Investing to Wealth

Savoy Energy Corp. (OTCBB: SNVP)

Savoy Energy Corp. (SNVP), formerly Arthur Kaplan Cosmetics Inc., is engaged in re-entering, re-completing, extracting and selling oil from previously drilled wells in the United States. In April 2009, the Company merged with Plantation Exploration. Subsequent to the merger the Company sold its interest in developing, manufacturing, and selling organic personal care products specifically for men. The Company sells oil it produces to Gulfmark Energy, an oil broker who in turn sells oil to Royal Dutch Shell, one of the world’s oil companies. The Company re-enters and bring back into production wells that have been previously drilled and subsequently abandoned for a variety of reasons.

The Company was incorporated in 1982 and is based in Houston, Texas.

Source: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=SNVP , http://www.savoyenergycorp.com/ , http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=INT&symbol=SNVP.OB

Financial Summary

Total revenue reported for the quarter ended June 30, 2009, was $8,747, a decrease from $88,516 for the quarter ended June 30, 2008. SNVP’s total revenue reported for the six months ended June 30, 2009, was $24,211, a decrease from $150,122 for the six months ended June 30, 2008. The decrease in revenues for the quarter ended June 30, 2009, from the same quarter in 2008 is attributable to decreased oil revenues.

Revenues are offset by the Company’s lease operating expenses and depreciation and depletion of its wells. The cost of revenues for the quarter ended June 30, 2009, decreased to $27,910 from the same quarter in 2008 of $188,871. The cost of revenues for the six months ended June 30, 2009, decreased to $62,795 from the period in 2008 of $356,794. The decrease in cost of revenues is attributable to the natural progression of a deleting asset. The byproduct of the deletion of production results in a decrease in costs.

Gross loss for the quarter ended June 30, 2009, was $19,163, as compared with $100,355 for the same period in 2008. Gross loss was $38,584 for the six months ended June 30, 2009, as compared with $206,672 for the same period in 2008. The decrease in gross loss is attributable largely to a decrease in lease operating expenses.

Operating expenses increased to $830,902 for the quarter ended June 30, 2009, from $32,412 for the quarter ended June 30, 2008. The Company’s operating expenses for the quarter ended June 30, 2009, consisted of professional fees of $7,003 and general and administrative expenses of $830,902. SNVP’s operating expenses for the quarter ended June 30, 2008, consisted of professional fees of $13,746 with general and administrative expenses of $18,666.

SNVP recorded interest expenses of $2,000 for the three months ended June 30, 2009, compared with a gain on the sale of assets of $186,604 for the three months ended June 30, 2008. The Company recorded interest expenses of $4,068 for the six months ended June 30, 2009, compared with a gain on the sale of assets of $44,988 for the six months ended June 30, 2008. The increase in assets in 2008 was directly attributed to the increase in the price of oil and the decrease in lease operation expenses.

The Company reported a net loss of $859,068 or $0.03 per share for the three months ended June 30, 2009, compared with a net loss of $319,371 or $0.02 per share for the three months ended June 30, 2008. It reported a net loss of $913,963 or $0.03 per share for the six months ended June 30, 2009, compared with a net loss of $311,981 or $0.02 per share for the six months ended June 30, 2008.

As of June 30, 2009, The Company had total current assets of $29,755 and total assets in the amount of $651,555. SNVP’s total current liabilities as of June 30, 2009, were $790,480. Therefore, it had a working capital deficit of $760,725 as of June 30, 2009.

Operating activities used $122,369 in cash for the six months ended June 30, 2009. The net loss of $913,963 was the primary component of the Company’s negative operating cash flow, offset by common stock issued for services at $747,000. It recorded no cash flows by investing activities during the quarter ended June 30, 2009. Cash flows provided by financing activities during the quarter ended June 30, 2009, was $135,484 consisting of proceeds from notes payable in the amount of $156,113, offset by the repayment of a bank overdraft in the amount of $20,629.

Based upon SNVP’s current financial condition, it does not have sufficient cash to operate its business at the current level for the next 12 months. The Company intends to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. SNVP plans to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that the Company will be successful in raising additional funding. If it is not able to secure additional funding, the implementation of its business plan will be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

Source: http://finance.yahoo.com/q/sec?s=SNVP.OB

Analyst Consensus

Chart not available.

Source: Financial Times.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/estimates?symbol=SNVP.OB

Investment Highlights

SNVP announced earlier this month that it has successfully installed the Jack Shaft Reducer on its Rozella Kifer Well. The Jack Shaft Reducer is expected to increase efficiency and decrease maintenance costs, which should in turn extend the life of the well’s production. “With the Rozella Kifer already operating on electricity it is the perfect well to install and monitor the results of the Jack Shaft Reducer. I am pleased to see that the speed of the electric motor, and the stress on the rods have both been reduced. This will have a direct effect on the operating costs for this well. We learned much during this installation that will enhance future installations of Jack Shaft Reducers,” Art Bertagnolli, CEO of SNVP, stated in a press release.

According to SNVP, when a well no longer produces or produces so poorly that it is a liability, it is abandoned. In this process, tubing is removed from the well and sections of wellbore are filled with cement to isolate oil and water zones from each other, as well as the surface. Completely filling the wellbore with cement is costly and unnecessary. The surface around the wellhead is then excavated, and the wellhead and casing are cut off, a cap is welded in place and then buried. The production from an oil well declines over time as oil is extracted. The point at which the well no longer makes a profit and is plugged and abandoned is called the Economic Limit. The equation to determine the economic limit contains four factors, namely: (1) taxes, (2) operating cost, (3) oil price, and (4) royalty. Because of differences in operating costs, different companies may have different Economic Limits for a given well. At this point is where SNVP feels they have a competitive advantage. While SNVP explores only wells that have been dug already, they cut down significantly on their cost of production. Since they have spent less getting to the oil, it is cost effective to extract it, and significant profits can be achieved.

Source: Scottrade.com, Reuters.com, savoyenergycorp.com

Technical Analysis

Source: www.stockcharts.com

Moving Average Price Compare

No current signals.

Bollinger Bands

SNVP’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, SNVP is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

MACD

SNVP’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

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