Kelt Exploration Ltd T.KEL

Shorts compounding low share price

[Grandcentral]

Kelt has a relatively high short position, probably because it's not currently marginable, hence putting bulls backs up to a wall. Most big bulls don't want to tie up millions of dollars with no margin-ability, and when margin called on other stocks, unfortunately Kelt is more likely to be sold for the dollar for dollar cash invested so they can hang onto their margin that's eligible elsewhere. A solid $2 floor is coming, and leverage players will be joining the game here, giving the shorts a proper squeeze. The appeal of a short play is coming to an end when Kelt anounces reserves, becomes marginable again, surprises with its 4th quarter results thanks to higher commodity prices, and institutions start calling in real buys again. Feb will be a good month.

[Seppelt]

What are you expecting from the reserves announcement? The co hasn't done a lot after selling its main producing asset. The management has said that it will negotiate and arrange a sizeable line of credit. This will be needed if it wants to develop remaining assets to quickly restore production sold and more. Alternatively, it can sell some non core assets. It has too many loose sections

[Grandcentral]

I know you are a fan too. Reserves are simply the start of the timeline for development. Kelt Exploration is an exploration / development company, not a production / dividend payer like people often wish it to be. It's like comparing a tower construction company to an office tower reit. The construction company builds, sells, and moves onto another build. Evolving from previous successes

[OGGambler]

The presentation emphasizes that most of the locations identified by management are unbooked (Wembley 8% booked, Oak 2% booked).  

[geologist77]

Don't hold your breath for a big reserve report uptick. Forecast pricing has natural gas up 15% and oil down 20% in the near term, and I don't think last year saw much drilling outside of Inja which was sold. Last years reserves were announced Feb 20. It was broken down by property so you can get an idea what is left and infer this year's values. Id guess PDP at 250mil (1.32/shr) TP

[Grandcentral]

The updated reserve release will get the ball rolling, it's not the end game, but the start of the next growth cycle for Kelt, that will also align closely with the start of the new growth cycle in the sector. Oil and Gas is a market favorite for 2021 - lots to read on why - Kelt is also a favourite with analysts (buy and outperform) on every up to date report - easy to find. Institutional