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Analyst: Lisa Springer, CFA

Initial Report
October 15th, 2008

PLTG daily 10/03/08


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Platina Energy Group Inc. 0.8
14850 Montfort Drive, Suite 131 volume © BigCharts.com
Dallas, Texas 75254 400

300

Thousands
Tel: 972.458.9600 200

Fax:480-287-9560 100

www.platinagroup.com 0
Aug Sep Oct

MARKET DATA Company Introduction


Platina Energy Group Inc. (OTCBB: PLTG) is an independent ex-
ploration and production company with multiple oil and gas lease
Symbol PLTG properties in North America and a proprietary enhanced recovery
Exchanges OTC BB
technology. Headquartered in Dallas, Texas, the Company owns
Current Price $0.05
Price Target $0.30 net proven reserves of 2.9 million barrels of oil and 21.6 thousand
Rating Speculative Buy million cubic feet (MMCF) of natural gas.
Outstanding Shares 156.6 Million
Market Cap. $6.4 Million PLTG operates as a publicly traded company with several wholly
Average 3-m Volume 666,715 owned subsidiaries. The Company’s strategy is to minimize risk by
owning a diversified portfolio of energy sector subsidiaries, includ-
ing Appalachian Energy Corp., Wildcat Energy Corp., and Platina
Source: Yahoo Finance, Analyst Estimates
Exploration. The Company’s subsidiaries own oil and gas leases
in Hawkins County, Tennessee, in Young County, Texas, in Rusty
Creek, Wyoming, in Seminole County, Oklahoma, and in Laurel
and Whitley Counties, Kentucky.

PLTG also holds rights to a proprietary technology, the Thermal


Pulse Unit (TPU), designed for cost-effective and eco-friendly oil
well stimulation and enhanced oil recovery. On October 2007, in
order to coordinate private equity raising activities, the Company
formed Applegate Petroleum Management LLC. In line with the
Company’s strategy to grow both organically and inorganically,
on March 31, 2008, PLTG acquired Enhanced Oil Recovery Inc., a
wholly owned subsidiary of Utek Corp. Oil Recovery Technology
currently has two TPU units deployed and operating successfully
in the field.

An independent geologist report on the Company’s Appalachian


Basin property states that proven reserves have a present value dis-
counted over 10 years, exceeding $62 million. PLTG has established
Platina Energy Group, Inc. ( OTCBB:PLGT) 1
Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

production at increasing levels from its Young County, Texas, property. The Company’s production estimate for
its Kentucky properties during the month of July was 550 BOE per month with an approximate value of $75,000
per week.
Investment Highlights

Inorganic growth strategy to boost growth

PLTG is aggressively acquiring drilling properties and related energy assets. The Company formed Wildcat En-
ergy Corp. in January 2008, with plans of acquiring more acreage across Kentucky. Wildcat has already acquired
more than 4,700 acres under various arrangements, with a potential of 70 oil/gas well locations. Ten wells have
already been drilled, four of which are fully completed and are producing oil and gas on a daily basis. These
wells have already posted robust revenues for the Company. PLTG’s past acquisitions, such as Appalachian En-
ergy Corporation in Tennessee, consist of approximately 50 well sites in the Devonian Shale formation. Studies
indicate proven reserves worth more than $60 million in these wells. The Rusty Basin prospect is about 1,600
acres with more than 10 well locations identified. According to third-party reports, the Company has acquired
proven producing and non-producing reserves estimated to be worth more than $300 million.

Technology acquisition complements production business

PLTG is focused on enhancing oil and gas recovery using cost-effective methods. In April 2008, the Company
acquired Enhanced Oil Recovery Technology from Utek Corp. The acquisition gives the Company an exclusive
worldwide license for a patented technology that uses an electrical submersible pump and a jet pump to sepa-
rate liquid and gas streams. This allows oil wells with a high gas content to recover the gas versus burning it
off. Through its Oil Recovery Technologies subsidiary, the Company purchased rights to a technology used for
paraffin build-up reduction and oil recovery. The Thermal Pulse Unit (TPU) provides a significantly lowered
cost basis per barrel for recovery of heavy oil and avoids the problems associated with CO2 flooding, steam
or dangerous open flame heating of oil on the surface. PLTG plans to deploy TPU technology and the recently
acquired combination technology in its own fields to enhance
production and reduce the production decline curve. It is
also exploring potential joint ventures to commercialize these
technologies.

Increasing energy demand creates opportunities for develop-


ing leased properties and unexplored areas

Industrial and technological developments have increased


the demand for energy resources, including oil and gas. Ac-
cording to the Energy Information Administration, average
U.S. oil consumption is projected to reach nearly 26.1 million
barrels per day by 2025. However, most existing oil fields are
mature, and production from these fields is declining. Hence,
there is an urgent need for exploration and development of
new properties and work-over of existing wells. PLTG is le-
veraging its resources by bringing various small energy companies together under one umbrella, with each busi-
ness run by a local management team compensated on a performance basis.

Platina Energy Group, Inc. ( OTCBB:PLGT) 2


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Soaring energy prices to support growth prospects

The Company has valued its reserves on a very conservative energy prices base of $70 per barrel oil and $6 per
MVF natural gas. Accordingly, the Company believes it can exceed its current revenue forecasts. Also, as produc-
tion increases and cash flow becomes more predictable, the Company plans to use sophisticated hedge strategies
to generate higher profits.

Oil & Gas Industry Outlook

The global oil and gas industry generated revenues exceeding $4.3 trillion in 2007 and has produced 17.7% annual
growth since 2003. Exploration and production represents about 40% of this market.

Increasing global energy demand

The U.S. Energy Information Administration (EIA) estimated global oil consumption in 2007 at 85.8 million bar-
rels per day. In the first six months of 2008, global consumption surged by 370,000 barrels per day from year-ago
levels.

Exhibit 1: World Oil Consumption

90
Million Barrel per Day

85

80

75

70
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Energy Information Administration

Population and economic growth in developing countries is expected to lift energy consumption from 462.7 qua-
drillion British thermal units (Btu) in 2005 to 694.7 quadrillion Btu by 2030.

Platina Energy Group, Inc. ( OTCBB:PLGT) 3


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Exhibit2: Global energy consumption

750
Quadrillion Btu

600

450

300

150

0
1990 1995 2000 2005 2010 2015 2020 2025 2030
Total Energy Consumption Oil Natural Gas

Source: Energy Information Administration

Petroleum consumption by the transportation sector continues to increase in the absence of suitable alternative
energy sources. By 2030, out of the total projected consumption increase, 57.9% will come from the transporta-
tion sector, and 31.4% will come from the industrial sector.

Exhibit 3: Break-up of world oil consumption by sector, 2005-2030

250

200
Quadrillion Btu

150

100

50

0
2005 2010 2015 2020 2025 2030

Transportation Industrial Residential Electricity Commercial

Source: Energy Information Administration

U.S. remains the largest energy consumer

The U.S. has a huge appetite for energy and spends more than $500 billion annually on energy costs. Average
domestic oil consumption (20.7 million barrels per day in 2007) represents about 23.9% of global consumption.
However, a weaker economy and higher oil prices are expected to reduce U.S. oil consumption by about 613,700

Platina Energy Group, Inc. ( OTCBB:PLGT) 4


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

barrels per day in 2008 and 76,200 barrels per day in 2009.

Exhibit 4: Break-up of global consumption by region in 2007

23.9% US
30.0%
Rest of North America (excluding US)

South & Central America

4.8% Europe & Eurasia

3.5% 6.4% Middle East

Africa
7.4%
Asia Pacific
24.0%
Source: BP Statistical Review 2008

Domestic natural gas consumption, on the other hand, is forecast to rise 2.7% this year and 2.2% in 2009. This
growth will come from the residential and commercial sectors in 2008 and the electric power sector in 2009. De-
spite higher prices in the first half of 2008, natural gas consumption by the industrial sector rose 3.7% year-over-
year. Consumption by the industrial sector is forecast to rise 1.6% in 2008 and 1.4% in 2009 while consumption for
electricity generation is predicted to increase 4.6% in 2009.

Dependence on oil imports

While U.S. oil consumption has risen, production has lagged, resulting in an increased dependence on oil imports.
U.S. oil production declined from 5.8 million barrels per day in 2000 to 5.1 million barrels per day in 2007. In con-
trast, domestic consumption increased to 20.7 million barrels per day from 19.7 million barrels per day over the
same period.

Platina Energy Group, Inc. ( OTCBB:PLGT) 5


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Exhibit 5: Production and Consumption of oil in the U.S. (2000-2009)

25
Million barrels per day

20

15

10

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Oil Production Oil Consumption

Source: Energy Information Administration

Natural gas production increased slightly to 55.21 billion cubic feet per day in 2007 from 55.18 billion cubic feet
per day in 2000, while domestic consumption declined marginally to 63.17 billion cubic feet per day in 2007 from
63.76 billion cubic feet per day in 2000. However, demand for natural gas continues to far exceed the domestic
supply.

Exhibit 6: Production and Consumption of natural gas in the U.S. (2000-2009)

70
Million barrels per day

65

60

55

50

45
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Natural gas Production Natural gas Consumption

Source: Energy Information Administration

Platina Energy Group, Inc. ( OTCBB:PLGT) 6


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

To fill the large supply/demand gap, the U.S. relies heavily on oil imports from the Gulf countries. In 2007, the U.S.
imported 4.9 million barrels of oil and 4.6 million cubic feet of natural gas. Any major new oil and gas discoveries
in the U.S. would be readily absorbed by the domestic market.

Supply/demand imbalance fuels price hikes

Crude oil prices are determined by global supply and demand. Recent price hikes are the result of consumption
growth in emerging markets such as China and India and a reduced supply outlook for non-OPEC countries. Sup-
ply disruptions and geopolitical tensions in countries such as Venezuela, Iraq, Iran and Nigeria are contributing
to price volatility.

Exhibit 7: Prices trends of crude and natural gas

12

$ per Thousand Cubic Feet


160

120 9
$ per barrel

80 6

40 3

0 0
2004 2005 2006 2007 2008e 2009e

Crude Oil Prices - West Texas Intermediate Spot Average (LHS)


Natural Gas - Henry Hub Spot (RHS)

Source: Energy Information Administration

Crude oil prices have increased sharply in 2008, surging from around $70 in 2007 to $100 per barrel in early 2008 to
$140 per barrel in June. West Texas Intermediate (WTI) crude oil prices, which averaged $72 per barrel in 2007, are
now projected to average $115 per barrel in 2008 and $126 per barrel in 2009. The overall outlook suggests rising
demand, tightening supplies and steadily higher oil and gas prices.
High prices encourage new exploration activity in the U.S.

Soaring oil prices are prompting new domestic exploration and re-development of existing wells across the United
States. Exhibit 8 below shows a steady increase in the number of gas and oil rigs working in the U.S. and increased
domestic drilling activity.

Platina Energy Group, Inc. ( OTCBB:PLGT) 7


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Exhibit 8: Working oil and gas rigs in the U.S.

2,000

1,600
Number of rings

1,200

800

400

May-07

Sep-08
Jan-08
Sep-06
Jan-06
Sep-00

May-01

May-05
May-03
Jan-00

Sep-02

Sep-04
Jan-02

Jan-04

Crude Oil Natural Gas

Source: Baker Hughes North American Rig Report

As of January 2008, 27% of the world’s fleet of drilling rigs was deployed in the U.S.

Exhibit 9: Rigs by region (Till January 2008)

20% USA
27%
North Sea

Middle East
4%
Far East
7%
West Africa

7% Mexico
15%
Brazil
10%
10% RoW

Source: Tenaris, Rig Logix

Worldwide, 134 new drilling rigs are scheduled for delivery between 2008 and 2010.

Platina Energy Group, Inc. ( OTCBB:PLGT) 8


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Exhibit 10: New rigs are scheduled to be delivered between 2008 and 2010

60

48 6
4

36 13 20

13
24
32 28 7
12
11
0
2008 2009 2010
Jackup Semisub Drillship

Source: Tenaris, Rig Logix

Platina Energy Group Structure

Exhibit 11: Platina Energy Group Structure

Platina Group Structure

Technology Lease on Oil


Acquisition Reserves

Enhanced Palo Duro


Oil Recovery Appalachian Wildcat Platina Rusty Creek,
Oil Recovery Basin
Technologies Energy Corp Energy Corp Energy Corp Wyoming
Technologies

Oil Recovery The Company 50 well sites on Whitley County Platina Energy During 2007, The Rusty
Technologies has purchased 1600 leased Field, Laurel Corp has made consultants Creek has
bought the Enhanced Oil acres. The County Field several were appointed 1,600 acres
proprietary rights Recovery reserves have and Clinton acquisitions by to ascertain the and currently
for distribution of Technologies, Inc a value of $ 60 County Field forming joint potential has one
Thermal Pulse from UTEK million on a PV together have ventures in reserve producing well
Technology i.e. Corporation on 10 basis an acreage of Kilgore, Texas holdings in the and one
TPU March 31, 2008. 4700 acres with and Oklahoma Palo Duro re-entry well
The reason for 70 potential and is Basin but the opportunity.
the acquisition well locations of producing oil data to date still There are
was Electrical which 10 wells and gas from remains additionally
submersible are already these wells. inconclusive. another 20
pumps "ESP" drilled drilling sites on
technology which successfully out the property for
is to extract oil of 4 are fully which the
out of onshore complete and Company is
and offshore producing oil evaluating
deep wells. daily. participation

Platina Energy Group, Inc. ( OTCBB:PLGT) Source: Company Website and Report 9
Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Subsidiaries

Oil Recovery Technologies

Oil Recovery Technologies is a wholly owned subsidiary which has acquired certain marketing rights to a pro-
prietary technology, the Thermal Pulse Unit (TPU) enhanced oil and gas recovery technology. TPU enables
enhanced recovery of heavy oil at a fraction of the cost of the current state-of-the-art technology. Two units are
deployed with positive results, working different types of tertiary recovery.
This German-inspired technology offers a cost-effective and eco-friendly solution for oil recovery and paraffin
buildup reduction. TPU utilizes pressurized nitrogen, which is highly effective in restoring formation pressure
and improving oil displacement and fluid flow, particularly in wells blocked by paraffin. TPU creates 350F+ heat
and 1500+psi pressures for well cleanup, stimulation and production using hydraulically-driven compressor
technology. The Company is exploring opportunities to form joint ventures for TPU, with potential partners
specializing in extraction technologies.

Appalachian Energy Corporation

In January, 2007, the Company acquired oil and gas leases to 55 drilling locations on approximately 1,600 acres
in the Devonian Black Shale formation located in the Appalachian Basin of East Tennessee and formed a wholly
owned subsidiary, Appalachian Energy Corporation. An independent report estimates the current discounted
value of proved reserve associated with this property to be more than $60 million. According to third-party fore-
casts, a 40-50 well program is likely to cost between $12 million and $15 million, and may generate gross produc-
tion at current prices of $35,000-$42,000 per month per well. Pipeline access and ample compressor capacity are
readily available.

Wildcat Energy Corp

On January 10, 2008, the Company formed Wildcat Energy Corp., which is managed by its CEO and president,
Joel Patton. It is headquartered in London, Kentucky. Wildcat has acquired leases located in Laurel and Whitley
counties of Kentucky. The Whitley County acreage consists of approximately 1,200 acres and has five wells, of
which two produce natural gas. The Laurel County field has acreage of 2,700 acres, with 70 potential well loca-
tions and 10 wells drilled successfully. Of these drilled wells, four are fully completed and producing oil and
gas. The Clinton County Field consists of 830 leased acres with one shut in gas well. The Company is conducting
engineering studies at this site.

Platina Exploration Corp.

In June 2007, PLTG formed Platina Exploration Corp., which has its headquarters in Dallas, Texas. Platina Ex-
ploration has acquired producing interests on multiple leases in Seminole County, Oklahoma, and prospects in
Young County, Texas. Through a joint venture with Buccaneer Energy, Platina Exploration has spent more than
$500,000 evaluating the potential acquisition of a producing asset with behind the pipe reserves.

Young County, Texas


The Young County, Texas prospect consists of 325 acres. This property has 20 wells with rework potential. Dur-
ing 2008, the Company drilled three additional wells on the property and identified 120 additional well loca-
tions. PLTG plans to expand its operations on this property on a well-by-well basis.

Platina Energy Group, Inc. ( OTCBB:PLGT) 10


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

The Palo Duro Basin

In February 2007, the Company acquired oil and gas lease options on a prospect consisting of more than 722 acres
in Texas. According to a Morgan Stanley report and a major trade journal, potential gas recovery associated with
the Palo Duro Basin could exceed the prolific Barnett Shale discovery. Platina management believes that the Palo
Duro Shale could be one of the largest natural gas deposits in North America. Platina has yet to drill wells on this
property.

Rusty Creek, Wyoming

The Company acquired an oil lease in Wyoming encompassing 1,860 acres. The producing well yielded 1,500 bar-
rels of oil per day for the first 90 days of 1997. However, the last 10 years have witnessed a steep decline in pro-
ductivity, with yields falling to only 300 barrels per month. There are 20 additional drilling sites on the property,
for which the Company is evaluating participation.

Exhibit 12: Company’s Developed, Undeveloped and Total Acreage

Program Developed Acreage Undeveloped Acreage Total Acreage

Gross Net Gross Net Gross Net

Texas - Young County 55 55 270 270 325 55


Texas - Palo Duro Basin 0 0 722 722 722 0
Oklahoma 180 60 220 90 400 60
Tennessee 160 160 1,440 1,440 1,600 160
Kentuky 446 446 2,284 2,284 2,730 446
Wyoming 242 63 1,618 421 1,860 63

Total 1,083 784 6,554 5,227 7,637 6,011

Source: Company Report

Platina Energy Group, Inc. ( OTCBB:PLGT) 11


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Business Strategy

Exhibit 13 : Business Strategy

Develop
Existing
Properties

Pursue
Deploy Local Attractive
Talent for Acquisitions
Assistance Business and Joint
Strategy Ventures

Cost
Reduction Minimize
through costs with th e
Economies help of
of Scale an d technology
Efficient e.g.: TPU
Operations & ESP

Source: Beacon Equity Research

Develop existing properties

The Company intends to create near-term reserve and production growth from a number of drilling locations
identified at existing acreage. PLTG plans to abstain from exploratory wells and focus instead on drilling wells
at already established fields. The execution of management’s strategy is subject to availability of funds.

Pursue attractive acquisitions and joint ventures

The Company plans to continue to acquire companies it believes can provide competitive advantages and in-
tends to pursue industry joint venture partners.

Cost reduction through economies of scale and efficient operations

Management expects the Company’s unit cost of production to decline as PLTG develops and expands produc-
tion from its existing properties. Unit costs will be reduced by utilizing the existing infrastructure over a larger
number of wells. PLTG plans to carefully control costs and the timing of its exploration, development and pro-
duction activities. It will also form joint venture to cut costs.

Platina Energy Group, Inc. ( OTCBB:PLGT) 12


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Use of cost-effective enhancement technology

The Company also plans to market its TPU-enhanced recovery technology to oil and gas property operators as
well as owners/leaseholders of stripper wells. PLTG plans to deploy TPUs in its own fields to enhance production
and reduce the production decline curve. It is also involved in discussions with other well operators regarding
potential on-site installations of trial TPUs.

The Company also has rights to inline electrical submersible pump and jet pumps. Electrical submersible pumps
(ESP) are often used to extract oil from onshore and offshore deep wells. PLTG acquired the rights to this technol-
ogy after it acquired Utek Corp. on March 31, 2008. The advantages of this technology include costs reductions,
reduction in power consumption, increased production, improved efficiencies and improved safety. Management
believes this technology will enable the Company to expand its area of operations in terms of profitable recovery
of oil and gas from wells, i.e. deep and/or high gas-to-liquid wells.

The Company has created a template for producing TPUs; components will be manufactured by several suppliers
and then assembled by PLTG at a central location. With this system in place, PLTG is expected to produce two
TPU units per day.

Competitive Analysis

PLTG competes with other independent exploration and production companies for acquisitions, financing and
other resources. Some of its domestic competitors are described below.

Aurora Oil and Gas Corporation

Aurora Oil and Gas Corp. is an independent energy company engaged in the exploration, exploitation and devel-
opment of unconventional natural gas reserves. The company has project areas in the Antrim Shale of Michigan
and New Albany Shale of southern Indiana and western Kentucky. The company focuses on shale plays where
large acreage blocks can be easily evaluated through a series of low-cost test wells. These shale plays are associat-
ed with relatively low drilling costs compared to conventional exploration and development plays. The Company
had proved reserves of approximately 166.6 billion cubic feet of natural gas at year-end 2007

Panhandle Oil and Gas Inc.

Panhandle Oil and Gas Inc. (formerly Panhandle Royalty Company) acquires and manages fee mineral acreage
and explores and develops oil and gas properties. It has mineral property reserves and other oil and gas interests
located in Oklahoma, New Mexico and Texas. The company does not operate any wells, rather it receives produc-
tion from several thousand small wells. As of September 30, 2007, the company’s principal properties included
254,692 net mineral acres in Oklahoma, New Mexico, Texas and nine other states.

The Meridian Resource Corporation (TMR)

The Meridian Resource Corporation, founded in 1985 and incorporated in 1990, locates, develops and produces
oil and natural gas. It uses 3-D seismic technology to locate reserves. The company owns interest in reserves lo-
cated in South Louisiana, the Texas Gulf Coast and the Gulf of Mexico. As of December 31, 2007, the company
owned interests in leases covering approximately 363,000 gross acres. It owned interest in 121 wells and had
proven reserves of approximately 90 billion cubic feet of natural gas equivalent.

Platina Energy Group, Inc. ( OTCBB:PLGT) 13


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

GMX Resources Inc. (GMX)


GMX Resources Inc., incorporated in 1998, acquires, explores for and develops crude oil and natural gas re-
sources in Texas, Louisiana and New Mexico. Oil production focuses on the Cotton Valley Sands in the Carthage,
North Field of Harrison and Panola counties of East Texas

Brigham Exploration Company (BEXP)

Brigham Exploration Company is an oil and natural gas exploration, development, and production company.
It uses 3-D seismic imaging and other technologies to explore and develop onshore oil and natural gas reserves
in the United States. The company owns property interests in the onshore Gulf Coast, including the Vicksburg
trend in Brooks County, Texas; the Frio trend in and around Matagorda County, Texas; and joint venture inter-
ests in southern Louisiana, the Rocky Mountains and West Texas.

As of December 31, 2007, it had estimated natural gas reserves of 140.2 billion cubic feet. Daily production last
year averaged 41.6 million cubic feet of natural gas equivalent.

Financial Analysis

Financial record

For the quarter ended June 2008, PLTG reported revenues of $0.05 million, which was equal to almost half of full-
year FY2007 annual revenues. Significant quarter-over-quarter revenue growth is anticipated in the second half
of 2008 and into 2009 as production gains are realized from the Company’s Kentucky projects. In the month of
July alone, oil and gas revenues from Kentucky production activities exceeded all of the Company’s production
revenues from the prior quarter.

Operating expenses during the June quarter were higher at $2.0 million and were up four-fold year-over-year.
Most of the increase was due to non-cash, stock-based compensation which caused general and administrative
expenses to rise substantially. Operating and net losses totaled approximately $2.0 million and $6.0 million, re-
spectively, for the quarter ended June 2008.

Exhibit 15 Selected financial data from income statement

Quarter ended Quarter ended Year ended Year ended


June 30, 2008 June 30, 2007 March 31, 2008 March 31, 2007

Revenue
$49,180 $7,200 $116,863 $18,200
Total Operating Expenses
$2,004,402 $480,921 $2,781,972 $664,468
Operating Profit / (Loss)
($1,955,222) ($473,721) ($2,665,109) ($646,268)
Net Interest Income/(Expense)
($585,150) ($21,391) ($568,045) ($195,577)
Net Income / (Loss)
($5,992,601) ($3,725,278) ($16,165,889) ($1,151,457)

Source: Company Reports, Pink Sheets

Platina Energy Group, Inc. ( OTCBB:PLGT) 14


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Liquidity and capital requirements

As of June 30, 2008, the Company has total assets of $11.7 million and a working capital deficit of $3.4 million.
Spending on development activities is budgeted at approximately $25 million over the next 12-to-18 months.
PLTG’s ability to implement its drill plan and acquire additional leaseholds will depend on securing additional
funding and/or forming joint ventures with other oil and gas operators. The Company plans to pursue debt fi-
nancing to fund its 2008/2009 business plan.

Exhibit 16: Selected financial data from balance sheet

June 30, 2008

Cash & cash equivalents $71,571


Net working capital ($3,390,419)
Total assets $11,165,375
Total current liabilities $5,262,602
Stock holders’ Equity (deficit) $1,898,126

Source: Company Reports, Pink Sheets

Revenue outlook

In the fiscal year ending April 2009, we expect PLTG’s revenues from oil and gas sales to exceed $2.5 million. We
assume a sales mix of 50/50 oil and gas, $90 per barrel oil prices and $7 per MCF gas prices. At $2.5 million in rev-
enues, we expect the Company to produce 60% gross margins. We estimate general and adminstrative spending
will range around $50,000 per month (excluding debt service) and anticipate the Company will reach operating
breakeven in FY2009. However, we think PLTG is likely several quarters away from recording net profits due to
greatly increased development spending in FY2009.

The Company already has proved reserves valued to exceed $60 million, many promising drilling prospects and
a low-risk development stratgy, so we expect PLTG to rapidly ramp up production in FY2010 and FY2011, result-
ing in exponential growth in oil and gas revenues over the next three years. We predict oil and gas revenues will
rise ten-fold in FY2010 to approximatley $25 million, double again in FY20100 to around $50 million in FY2011,
and jump 50% in FY2012 to approximately $75 million. We also expect gross profits to rise faster than sales as
economies of scale are realized on volume growth. Rising gross profits will drive growth in cash flow and enable
PLTG to self-fund its development program, commercialize its TPU and ESP-jet pump technologies, and acquire
additional leaseholds and reserves.

Platina Energy Group, Inc. ( OTCBB:PLGT) 15


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Our revenue estimates conservatively assume no licensing fees or sales of PLTG’s proprietary production en-
hancement technologies. The Company plans to deploy its TPU and ESP-jet pump technologies on its own
properties. If these technologies prove valuable for large scale drilling projects in the fileld, PLTG is likely to
attract many interested licensees and negotiate technology licensing arrangements potentially worth millions of
additional dollars.

Valuation analysis

Forward Price/Sales multiples for PLTG’s peer group of domestic, independent exploration and development
companies recently averaged around 2.7 times revenues. The peer companies also trade at 8.1 times forward
Price/Earnings multiples.

Platina Energy Group, Inc. ( OTCBB:PLGT) 16


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Exhibit 17: peer Group

Market PE P/S
Company Ticker Price /
Cap. $
Name Symbol (Share $)
million 2008 2009 2010 2008 2009 2010

Aurora Oil & AOG 0.08 8.53 NM NM NM 0.26 NA NA


Gas Corp.

GMX
Resources GMXR 36.67 685.16 17.71 17.71 8.94 5.22 3.30 2.57
Incorporation

Brigham
Exploration
Company BEXP 8.70 403.02 15.00 15.00 12.99 2.78 2.08 NA

Average for
the peer
group 10.24 10.24 5.98 2.75 2.69 2.57

Platina
Energy PLTG.OB 0.04 6.33
Group

Source: Reuters, Beacon Research

We think PLTG shares warrant a valuation comparable to its oil and gas industry peers. Although PLTG may
be considered somewhat higher risk due to its early development stage and need for additional financing, we
think the Company’s proprietary technologies will give PLTG a meaningful competitive advantage positioning
the Company for superior long-term growth. We discount our $25 million FY2010 revenue estimate, then multiply
the resulting amount by a 2.7 times forward Price/Sales multiple to derive our $0.30 price target. As a result, we
are initiating coverage of Platina Energy Group with a Speculative Buy rating and a $0.30 price target.

Achieving its production goals and/or successfully commercializing its production enhancement technologies
would position PLTG for sustainable, long-term revenues and EBITDA growth. However, the Company must
overcome many obstacles to achieve these goals; some of PLTG’s risk factors are described in the next section.

Platina Energy Group, Inc. ( OTCBB:PLGT) 17


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Risk Factors
Declining energy prices and competing technologies

The Company is exposed to risks associated with declines in oil and natural gas prices as well as technology
risk. The possibility exists that a competitor may introduce superior production enhancement technologies that
would reduce demand for TPU technology ESP- jet pump technology.

Long lead times for developing reserves increase risk

Developing oil and gas reserves often involves long lead times, significant expenditures and many uncertain-
ties. Natural occurrences such as water flooding could cause production costs to be substantially higher than
estimated. New environmental laws or other legislation could make developing the Company’s energy reserves
cost-prohibitive.

Investment risk

The Company must make significant investments to develop its oil and gas reserves. Although independent
reports suggest PLTG has significant proved reserves, there is no guarantee that these estimated are accurate or
that production can be developed in a timely and/or economic manner. Production from wells naturally declines
over time and the Company will be required to make ongoing investments in new properties and resources to
maintain its production profile.

Competition for resources

PLTG must compete with other exploration and production companies for property acquisitions, drilling re-
sources and development capital. Some of these competitors have significantly greater reserves and much better
access to capital. If prices for oil and gas leaseholds continue to rise, PLTG may find it more difficult to fund
property acquisitions.

Platina Energy Group, Inc. ( OTCBB:PLGT) 18


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

Management Team

Blair Merriam Mr. Merriam has been PLTG’s president and CEO since the Company’s inception. Prior to that, Mr. Mer-
riam was a director and shareholder of a privately held claim contract company that offered third-party
President and CEO services relating to insurance adjustment, including services related to natural resources. From 1999 to
2005, Mr. Merriam served as an oil and gas business consultant.

Dan Thornton Mr. Thornton has served as a director and the Company’s vice president of business development secretary
since PLTG’s inception. Mr. Thornton has been a director and shareholder of Torii Medical since 2005.
Vice-President and
Secretary

Mr. Jack has been a director of the Company since March 2008. From December 2006 through March 2008,
James E. Jack Mr. Jack served as the managing director of the Baron Group USA LLC, an international investment bank-
Director ing firm based in Hong Kong that provides strategic consulting and banking services to large and mid-cap
companies in Asia and North America. In June 2006, Mr. Jack formed J. E. Jack & Partners LLC, a financial
advisory and consulting firm. He continues to serve as a principal. From late 2003 to June 2006, he served
as a principal in PentaCap LLC, another financial advisory and consulting firm. From May 2001 to the
summer of 2003, Mr. Jack served as CFO and executive vice president of Medallion Financial Corp., a pub-
licly traded company. Mr. Jack received a BBA in accounting from the University of Notre Dame, an MBA
from the Edwin L. Cox School of Business at Southern Methodist University, and an honorary Doctor of
Law degree from St. Mary’s College in Notre Dame, Indiana.

Platina Energy Group, Inc. ( OTCBB:PLGT) 19


Analyst: Lisa Springer, CFA
Initial Report
October 15th, 2008

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I, Lisa Springer, CFA, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the content and securities included in
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Lisa Springer, MBA, CFA - Senior Analyst Lisa serves Beacon Research Partners as a research analyst. She brings to the company over 15 years experience in equity research and
investment marketing. Prior to joining Beacon, Lisa worked as an equity analyst for an independent research provider. She has also held positions as investor relations officer for a
NYSE-listed company and director of financial analysis for a large consulting firm. Lisa earned an MBA from the University of Chicago and is a Chartered Financial Analyst (CFA).

Platina Energy Group, Inc. ( OTCBB:PLGT) 20