RE:RE:RE:RE:RE:RE:RE:RE:RE:BNN TodayI don't think anybody here needs BNN or 854 or anyone else telling us there is downside risk here. Its been said on this board many times by me and others that AOI is trading way over its head at these levels on the speculation that its going to keep getting bigger. The way I see it downside risks are i) exploration risk; and ii) political/security risk of bringing oil to a point of sale.
Analysts on BNN obviously can't recommend stocks like AOI that don't have a single drop of production and face these potential risks. However, the exploration risks seem to be diminishing rapidly with every successful well. Individual prospects may have a significant risk but hitting a series of good wells with the early drilling bodes well for the basin, and those who are long here are willing to take the odds. Those who need the comfort of a 5x cashflow multiple and a steady 10% growth/yr are not. The political/security risks are what companies like this deal with around the world on a daily basis - sometimes it bites you badly and sometimes it doesn't. Good risk management practices, like good social programs and selling down the development to a major, can often mitigate these risks successfully but they'll always be lurking. BNN and 854, this is not news to us.