Hi. Following the news on the forced warrants, I was pondering the importance of luck. Obviously we need some luck in exploration, but that's something the company can address to an extent--using good geology, seismic and so forth. However, there are exogenous factors about which the company can do nothing. For example, I'd argue that DME have been a bit unlucky of late with the slowness of the AOGCC's permitting process (staffing issues at the AOGCC, apparently), and the fact that the rig for well 4 broke down before they started drilling (it seems it's working fine now, thankfully).
But DME have been very, very lucky with the timing of this forced warrants, notably in relation to the exchange rate. The company has just raised almost C$16m, but of course the vast majority of their costs are actually in US$ (as it drills in the US, is building its production facility in the US, has several staff in the US etc). As a result, they are exposed to a great extent to the vagaries of the foreign exchange markets. And at the moment it's very favorable.
Presently the Canadian dollar is close to six-year highs against the US$. A year ago a Canadian dollar would get you 76 US cents; now it gets you more like 83 US cents. When it comes to the C$16m that DME just raised, it mean their money will get US$1.4m more now than it would have a year ago. That's a sum equivalent to three exploration wells! Of course firms can hedge and so forth, but with so much investment needed in the very short term, they need to exchange their Canadian dollars for US dollars very soon, so the timing is a major stroke of luck.
Stay lucky!
bertie