Hi all, just wanted to share some of the
opinions shared.
As of right night POP is steady position they are still cash flow positive, debt free and over 2 million in cash reserves. They wont be delisted or bankrupt anytime soon, unless oil drops below 30$ for a few years (very very unlikely). They are one of the best small/med producers in this space due to there financial health.
POP is producing light oil for a premium and sells upstream to larger refineries/producers there is still strong demand. If they do go after more production in the current bear market they will hunt for wells that guarantee light oil say 50barrels a day as a oppose to a well that could possibly be heavy/med but produce more barrels.
They have very low costs with few employees, and no offices. They did not take on crazy amount of debt to grow and did not issue junk bonds like many other competitors in this space.
As per the KMDC deal that went sour, Terry did a great job with the contracts and everything was legally binding. Terry is putting together a case probono that will not cost POP more than 40-50k, and handing off a bullet proof case to litigation in the US. The KMDC started negotiations when the price of oil was 100+/barrel and they expect KMDC was backed in a corner and rolled the dice by not making the private placements hoping they did not get sued. At the official ceremony goverment was present and it was even on channel 6 news. It wont be easy for KMDC to get away with the breach of contract as well as the other subscribers for possible securities fraud. My opinion is that KMDC will have no choice but to settle on the case that Terry builds. Terry is a great resource for the POP team with his 20 years of experience in corporate finance / securities law.
Apart of the KMDC settlement that will increase POP's cash reserves in the future, they still own a large stake of options in GSR that will not be exerscised unless the oil environment recovers and they need the money to grow, or GSR trades in the multi-dollar range. Eric Sprott has a large stake in GSR and has done site visits giving great confidence in gold that GSR found.
He was very fond of GSR, and the gold/land unlike any other that many geoligists have seen in their career. He belives that GSR will continue to run after some samples are taken from the best locations.
In my opinion POP should be bought on weakness throughout the oil bear market, do not expect any crazy runs these next few months unless miracolously oil recovers but this is a company that you should keep adding possibly alongside GSR. You will reap the rewards 2-5 years down the road when oil and gold both come off their 6 1/2 year low and 12 year low respectively. Management is smart, and these are the only venture stocks I dare to touch.
Have a great weekend all !
Everything shared is an opinion interepret it as you wish
Disclosure: Long POP & GSR