Camber Energy Inc (NYSEMKT:CEI)

I work in Texas in the oil industry. What many investors sometimes fail to realize is its not just how large a companies oil reserves are, but how much it costs to extract the oil. The huge advantage LEI has here is it has working interests in over 10,000 acres at Eagle Ford in Texas, valued at over 112 million conservatively, (I based this on $40 a barrel oil), which is some of the cheapest in the world to extract. On top of that at least another 60 million in reserves in Glenrose, etc.

What really gets me excited about this little company, however, was I had thought the Segundo Resource purchase was a pipe dream by Lucas, and how could they ever afford it? Where would they get the financing? And why would the sellers of some of the most prized oil reserves in the country at Hunton sell their interests for pennies on the dollar? All good questions, and all I can say is crazy things are happening right now in the oil U.S. oil industry, many individuals and companies are severely cash strapped -- and it makes for huge opportunities!

The bottom line is LEI now has a significant long-lived reserve base, when you add up the LEI proven reserves, the shallow production cost of drilling, the significant acquisition of Segundo with over 8 million BOE proved reserves, the remediated financial issues with its debtors, the new 5 million cash investment, and most importantly a new restructuring of the entire capital and management team, it makes this a potentially very lucrative winner.

Of my analysis of dozens of small cap oil companies, most with market caps in excess of 100 million, I see no reason why LEI has such an astonishingly low valuation at this point. When compared to its peers, I could easily place a market cap in excess of 75 million here -- and that is very conservative. The share price movement at this point is a bit baffling, but probably based on on clever manipulation which will be followed by enormous upside moon shots. Target at least $30- $45 a share for LEI in my analysis. The incredible thing here, is I could rattle off a two dozen other small oil companies with terrible balance sheets and not nearly the proven HBP acreage or drilling potential as Lucas, with market caps in excess of $150 million. Enough stated. At least a 3 year hold here, and possibly the most undervalued valued company on the entire NYSE.