Hi Stradzz, I'm in my fourth year too and while I initially suspected the road to a 'successful' (ie theories proven, oil found, acreage appraised and curve creamed, exit) end of the road would be about 4-5 years, I get the sense that circumstances have added a couple or more years to that time frame.Then again, the potential upside has also grown from what was being initially conceived (unless HRZ is discounted, which I don't), as has the rate of dilution for fund raising to move us along that path. So IMO, same destination but different path. And lots of potentially scenic points to exit remain along the way for those less inclined for the ongoing risk/reward trade-off of the longer journey. Envisaging the journey and contemplating various scenarios and contingencies has always been an exercise in dancing with hypotheticals. Still is.
The 6-8c was just a wild-assed guess. It could be considerbaly more or less. I try not to speculate too much on SP (as opposed to underlying and/or option value per share), simply because for now it is almost entirely driven by speculative sentiment....and speculative sentiment is likely to still have a big say even after fundamental levers are added to the equation. A FO will allow some fundamental levers to provide some 'see-through' valuation beyond just speculative sentiment....though speculative sentiment will act as either an inflator or deflator of that fundamental value. In its simplest, an FO represents cash available for drilling and appraisal...which represents direct addition to our market cap. So, as illustration only, if a farminee commits to a 3 well programme up to completed flow test across three multi-stack zones, plus give us free carry, plus give us $20m cash for past expenditures, and with a drilling cap of (say) $30m per well and an ice-road cap of (say) $30m across the programme...in return for (say) 75% WI, then that is the equivalent (in valuation terms) of a $140m addition of cash to our balance sheets for a 75% in reduction of prospective/target conventional resources in the farmed acreage. That cash bit in this example is about 3 cents a share, but the progress towards exploring the acreage may inflate that beyond that.
Winx too at 144m bbls will only drive fundamental value when a path and timeframe to monetisation becomes clear, but prior to that speculative forces may also eke a couple of cents a share out of it. So if both strong FO and Winx deliver big I expect that we could see a small number of multiples over today's market cap....and that being a 2019 staging point before further advances if the farmed exploration wells strike oil in 2020.
YG provides some contingency for kick-starting the journey if Winx fails and FO doesn't happen. But that will be a painful period in between and the journey likely will be necessarily further lengthened. As said earlier. we need a win in the next month or so.
All IMO. GLTA
88E Price at posting:
1.9¢ Sentiment: Hold Disclosure: Held
(20min delay)
