Technical and Fundamentals AOI is caught in a negative channel and is heading to $0.80 before year end. I dubbed it the “downward dog” posture.
i expect the stock will drop to $0.50 or under by mid 2021. The guidance by Mgmt for 2020 and 2022 that was reiterated around the first part of the year is really a pie in the sky. Brent oil was forecasted to be around $78 next year and only one-third pf it’s 2021 production is hedged at $60. Brent is now trading below $40 and oil is likely to crash again due to demand destruction. Chevron said it is cutting 25 percent of its Nigerian workforce. Others are doing same.
The international banks that hold the line of RBL credit had cut down its limit forcing the Co to presell its oil to 2021 to raise cash to meet their demand. There is no more head room left.
AOI still owes $1 billion (Can) in debts to the banks and its partner. The stock has lost 90 percent from its historical high reached in 2014.