LGX Oil + Gas Inc ROAOF

RE:RE:RE:RE:RE:Concerned

[zagorske]

           When the market turns negative there is no shortage of things to worry about. It is very easy to give credence to conspiracy theories, management incompetance, and doomsday scenarios. How can any company survive on $50 oil? Low oil prices and Sage-Grouse has wiped out the $47 million we paid for Manyberries. How can money be raised to drill what will be money losing wells at $50 oil?                                                                                                                                                    
                                                                                                                   
           But what energy company doesnot have massive worries in today's temporary environment?                                                                                                                                              
           If a farm gets no rain in a summer is it worth zero? If a grocery store's sales are poor for a quarter is it worth zero?                                                                                                        
                                                                                                                                     
          With gas prices at $2.70 think of the challenge presented to companies like CR, PPY and others who have tied their future to the prospects of being able to sell their gas overseas at a fair profit needing about $8.00 to $9.00.                                                                                              
                                                                                                                     
          The fact is that pretty much any junior or midcap energy company is not a viable business at current oil and gas prices. I think a rally will come in oil prices long before a rally will come in gas prices and fortunately we are skewed to the oil side with LGX.                                          
                                                                                                           
          Maybe Sage-Grouse will be a blessing in disguise if we are well compensated for the disruption in operations at Manyberries.                                                                                        
                                                                                                                         
          It is not that much of a stretch to see how we can get a reprieve in drilling obligations due to low oil prices. i.e. Who else would drill on unfamiliar lands at these oil prices?                    
                                                                                                                                     
          Chase away the dark clouds and consider what we have under normal business conditions. Manyberries is an asset that is worth about $55 million, land rights that are worth approximately $500 per acre on 100,000 acres. (We all have seen many instances where land has auctioned off at thousands per acre or at least several hundred per acre.) We also have wells that have been drilled and are producing now and for many years into the future.              
                                                                                                                                               
          Give management and key shareholders a chance. They will not allow an asset worth $125 million on a long term basis, go to zero for want of a few short term dollars.                      
                                                                                                                               
          They will act in the best interests of shareholders.                                                                
                                                                                                                     
          The heavy hangover of shars for sale at 13 or 14 cents may soon panic and give us a 5 cent opportunity.