August 29, 2019

VLE 6M Target: $15 -$23 CDN
 
This is not investment advice
 
Our target for the next 6 months to the end of February 2020 is in the range $15 to $23 CDN.
  1. Our earlier analysis showed that we have broken out of an extended ending diagonal and a year long corrective wave.
  2. In our estimation we are now in a third Elliott Wave up. This normally runs in the range of 1.6x to 2.6x wave 1.
  3. Wave 1 was approximately $8.00. We expect the third wave to run 1.6x$8 to 2.6x$8 or $13 to $21 range.
  4. From a starting point of approximate current price of $2 we have an approximate range of $15 ($13+$2) to $23 ($21+2) VLE share price.
  5. The fundamentals support this potential valuation (10tcf unrisked resource, testing of promising zones, additional drilling, potential drilling in neighboring lands, potential secondary offering and marketing of the play )
  6. At a $20 VLE share price the overall play is valued at approximately $6 billion, which is a reasonable valuation with the information that is available right now.
  7. Downside risk remains to below the $2.00 level.
  8. As the trading volumes for VLE shares remain low we are likely to see high volatility.
AP