CGX Energy Inc V.OYL

Seeking Alpha Article and Question for SheDrills!

[Gtboy]

HI SheDrills.

I refer to this article by SeekingAlpha last Friday. https://seekingalpha.com/article/4614710-cgx-energy-more-good-news-from-guyana

What do you make of what the writer is saying? In particular the writer is concerned with a few things such as the company is not a going concern. He premised that the reason why the stock price hasnt responded to the discovery is that the company has no money fo fund offshore wells and an FPSO, and that even Fonterra is not large enough to do that. 

Please comment in particular on this and give me your thoughts "The problem with all of this is that there is a limited market for the discoveries noted so far. Probably a neighboring operator might be interested. But it would be rare for another company to just "barge in" and want to purchase what has been accomplished. The neighboring operators are very large and will likely "play for keeps"."

Given the above, what do you - or others- think of the prospect of a "buy out" that we have been talking about and agreeing that this is the only option now on the table. Even in a buy out situation, given that all they have is discoveries, and no cash flow, it dosent really put them in the driving seat in getting shareholders a fair market price.

The other issue I am concerned about is dilution in the form of a reverse split. I am thinking that even Fonterra will lose out big time in a reverse split but given the number of shares outstanding, this eem likely.

No matter what I am holding but these seem like real questions that any informed investor should ask themselves and have answers to.

Would like your perspective or anyone's thoughts

Glta

GT

[Mat1791]

Sorry, not SheDrills Market knows this, but awaiting a major to farm-in.   Yes, no farm-in, no cash, big issue for FEC, bigger issue for CGX

[Gtboy]

Thanks Matt I agree with you and you would think that CGX knows this and has planned for all of this but the way we have come to know this company its like they are just "living" day by day with no contingency plans GT

[Mat1791]

They have spent the funds to de-risk the acreage. Neither company was ever going to be able to take it to production. The country has been waiting for the good results to help with their sales of new licenses. Everyone involved needs to have a major move in and show interest in developing everything further. It's the golden lane, my money is on someone wanting a piece of the action. If

[SheDrills]

I thought the author was ridiculous. "Limited market for discoveries" if by limited he's referring to only world class operators than yes...that's exactly the type of company I want buying in. Small companies are "finders" but big companies are the "keepers"...the only thing I'm wondering is at what price. If oil is there at scale, then world class majors

[Gtboy]

Thanks. I thought he brought out the reality but I was surprised that he/she didnt thought that its an easy Buy-in by a major.  the move from here depends on a buyer and at what price. In terms of what price I am a bit concerned at the current market cap but this is all a risk. You take it and you win big or lose big. GL

[SheDrills]

The reality is that we are a very small group of who invest in exploration. Both CGX and Frontera are relatively illiquid which makes our small group a microscopic group. These 2 companies have put zero effort into courting North American investors and seem to put all their eggs into the takeover or buyout basket. Since I entered here they now have 2 technical discoveries, VSP enhanced seismic