Where can you get 3,700 Boe/d for this price?
in 4 months, or 120 days from now, this company will be producing 3,700 boe/d with 50% liquids. Lets call it 4,000 which is easily achievable in early 2014. So if we valued this at $80,000 per flowing barrel ... being conservative ... you get a value of $320 million. So lets put down 95m for debentures, and say 15m for bank debt (being conservative), for a total of 110m. That leaves 210m for equity, and with 175m shares outstanding, that leaves $1.20 a share for equity holders. Now this excludes the value of the tax pools. We are trading at .28c. This should lead you to the obvious reason we are seeing so much buying, and why this was one great press release. Once over 4,000 boe/d, we are likely to see a takeover for the company, which is why the debentures are irrelevant to management, they know getting to 4,000 boe/d is where value is created rather than paying the lenders. This could/ will be the top performing stock in 2014. (cliff will be happy, and selling out early too)