Steamboat Springs — Routt County’s biggest little multinational company has grown by thousands of barrels this year.

Teton Petroleum Company announced this week that it has raised $4.4 million in new capital that will allow it to drill more wells in its Siberian oil field.

The company was pumping 600 barrels per day in early 2001 and increased production to 2,800 barrels of oil a day in January 2002.

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Today that number stands at 6,000 barrels a day and is heading upward.

New wells are averaging 500 barrels per day, three times higher than the average flow rate for new wells in Western Siberia, according to one industry analyst.

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Teton president and chairman Howard Cooper bases his publicly traded company in Steamboat Springs, but for five years has operated exclusively in a Siberian oil field.

“We’re basically playing a niche in Russia by acquiring small fields that larger companies aren’t interested in,” Cooper said.

Teton has a Russian partner that invests 50/50 with its American counterparts in drilling new wells. And the company has completed its own 40-kilometer pipeline that allows it to tap into a larger Russian pipeline that delivers oil to Germany.

Teton is currently drilling two new wells and may undertake a third yet this year.

Cooper’s company trades on the Over the Counter Bulletin Board, but he’ll soon make application to the American Exchange. On Friday, Teton’s shares (listed at OTCBB: TTPT) were trading at 34 cents a share. That’s down from an early high

this year of more than 50 cents a share, but still up more than 50 percent from the 20 cents per share price at the beginning of the year.

Cooper is convinced his company is undervalued based on the proven oil reserves to which it has license.

“We own more than 40 million barrels proven and another 40 million barrels probable,” Cooper said.

“If you analyze that from a pure financial standpoint, we’re significantly undervalued.”

Cooper said the company’s market capitalization of about $15 million values its oil reserves at less than 50 cents a barrel even as it exports its oil for $25 a barrel, and gets paid in U.S. currency.

Alexander Blokhin, an analyst with CentreInvest Group, supported Cooper’s conclusion in a written report this summer, when he rated the stock a “buy.”

“We believe that Teton is strongly undervalued not only in view of its estimated cash flows but also in comparison to its Russian peers,” Blokhin wrote. “Over the past two years, Russian oil companies have been buying license to develop new untapped oil fields for 14 to 21 cents per barrel of proven and probable reserves.

“Teton is at the lower end of this price range despite the fact that the company already produces oil and is increasing its rate of production.”

Chuck Strain, an analyst for Torch Capital Group said Teton’s five-year track record and its partnership with a Russian firm distinguish it from other foreign companies attempting to operate in Russia.

Cooper said many people view drilling for oil in Russia to be risky.

But he believes it’s less risky than drilling for oil in Texas. His well field in Siberia had been drilled by the Russian government in the 1980s and despite proving itself, was closed in before it ever went into serious production.

“Currently in the U.S., it’s very expensive to acquire oil fields,” he said.

“It costs about $5 per barrel in the ground. In Russia, you’re able to acquire these fields for about 20 cents a barrel. Worldwide, your biggest risk is drilling wells. In Russia, you do not have drilling risk.

The biggest risk early on was political. Now, Russia is a very stable area.

It’s a very good partner of the U.S. and Europe.

Russia has joined NATO and is in the process of joining the European community.”

Further, Russia’s stock market has been among the strongest in the world the last two years, Cooper said.

Despite the success Teton is meeting, it would be wrong to assume Cooper’s company is growing as rapidly as it can. Teton is currently debt free, Cooper said, and he wants to carefully manage the pace at which he explores new fields.

First, he wants to develop the cash flow potential of his existing field.

To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com