Reconnaissance Energy (Africa) Ltd V.RECO

Target price on success: $ 24/share to $ 5,760/share

[Hiddensecrets]

This post assumes we are successful anywhere from moderate level to a smash hit. 

Per Haywood:

Modest Success

 500 million barrels of oil equates to a stock price of:                                         $ 24 per share   (3.6 billion)
(Oil value:   500 million * $ 50 per barrel = $ 25 billion) 
                                                                                                                          


Ulitimate Success

120 billion barrels of oil equates to a stock price of:                                        5,760 per share ($86 billion)
(Oil value:  120 billion * $ 50 per barrel = $ 6 trillion)


Present valuation:               $ 600 million (including warrants / options)


Potential:          Min:       $ 3.6 billion                      Max:         $ 86 billion


I guess this begs the question, who in their right mind is willing to sell or short this stock given this potential?

MPO

[Bpultra]

=========================== there are always two sides to every trade ... the shorty shorts are jumping in hoping they hit some dry holes .. while the longs are already thinking they hit some gushers.... so right now its paper only being traded... and hype and the promise of hiting something running this up....  so going to be intresting to see who is going to to be right... reminds me of

[NameOfTheGame]

It is difficult to make these assumptions based off OOIP and OGIP only. There are many things that factor into the economics of an Oilfield. I'll lay them out in a simple sequence below ignoring reservoir engineering practices such as calculating bubble point and other things.   Revenue OOIP (conventional, unconventional, non-recoverable = 500,000,000 barrels WTI: $55/bbl

[C6J6Dub6U]

company already said 35+ makes profit. Professionals have said that's a high conservative quote and will be cheaper. Yes even with no pipeline there. Im sorry your numbers don't represent much correctness. But realistically no ones are. Because when it comes down to it. Every number or guess is based on only 12% of the total acreage actually owned. Not sure why you seem to be like this

[NameOfTheGame]

Correction on my calculation. Reviewing Recon's statements their BREAKEVEN PRICE is 30 per barrel, that likely factors in factors in all their economic variables including lifting, distribution, and royalties. The calculation is much more simple. 500e6 OOIP bbl*($55-30 $/bbl)/176,000,000 shares = $42.61/share This is a number that would be gradually attained as the play derisks and does

[C6J6Dub6U]

I've put everything I could on here, my portfolio is like 98% reco. Nearly 70grand. (I'm a slow starter investing as I'm 40) People can make their choices they want for themselves. I know my disappointment if this is a flop wil be large, but I also know that If its like Jarvie expects that my wife, my father, and I will be retiring and living a very very good lifestyle far greater than

[ubiquitousman]

If this is a tight shale play, horizontal well, multi stage fracing, their break even will probably be north of $60  a barrel and that is after the expenses of getting all the equipment and infrastructure over there to be able to drill and complete tight shale wells.  The hope is they can find some big conventional fields, which is trickier, but hey, they are calling this a Permian Basin

[C6J6Dub6U]

your absolutely incorrect and really being silly now But keep posting bull posts like this so everyone knows to block you lol

[Erebus76]

If I were to invest here it would be on the hype. Reconafrica needs more funding and looking at the amount they've invested in 3rd party advertising to pump up investors the value over the past couple of weeks seems to correlate with the advertising. There's potential sure. But my ex has the potential to finally get a job too but so far no dice. I might invest to see if the advertising

[Chas15]

Wow thanks for this intelligent remark. I'll be sure to listen to you, how's TGOD making out for you? Maybe I'll move my money from this sleeping giant to that pile of trash. 

[Cancundude]

Chas15 why are you so angry all the time?

[teheran10]

??? What are you talking about??? Go Away!!!

[NameOfTheGame]

@Teheren10 don't feed trolls. Look at  their history of posts on their profile. No positive contributions to any communities and I half suspect he or she is either a child, or a bot. Just report abuse and ignore.

[NameOfTheGame]

@erebus76. Their drilling program is fully funded and the company has no debt and limited if any liabilities. On top of that, the treasure is about to be funded tens of millions of dollars more when the warrant money comes in in the next few weeks. The company is actually extremely well positioned for this program plus further exploration.

[Erebus76]

Thanks for that. I'm actually stuck at sea and internet is spotty. Hard to load most websites and maybe it was an older article. This works well because there's not as much to load. I just knew they had a strong ad campaign. I was interested to read that the world's largest non-glacier underground lake is right in that area. Lots of ancient zooplankton and algea deposits I imagine

[C6J6Dub6U]

nice attempt however the increase in share price is due to the commencement of drilling look at the price history. Drilling started on Sunday the 10th. RECO took off the 11th. Keep trying. The ads are to promote and they have been going since before the 11th

[NameOfTheGame]

Also, make sure that as the stock price rises, you de-risk this investment at target prices you deem comfortable for your own risk tolerance.  My goal is to sell off 15% of my shares once I have enough to recoup my initial investment plus a couple grand profit. The rest, I'm plassing it all on BLACK and riding to the end of the line.

[Chas15]

So let me get this straight, Nameofthegame - you believe this stock price is going to reach at least $24/share or even possibly $5800/share (it was hard to type that without laughing out loud) but you invested 2800 dollars at 0.57$ and only own 5000 shares? HAHAHAHA. Comments like yours take away all legitimacy from the discussions on this board. Keep your insane SP predictions to yourself. 

[Cancundude]

Chas15 are you smoking crack or are you suffering from a Covid fever? Nameofthegame was responding to someone else whom was suggesting those prices. Check the tread and you will see that you are not getting it straight. NOTG thanks for taking the time to post your breakdown on the numbers as you see it. Does seem a very conservative estimate and I am good with that.  CCD

[NameOfTheGame]

No problem dude. Stockhouse isn't the most intuitive platform I think the guy above got confused. I tend to ignore the kids on the forums who are a bit sensitive in their response. My analysis was based off conservative oilfield economics and assumptions of a heavy oil with low recovery, high lifting costs, and Canadian distribution expenses. It should be noted I used the most conservative of

[Cancundude]

Oil deals are not exactly my wheelhouse, am more financials and biotech. Let me ask you what does a "farm out" deal look like? Royalties, lease payments? What's the likelihood of a complete buyout if it proves out to be even on the lower end of expectations? Thanks in advance. CCD

[amkestrel1961]

Taking the words of Dan Jarvie, Bill Cathey, Scot Evans, etal from their presentation at the American Petroleum Institute meeting in Nov 2020 in Texas af face,  you can watch the entire 48 minutes of video on the recon website.  They are in for the long haul.  Insiders own 18% of the fully diluted shares and just received another 850k shares in options. This is their once in a

[C6J6Dub6U]

I have very high doubts of buyout as farm out is their plan. When these guys make a plan they follow it to the line. As we can see how this has all flowed so fast between the boat ride to drilling to already setting up the next step with scanning etc. I highly doubt of a buyout unless its hostile

[NameOfTheGame]

That is a challenging question as there is no cookie cutter agreement with farm out deals. Much of how an agreement plays out is done through negotiation and lawyer-work. It will depend on how much competition there are between the majors to get in on the play. If they feel they have leverage, Recon could objectively be a minority holder on the play - something they would have to accept if it'

[C6J6Dub6U]

[Cancundude]

Ha! Sorry I asked. Hahaha. Well I am retired now and other than managing my own portfolio I can just hang out and pretend I know but learn as I go. Gonna be exciting and actually already is. If I can get a double I will just recoup my capital and let the house money ride. If it's a winner long term then great I am only 55 so have no problem waiting it out. Looking forward to tomorrow's

[NameOfTheGame]

Haha no worries @Cancundude. I figured I'd put it out there so people can see how many missing points there still are. ;) But there's lots to be excited about! The Owambo cores looked good, the looks on the faces of the company's leaders say alot too. You can feel the energy during their videos. They are enthusiastic.

[C6J6Dub6U]

I had thought of a similar approach. But I'm now leaning on letting everything ride as I look at more and more numbers. BUT. ... at the end of every trading day my wife and I will decide . Deal or no deal. Lol Hope we are all millionaires before this year is over

[teheran10]