Well, then let me be the first to give the
stock a good bashing. Well, not really a bashing, but a good prediction based on the truth of the situation here. You now own shares of a company with 61 million shares outstanding, about $12 million in the bank, maybe and some offshore blocks in Namibia. The onshore blocks are for coalbed methane and will be slow to develop, it is the offshore blocks that are creating the excitement.
BUT don't get to excited, first there is the 3D siesmic which is expected to cost $25 million dollars of which Azimuth is paying 40% or $10 million. So that leaves EOG to pay $15 million, so there goes the current cash. So they will have to raise funds for administration and other expenses, hence dilution. Now the big problem, offshore wells are expensive, not just expensive actually very very expensive. And right now EOG has a 70% interest. Maybe they find a partner and get the partner to pay some of the cost, but that means dilution of their percentage interest in the Block and no matter what, they will have to raise funds, experience all sorts of delays, market downturns, etc.. Just take a look at OYL and you will see EOG's future. Drilling is likely years and big dilution away. Not that money will not be made, but this is not the time to buy shares, the time to buy will be a couple of years from now when they have raised the drilling money and the rig has been contracted for. And even then care will have to be taken to pay attention to the chance of hitting oil.
Do any of you know the chance of success on that first well? I do, and it is not pretty, but just as holders of ROZ ignored my warnings last year and saw the first well miss (5% chance of success, known by those who did their research) and the price go from $3 to 10 cents, so to will you buyers. If you do not know the chance of success right now, how could you buy shares? Just my comments, I will be back in 2 or 3 years when it is actually a good time to buy and the shares are likely considerably cheaper, certainly not more expensive and a lot safer to buy as drilling will be on the horizon.
Hope you feel better now that there is a basher.