onlysif,Sorry to hear that you're making a loss on AOK so...

onlysif,

Sorry to hear that you're making a loss on AOK so far.

IMO, AOK's share price has not moved much because they have only just started discovering the potential of their Snake River Project in the Mississippi Lime formation in Oklahoma.

They are taking it slow and steady (rightly so for such a small company with limited capital), starting with vertical drilling first because verticals are cheaper to drill and it allows them to get a better idea of where to drill their first horizontal in the future(fully within their acreage) when they are ready.

Unfortunately for AOK and it's shareholders, unconventional drilling like the Mississipian plays are not that well known in Australia (relatively compared to US and Canada) and are therefore undervalued by local investors. To make it worse, people who know a bit about unconventional drilling in shale and limestone plays are only interested in 'horizontal drilling' and not so much 'vertical drilling' even though AOK's presentation slides indicate that very good rates of returns can be achieved with vertical fracking.

AOK also still needs to prove that it can achieve consistently good vertical drill results that will ensure that new production rises faster than existing well decline rates. They failed to demonstrate this in July and August with production falling slightly below June and remaining stable after that. I am also not particularly comfortable with the fact that no production details have been announced by the company for well# 17-6 from Hub 1 even though recent announcements have indicated that it is already in production. I suspect that this is one of the reasons why production did not increase after June.

Nevertheless, more recent production data from Hub 2 has been pretty good. Can't wait to see what production we get when we drill a horizontal in Hub 2. Should be pretty decent based on vertical results to date.

IMO, when AOK can show consistent increases in production every month and when they achieve 500bopd (cash flow positive point), a rerating in the share price should occur. This obviously needs to occur before we run out of funds.

JV's with Range Resources should help us achieve the above however our next horizontal with them is unlikely to show any results until January 2013 IMO.
Should also not forget that Apache are currently drilling the very first horizontal well up in NW Kansas 8 miles from the border of our NW Kansas acreage. Any success there should also translate into a higher share price for AOK. Results for that well should be due out in December 2012.

IMO, AOK has a lot of potential but more patience is needed unfortunately. Hopefully not too much longer.

All the best with your holdings.