The train is leaving, What is your Stop?Several posters now believe that the train is leaving because a NR is eminent. I also believe that a NR is in the works but feel that what may be announced at this time may still fall short of what we would like to know. My advice would be that the train may leave this week but don’t anticipate an express train.
I suspect that the Polish Oil and Gas Company deal involving ONLY the Carpathian oil and gas concession may be announced with a notation that Regent is going to exercise the option to acquire an additional 6% of McCallan and will agree to the immediate release of 11.7 million shares once financing of one concession is demonstrated.
I still hear rumors that the financing announcement for the Carpathian may be delayed because McCallan has still not decided the best financing option and/or that the financing arrangement can not be announced by Regent until an oil and gas Director is selected for the Board and the exchange notified. An announcement naming Polish Oil and Gas as a partner is fantastic and I am not worried about financing except that without a financing announcement, the train will leave the station but only SLOWLY. The next stop may be .50 per share and with a financing announcement, maybe a $1.00 and with a drilling announcement maybe $1.50.
Some shareholders may decide to get off the train at $1.00 or $1.50 if the oil and gas expertise in Regent and their overall management doesn’t appear solid. Followed to the end of the line, the Carpathian train may be a $9.00 a share stop assuming 400-600 MB oil and/or oil equivalent and 120 million shares of Regent diluted. But we are just talking about the Carpathian concession and the Polish Oil and Gas deal.
The second group of concessions, the Silesian Basin, is probably outside the new NR and is more interesting to me. However, this concession also seems to be outside the deal with Polish Oil and Gas. CBM is much easier, quicker and less expensive to drill and as other posters have mentioned, the property already has 3-4 previous wells that have been capped. Additionally, the resource estimate goes as high as 2.9 trillion cubic feet and $3/mcfg US profit. Under these parameters, the 40,000-acre concession is worth $8.8 billion in profit which is twice the value of the Carpathian.
I have not been able to verify the percentage the Polish government will take on the deal for the leases on the concession. Previously, this percentage was 30% but I understand that part of the trip to Europe was to reaffirm and/or renegotiate lease percentages on all concessions, this was done and resolved any previous legal uncertainties about the transferability of the concession rights to McCallan.
I also understand that options for financing the CBM are still under negotiation. Assuming 120,000 million shares diluted, $8.8 billion in profit, a conservative estimate of Regent’s percentage, 25.5%, a 15year life, and a P/E ratio of 15, the end of the line is potentially an $18.00 stop and this estimate does not include the value of the coal.
The interesting question for us to consider now that the train may move out of the station is where we will decide to get off? Many of the smaller and more nervous investors and those burnt by the previous pump and dump will probably be gone at $1.00-$1.50 a share. Not me however and probably not the large players. We know what this stock should be worth. Additionally, until the volume increases to 1.5M-2M shares traded per day the large shareholders will not be able to unload without dropping the price significantly. I do not believe we will see large volumes hsppening at $1.00 or $1.50.
Nobody can really call price and timing but for the record, I will be very happy if the price exceeds $1.50 by the end of the year. I also think that the end of the line could be $27.00 a share if you combine concessions but I will not be here for that event. I will not be able to decide by stop until all the financing and mangement are in place and I suspect that that situatin will not occur until the share price is over a $1.00. Given all the uncertainties do your own DD?
Other opinions?