RE: RE: $1.65 $1.40 CNE = STRONG BUYSIt's simply anticipation of RH13. Friday's action was not a short cover, as Two R suggested, neither was yesterday's gap up to 66 at the close.
The test results should be pretty decent, but history has shown us - going all the way back to Dec of last year, that the market no longer really cares about Rancho results. This would be understandable if the reserve replacement ratio was below 100% (more wells = more production, but the cost is a quick burn rate of what's left in the field) - but it's not. The ratio is 100%+, and as long as it can be maintained, by proving more, or finding new reservoirs in the field, then positive RH results would logically lead to a higher SP. However, as I mentioned, 2012 was a bit of a stinker for juniors and until that stigma wears off - i.e. American/Chinese growth outstrips the fear from a Euro-failure, then CNE will probably stagnate over the next few months (barring further success in some of Carro's acquired fields). Risk is weighed heavily against CNE - and that is the reason we've seen such a drastic decline in the SP. I used to beleive it was manipulation, but I think I was missing the bigger picture - an overall loss of appetite for high-risk, high-reward plays. There are quite a few companies out there that are trading below their cash value - but they all share the same "risky" charecteristic.