Share issue, too bad Looks like another 8 million shares coming out at a not great price, I don't care for that too much. On the other hand it is prudent; I've had shares in companies that piled on the debt and drove the company into the ground.
Forecast capex for 1H 2012 is 8 million; if they raise $2.5 million and cash flow, what, 300k/month? on the 500 b/d, that gives $1.8 million in 1H 2012 cash flow. So the would need to rack up over $3 million of debt, less whatever working capital they have now towards that total.
So, as of June, let's say the 8 million gets them 3 wells (maybe 2 HZ and a vertical?). If they work then production could be, who knows but let's say stabilized at 800-1000 b/d. They'd be then maybe 60% oil. With 60 million shares o/s, 150 sections (or whatever) land and $3 million debt - what would the company be worth? At $50k/flowing boe (though I hate that metric) they'd be over 70 cents/share. I guess the real value would be the bbls added to reserves if the wells hit the forecast type curves. And I have no idea where they get type curves like that if they are saying they are the only ones to drill Ostracod HZs...
As always, everything hinges on the next few wells. They are HUGE for a company this size.. Either way, by late summer, ONL should be worth a lot more or a lot less than 30 cents/share. Here's to gamblin'! Actually I think the odds are stacked in the investors favour at <30 cents/share. That is a tiny market cap for 500 b/d, great land spread (I hope) and no debt (at present). Could be the find of the year. Here's hopin'.