Long Run Explor Ltd Ord WFREF

LRE and Oil Prices.

[rbronte]

I have a few question for you oil experts.  If the price of oil drops below US $80 as a result of increased worldwide production or due to political issues (like OPEC imploding), is LRE at risk of folding?  I believe that the company is being run by a very professional team, but would a 20 or 30% drop in the price be an event that would be beyond their ability to manage?  Also, in general terms, is there still a lot of interest in buyouts of oil companies such as LRE?  In advance, thank you for the education.

[aaaaaargh]

I would  say that it would NOT  be at significant risk of folding.   First of all, most market swings of oil tend to be short term.  Second, alot of the oil price is hedged to prevent price swing hits to the company (conversely, this can hurt growth if oil were to go up as well).  Lastly, they produce at much less than $80/ barrel.   The first

[barneyj44]

Great post aaaaaargh , it rates a solid 5

[itsalie]

The risk of closing the shop is nill.. but the risk of a 50% haircut is always a possibility.. and that is exactly what happened to many small cap, high divvy oil stocks this year.. most have recoved most of that loss..