The Party Has Just Begun!I agree mapleleaf, the stock's biggest gains are ahead of it at this point.
From the old press releases together with some rumblings I've been hearing, they are going to get some highly regarded petroleum engineering firm to profer an estimate of a quarter TCF of gas gross in this acreage.
So lets do the math: 250 BCF x 85% NRI x 50% W.I. x US$2/mcf value of the gas in the ground x 1.5 fx rate, divided by 15 M shares out equals north of C$20 a share value. Does anyone know how many warrants and options are out? That would of course reduce this figure.
Best part about this is that all the terms of the lease appear to be consistent with industry standards and the BPR's interest in the lease is thus easily subject to further farmout by BPR, to some major oil corporation for example. The only thing that troubles me a bit is that the term is for only 5 years. I believe that a lot of coalbed methane wells produce for many years more than 5.
This is now set up for a classic Canadian hype play. All the usual suspects (Maedel, Fraser, etc.) will likely gang up and start hyping the hell out of this thing, creating the other side of their trade. There no longer is any competition for "Greed Dollars" from the tech stocks. By Greed Dollars I mean money that is chasing after the stocks with huge upside. So the only place that Greed Dollars can go now is resource stocks. With the overall market crashing I believe there will be even more Greed Dollars out there, from the poor slobs that have taken a licking in the techs and are now looking for a quick way to earn the losses back.
This is a golden opportunity to buy at this time, being after the news is out but before the hype show has started.
I am disappointed that I have no dry powder left to buy any more of this stock at this time. I had planned to do this but the money has been blown meeting margin calls.