Sunday, December 12, 2010

rcELF projects conservative analysis of potential JBII price increase

For those on the board interested in the conservative estimate of possible growth in JBII share price as it relates to growth in processors:

It is a conservative estimate to give people something to go off of, after all there are a lot of longs on this board and it only makes sense to try to peek into the future a bit. Lets add another $5 so JBII costs are $20/bbl (the company estimates $10/bbl), lets leave crude at $60. It still works, simply lower the pps by 25% per processor. We know crude is trading in the range of $70-$90, with all likelihood that range will increase over time there is plenty of wiggle room built into the estimate/assumptions. It is also important to remember the stock market is a forward looking instrument i.e. when JBI has 3 working processors will the market value the stock at 4,5,6 working processors? (just an example)
I say have fun!

This is an attempt to break the business model on the first 5 processors, and see what the results are.


O/S: 53,000,000 (Roughly 1.5 million more than current)
Oil: $60/barrel (Bear market/Deflation)
Production:32,000 barrels (20% downtime)
Cost: $15/barrel(claim is under $10)
WTI (Should get WTI+$2, blending site should increase margins)
Taxes:40% (No tax incentives or credits)
PE:100 (Should be very achievable with easily replicated machine and media attention to cheap production, waste to fuel)

EPS/processor: 0.0163

1 Processor $1.63
2 Processors $3.26
3 Processors $4.89
4 Processors $6.52
5 Processors $8.15

Still very good numbers. What are the odds that every variable will come under claims or expectations?

To give an idea of the difference between $60 oil and the price of oil today at roughly $76/barrel, 2 processors would equal $4.41.

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