Discussion pointsPoint 1:
The July/August drilling is targeting 260B CF in the Clarinete (VIM 5) area where the previous 140B CF was discovered. IF CNE’s drilling is successful, the NPV for their assets would exceed $1B USD. The new discovery alone would net $228 USD in the open market assuming a price paid of $5 BOE (that’s equal to their market cap today). This is a huge event and should be on everyone’s radar.
Point 2:
CNE has 83MM cf/d under contract starting in DEC with guaranteed pricing not tied to the global oil markets. The average sale price is $5.50 USD while the cost to produce is ~.50c. The cash flow from gas alone will be around $150-175M per year and has the ability to grow from there. The discoveries have been made and contracts in place. If there are any delays on the pipeline construction, Promigas will pay CNE as if the gas line is ready.
Point 3:
The 27 million convertible is why the stock has been weak as of recent. There are 10+ million shares being issued and the debt holds are looking to hedge their position. There is a high chance these shareholders are shorting the stock going into the issuance.
Let’s discuss these points and make this an intelligent board again. GLTA