RE:RE:red again in londonWhat about the penny stock finnabachi retracement? Using technical analysis on a 44% risked wild cat drill hole where EOG gets 15% net if tullow et al hits. Really?
If they hit on Jethro that is a net 40 million BOE to EOG (assuming 250 million barrels in jethro) times $7 US per barrel (being generous with that number) or $280 million US if they hit on the first prospect. Let's say that is say $320 million Cdn. The market cap is currently $250,000,000 (thx to mgmt dilution in the form of options and RSUs to everyone and their dog) and they have not yet discovered 1 barrel of oil. On a first wild cat hit the market will assume more oil on the block so let's say the initial upside is a double on a hit. The downside is the stock price will be cut in half (being generous here). To me that is what you place your bets on.
In hindsight, retaining only 15% of the block has limited the upside here. I give little credence to promotional british broker reports but they are nice summaries.