OTCPK:VREYD - Post by User
Comment by
CravenRaven101on Jan 14, 2016 1:44pm
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Post# 24458760
RE:Thoughts
RE:ThoughtsProduction declines if a company stops drilling...ergo a company in receivership will see it's value decrease because there is NO money to drill new wells, or to work-over existing wells. A company's value then becomes the 2 p reserve estimate + their BOE/d which will steadily decline. The double edged sword for these companies is their reported 2 P reserve estimates... Companies borrow based on these estimates... but these estimates also shrink based on what a Barrel sells for... so... the LOWER for longer scenario will see credit lines reduced... once those credit lines are revised even relatively strong companies will see their physical values reduced... and once that happens the capital will dry up... and *poof* bankruptcy...