RE: Oversold @ $1.45????
What I like:
1. B.V. is $1.79 This is unusual for an O+G stock and in the absence of any snafus indicates value.
2. 10% NAV is $2.65 Again this indicates value although with the recent reserve reduction and the tendency to a high gas and oil price in these calculations perhaps a more conservative NAV would be $1.90.
3. I like the large land position which in turn offers us many prospective drilling locations.
4. I like the variety of plays from High impact at SARCEE and WHISKEY to coal bed methane at HOEBEMA to bread and butter at GIFT LAKE.
5. I like the potential for a quick increase in production. Their behind pipe stuff plus a good well a EARRING or KISKATINAW could quickly increase production from current 1,000 BOE to 2,000 BOE before too long.
6. Doing rough calculations for several companies indicates CTT is priced cheaply compared to other companies.
What I don't like:
1. Production has been very slow in building and hasn't met expectations.
2. They have not yet hit a big well. ( maybe EARRING will do? )
3. Drilling has been reduced due to high cost of services. I realize this may be wise in the longer run but it reduces immediate hopes.
4. In general I dislike like the fact that oil inventories and gas pipelines are very full. This well may be a harbinger of even better value showing up in the near term. (i.e. lower stock prices)
5. This also poses difficulties in bringing new production on line which also means lower stock prices.
6. Until production reaches a much higher level their expense components will remain high and we will also be left with the vagueries of small company economics.
Overall I favour CTT at these prices but a large position is still too risky for me.