RE: "No News Is Bad News" At PetrobakkenExcellent post when2buy. I offer the following comments.
First, the company has implemented one of your recommendations and stopped all share buy backs in December, 2010. This was announced in the last CC if I recall correctly.
I also agree with your comments and that of one of the analyst’s on the CC that the company needs to do a much better job of managing their inventory of drilled but uncompleted/tied-in wells. When Gregg suggested that they would bring the level down to a more 'normal' level; the analyst communicated in as strongly a manner as one could that the company needs to deal with this. By always having an inventory of 10+ wells sitting around waiting for completion you essentially tie up $XX million in capital generating no revenue year round. In the last CC they talked about the same thing - steps they were taking to reduce it to a more "normal" level. For any company, but especially one with such a high debt level you would hope they would be looking at deploying every dollar efficiently. Let’s see if they listen to the analyst’s advice or can provide some rationale why they need to have such a large 'normal' inventory.
This is a company with some excellent assets, but their high debt level puts them (and us) at risk if they run into unforeseen operational problems or the price of oil tanks. I am in the camp that they should look at selling some assets to reduce debt - this will hurt long term potential but would make the company a less risky one. High debt is what sunk Oilexco.
Long term I believe this company should do well, but there could be trouble over the next year if the company runs into operational issues and is unable to deliver on their production guidance or the price of oil tanks. When the one analyst suggested that the top end range of 49,000 was likely not achievable, Gregg did say that it is possible, but it did not come across to me that he had a high degree of confidence in the number.
I was dissappointed that Mr. Wright was a no show w/o an explanation. On a positive note, company management and directors have made some significant personal purchases of stock so are motivated to deliver.
I think we could be in for a rough ride.
John