Reason for lack ho-hum price bump...I must admit that I too am a little disappointed with BUK's price thus far today (basically slammed right out of the chute), but as always I suspect we will see a nice rebound towards the end of day as we have seen in the past with this company. As for the reason for our "spinning our wheels" it should be pretty obvious to everyone. When Bridge did a 44.5 million share issue and offers a FULL warrant excercizable at 95 cents we have a lot of cheap paper to chew through. However, even with that kind of dilution we should be trading well beyond present levels...its only a matter of time though as value will be realized
Bridge states that they are going to be producing October 1...Gas differentials put Nat Gas at a significant premium to North American prices..Hence, a number of people I have spoke with think that Bridge has a pretty decent chance at producing cashflows for 2009 in the $130-$150 million range...or approximately $1/share. Realizing that we are not producing a long term asset our cashflow multiples will be lower...IMO trading 2 times 09' cashflow is pretty conservative...or $2/share.
Complement Bridges Durango achievements with the speculative premium that it should receive when it drills North Piper in July and I can easily see the potential of another 50 cents to a $1on top of that...(Remember the North Piper target is absolutely massive...potential is north of 500 million barrels)
Time will tell...
Cheers
T2