GREY:MKRYF - Post by User
Post by
jerrybeon Nov 28, 2015 7:45am
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Post# 24334246
This one is really taunting me...
This one is really taunting me...$.18 now...I bought a month ago thinking we had hit rock bottom, and I am down 50% already!
If crazy invested the amounts I think he did on this one, then for sure he will have turned crazy!
This is the ultimate losing stock with multi-bagger potential. However, with the steep debt repayment schedule lined up for the coming six months, hedges or no hedges, its banks will get very nervous if oil stays where it is.
The only way out without a massive dilution (of some sort) is for oil to come back up and fast...I am siding until the OPEC meeting is behind us. I fear the Saudis will use their strong language (at the very least) to scare every producer around the world into cutting back more. Even though, now they are saying we need investments in the industry...
If MEI can hunker down and survive, it could easily be a 10-bagger. But it is a big IF. I know they have infrastructure, stunning land and actual hedged production. But with a market cap of $14M, the equity market is effectively closed for them. With a steep debt repayment schedule lined up, they cannot issue more debt. The only way out without smashing equityholders would be a renegotation of the debt repayment schedule and an agreement with PSK with regards to drilling commitments. I also recall something said about a clause related to oil being below $50 for three months.
Ultimately, if the assets are that solid, they should be able to secure a JV with capital commitment for the drilling. The fact that they cannot find a partner is what is most likely driving the stock price to oblivion. Without any news from management, this is Russian roulette. Take your bets!