My Thoughts!I am still in thi sgame and actually loaded more at 39 cents yesterday. Plan to continue acquiring at prices between 30 and 40 cents.
What most losers on this board don't realize is that in assessing the viability of an oil field, one also needs to consider the producibility & potential flow rate from the field. You can have billions of reserve but if you can't flow it easily and be cashflow positive, it might be capital intensive to produce. A good example is the problem that Nexen and OPTI are facing at LongLake.
The historical well drilled in Chia indicates 40 API good quality low sulphur oil that flowed 5000 bopd over 18 m interval. So, if we could have similar flow rate, it would be a big hit because we cound comingle several intervals and flow more than 10,000 bopd.
The next important news that would move the stock between now and June is the finalization of the PSC contract by Bagdad. Once there is clarity that the PSC would be honored, we will likely get a boost. if the PSC is approved, it would have a big effect on share price as 100 million barrels in KRG would have an earning that is equivalent to 2 billion barrels (net at 40% WI) of oil in Bagdad where there is service contract of $1.8 average per barrel with no upside on increasing oil price. I hope to believe that recent statement by Iraqi PM is true notwithstanding the opposite veiw by Hussein Sharistan.
Also, sucess in ongoing by SNM, VST & Sterling & GKP will also aid.
As the status of the PSC get resolved, I see a rush of takeover in KRG by the big players that have ignored the region. Big players like Shell, BP, Exxon, Chevron will be on a buying spree. Even VST partner NIKO that currently has a good working relationship with VST and LFD management can takeover LFD if they hit.
My year end target price for LFD before December 31 are as follows:
- 10 cents if they hit dry well and PSC annulled or cancelled
- $3 if they hit jeribe in both wells and flowed 5000 bopd and PSC approved
-$5 if they hit Jeribe in both wells and flowed 10,000 bopd and PSC approved
-$10 if they hit Jeribe in both wells and flowed 20,000 bopd comingled and PSC approved
For now, based onmy research till date, I am LONG and highly think that LFD would be successful in discovering oil in KRG, conditional that management & GENEL Energy have been telling the truth regading C7.