Caza Oil & Gas Inc. CAZFF

Be Cautious - News Out

[ROIcrusader]

I would HIGHLY recommend anyone considering purchasing this stock read the most recent news releases and pay heed to the 'postpone developing' comment considering the company raised cash for 'ongoing operations' ... multi layer fracked wells deplete quickly, as in, if after 90 days, production is 20% of initial production, your're doing great:

Marathon Road and East Marathon Road are held by production (HBP) with no further drilling obligations. Each property has significant development upside across as many as six stacked pay zones. Although management expects these properties to be economic even in the current oil price environment, with no further drilling obligations the Company will postpone developing them further until oil prices recover and/or operational costs come down enough to justify drilling.

The company is producing around 1000-1500 boepd with an approximate (based on their previous NR from Nov 2014)  net back of $32x1500boepd = 17m revenue ... and this is going to DECREASE significantly as drilling stops.Not to mention, 1500 boepd is VERY generous.

42m financed at 12% = 4.92m/year in interest costs

Oil IS NOT headed to $65 any time soon. If it was, I'd be looking at this name again.

GLTA but adding on weakness is a formula to lose your hard earned cash. There are PLENTY of other names in the market outside the oil industry where you could do MUCH BETTER.

If oil stays sub $50, this company will be bankrupt within 18 months.