GREY:ROAOF - Post by User
Post by
Karmanowon Feb 02, 2009 2:31pm
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Post# 15745941
Risk-Reward
Risk-Rewardtime to assess the facts and decide....
...It has been positive to see the Sunday Herald and the Upstream print articles about OILEXCO and comment on the company and its future. IMO the outstanding issue regarding the real value of ONSL lays with Huntington.
Toby Pierce states, "there is uncertainty about the value of huntington"
and Al Stanton states, "it was difficult to be accurate about the size of Huntington but IT WAS LIKELY TO BE HIGHER THAN SOME PESSIMISTS BELIEVE"
Huntington accounts for almost half of the non producing assets of ONSL and the Wellington Report estimated that there was @ 65.7(MMBOE) (40% Oilexco share) and they valued this asset in a range of $3-$5 per barrel.
I do not believe that during the due dilligence process that geologists or others will be given too much opportunity to evaluate with further exploration and thus we will have to depend on the drilling results to date.
I am not concerned about the listing on the TSE, I am more concerned about the Pending Inventory Report as this will be a big part of the due dilligence of any company looking at a price in the 2nd round of bidders.
IMO the larger picture is all about the SALE of ONSL and the rest is day to day stuff and fear mongering.
Oilexco's assets are not small potatoes for the North Sea and getting in with oil prices low with a good chance of them going higher is a very good opportunity for a large player. If I were a prospective buyer I would want to keep the long term debt with the good interest rates if I could. I would also want to keep the better contracts in place as any buyer is not going sit idle they will want to move forward and produce the oil. Oh and by the way, some of the oil is being sold at a premium to Brent becasue it is of higher quality.
Anyone who can repost the Wellington Report for new readers, greatly appreciated in advance, zdat posted a couple of weeks ago.
Good Luck to those who have shares in Oilexco, and imo the risk reward ratio is very much in our favor !!
Karma