NWTR Going International With 9 Acquisitions In 5 Years


Over the past year I have published several articles suggesting oil and gas companies of all sizes that investors should consider when trying to capitalize on the U.S. oil boom. As many of you already know, the United States is on pace to become the largest producer of oil in the world by 2015. Every single one of my oil and gas recommendations from 2013 are up nicely with two having gained as much as 40% and 50%. With that being said, I want to provide an in-depth look into perhaps the most unknown oil and gas company that I've mentioned that has the potential for a big year.

New Western Energy (OTCBB: OTCQB:NWTR) has projects in Kansas, Oklahoma, Texas and Pennsylvania totaling 195 wells holding potential reserves over 20 million BOE. A method of valuing oil and gas companies is the ratio of market capitalization to proven reserves. In a report conducted by Zacks Investment Research, they chose to value New Western Energy at the median value $6.0 per barrel of oil equivalent when comparing similar small oil companies' valuation ratios and figures. Given an estimated reserve of 20.2 million barrels of oil, this implies a market capitalization of $125 million, nearly nine times greater than currently listed. In concluding their research report, Zacks Investment Research determined that a fair equity value for New Western Energy based on this ratio would be about 809% higher than its current share price and has an Outperform rating on the stock.