Strategic Oil and Gas Ltd SOGFF

What does the future looks like for SOG?

[jerrybe]

Hindsight is a wonderful thing. I realize now I was way too eager to build a position in this small E&P player. Lost 50% of my investment in no time. The question is: Will they rebound?

On the plus column: 

1. Quality rocks

2. Very strong financial backing 

3. Infrastructure in place 

On the negative column:

1. $34M in debt (not that much but they do need to improve FFO)

2. Operating netback of $25 for Q3 2014

3. Marginal player in terms of size

All in all. Well, it is a mixed bag. The fact that they have strong backing has allowed them to issue a lot of new shares. Massive dilution but drilling capex is secured for the next year. Minimal investment in infrastructure. They are at the "drilling factory" stage. So operating netbacks would improve as production increases. However, just as they face this uptick in production, they now face significantly lower prices. They have hedges in place but it will only help that much. I think they need to show careful consistent production performance and probably slow down some of the capex planned. It is going to be a rough patch for a while. I would say probably dead money for a year. GLTA!