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Message: Consolidation Services CEO featured on AGORACOM's CEO Interview

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Re: Consolidation Services CEO featured on AGORACOM's CEO Interview

posted on Aug 19, 08 08:24PM

That was an outstanding interview--on both sides of the microphone. It reminded me of why Dr. Thomas's last venture was such a great ride for investors such as myself. He has the tenacity, acumen, and charisma needed to move small companies into the big leagues.

Let me get back to the gas issue. Frankly, the energy side of this company doesn't interest me a great deal, except to the extent that it will make the organic play much easier. Also, it should act as a sort of backstop in case the organic story doesn't unfold as I expect it will given management's track record. Anyway: gas. So if we take 300 wells producing 42 mcf/day and a wellhead price of $6/mcf, that would produce revenues of around $27 million per year, which is about what the company has put forth as a lowball estimate. (As they note, average wells in the area are producing around 390 mcf daily.) Unless I've made some sort of mistake here, it would appear that the company's estimates are based on capturing all of the revenue stream from gas production as opposed to merely receiving a royalty. If that's wrong, please correct me. Whatever the case, it appears that the company should start producing tens (and possibly hundreds) of millions in revenues annually from its energy operations within a few years. Given that energy is, in my view, merely gravy on the meaty organic food story, CNSV is a pretty exciting opportunity. Management met every benchmark it put forth with ABT. I'll be looking forward to seeing coal revenues come in, as Dr. Thomas says they will, in the first quarter of fiscal 2009.

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