G’day hunter.
That’s the $64,000 question. When will we see 5-10bagger?
We can look at the old Arrow energy & see whatthat one did. However, we need to be careful as things are quite different thento now. But it can give a guide.
AOE IPO August 2000 at 20c & I bought plenty inIPO & kept buying for several years. That was a complete start up fromscratch, NOT what AJQ have done. They skipped almost straight to production.Anyway, it took AOE until 2006 to hit $1 (5 bagger). BUT then, well intoproduction, it only took another 3-4 years (March 2010) to hit $5 – a total ofa 25 bagger! I don’t have a lot of the old historical data, but I do know ithit $3in 2007. So, the 10 bagger ($2) was probably later in 2006 or early 2007.
AOE sold first gas in September 2004. I bought somein Feb. ’04 for 27c; Aug. ’05 36c, Mar. ’06 58c. Then it hit the $1 in Oct.’06.
So, you can see, it took a few years to get intoproduction, but once it did, SP climbed rapidly over next 2-3 years. Using mybest crystal ball, that’s what I think is our most likely case: 2-3 years forthat 5-10 bagger. BUT that’s if all goes generally according to plan. They haveenough gas now to ramp up to the 20TJ/day, then 30 TJ/day targets as set out intheir presos (links below). So, getting into those double digits you mentionedshould happen just with Kincora/Roma. As I note below, they intend to farmoutsome of the Nth Aust. Areas to help with those enormous costs. These guys arepros; they’ve done it all before. I trust them to manage all the balls they havein the air. They did at AOE & seem to be well on their way at AJQ.
One thing to remember; it won't be a straight line up. AOE, OXR & all ourother 10+ baggers, had wild rides. Lots of ups AND lots of DOWNS. You have tobe able to cope with that AND to keep a close watch in case one of the downsbecomes terminal.
Whether we get to 3x, 5x, 7x, or 10+x in the nextfew years will depend on firstly all going as planned, then some of their blue-skyupside coming off. How much of that comes in & how good it is, will decidejust which multiple we see.
I like their plan to farm out NT & Nth Qld. Itderisks them a bit & lowers their exploration costs. Normally a goodfarmout will see the incoming company pay a higher % of costs than what it gets% wise of the deal. E.g. paying 40% costs for 30%, maybe 25% equity in thatproject.
Uganda & Victoria onshore, just more blue skyon top. We don’t need those to get a multi bagger. They would help get us into10+ territory, if really good.
A note of caution, particularly to newer/lessexperienced investors. NEVER invest in anything you don’t fully understand. YouMUST read every announcement, presentation, quarterly, half yearly & yearlyreports. If not, you’re asking to eventually lose money. Yes, it takes time.But making fortunes isn’t that easy, or everyone would be able to do it. Plusget hold of any broker or independent research you can find. Not much aroundwhen small, but as they grow, it will become available. Boards like Hotcoppercan also be very useful with increasing knowledge/answering questions. NEVERtake anyone's word for anything (including me). You MUST do your own DD & research.
Investing in junior explorers/developers like AJQrequires time & patience. If you don’t commit to both, you’re wasting yourtime here, or indeed investing anywhere. Although I’m sure there are some short-termtraders that may well make some good $ along the way. That’s just not for me.
So, Armour is a great risk/reward PUNT (yes, I meanit’s a PUNT). Not for a large % of funds, as if it goes south and/or the markettakes THE big crash it eventually has to have, we lose most if not all. I’mhoping we have at least that 2-3 years before any major market disruption.
My investment in Armour bonds is just 4% of myinvesting capital. AJQ shares are just 2%.
It’s going to be an interesting ride on the goodship Armour Energy!
as usual (well it was usual for me to say this on all my posts back inmy heavy investing days);
CAVEAT EMPTOR - risk in all stocks.
Everyone should seek professional advice & not make investmentdecisions based on what they might read on an Internet chat site or receivefrom me (who is just an enthusiastic amateur).
Remember, this information is probably worth what you paid for it.
cheers,
ned.
AustralianDomestic Gas Outlook –March 2019
QUPEX2019
Ann: Corporate Bond Financing Offer Update, page-20
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