I've increased my holdings over the last few weeks. The SP really looks like it is a victim of poor sentiment and has been trashed quite severely. Based on the the December rate of production and slow progress to date it could almost be justified I guess, but looking forward there seems every chance that significant gains will be made over the next few months.
December Quartly = 170BOPD Tonkowa Reworks = 100BOPD Redfork waterfloods = +100BOPD (guestimate) Lancaster wells X 3 = 150 BOPD* Kansas = 0 BOPD (anything above this is a bonus) ======================================= Total = 520 BOPD
* 2 wells drilled. 1 well planned in March. The first well is on pump at 146. 50BOPD is at the lower end of guidance before they drilled.
At 520 BOPD, the EV should be about $50M in a reasonable market (Note: Share market can stay irrational longer than you can stay solvent so no guarntees). More importantly, the increased cash flow should enable them to progress more quickly.
Given the above, I think its highly likely that the SP will be at least 15c (MC=$30Millin) within the next few months. Buying 1 ord share and 1 AOKO for less tha 12c total seems to give very good leverage to the upside while having low downside risk - good chance of getting you money back if things go slower than expected. That's the approach I've taken. I suspect the oportunity will evaporate over the next few weeks.
Best of luck to all holders.
AOK Price at posting:
9.6¢ Sentiment: Buy Disclosure: Held
