RE:RE:RE:RE:New Stratus Energy Announces an Operations UpdateStiff, yes an operating agreement type of model. The companies that operate a field get paid on barrels produced. There's very little risk that the recoverable reserves are not there. So they won't be needing to risk money finding reserves. So their operating margins (operating income minus operating expenses) will be determined by their operating cost per barrel and selling price on existing reserves. I expect that their operating costs per barrel to be very low maybe even close to single digit cost per barrel. So as long as the operating agreement is viable over the long term then NSE stands to earn billions over the next couple of decades.
Of course as income flows in, they can scale up their operations. So the risk here is more country risk then anything else. It's no doubt trading at a steep discount because of that. Once country risk abates then the sp will increase maybe even fetch a premium but right now it's a speculative stock. A lot of investors have spec stocks in their portfolios. This is one of the most promising ones becsuse there's no dry holes exploration risk. The recoverable oil has already been discovered.