why. Thanks for the help as I learn"

BenHouston said: "[quote] They still haven't achieved these goals after 9 years?!?! They are still a 2 man shop after 9 years?!?! They still are relying on "existing stockholders and new investors to provide the cash resources to sustain its operations"?!?! [/quote] LOL Lance you just owned that company so hard."

LanceJ said: "[QUOTE=BenHouston]LOL Lance you just owned that company so hard.[/QUOTE] Yeah well I'm trying to entertain here at the same time!...Maybe next time I'll throw in some insulting and funny one liners to increase entertainment value a little more... glad you liked it, thanks buddy. :cool:"

akasouthside said: "Haha no doubt lance. Good job."