Hi @ecker,
How well versed in O&G are you as its difficult to assess what you mean. Single well economics are just that - a single well AND in complete isolation (esp as reported by AKK not reporting NRI).
The issue is that it is being used to promote a 390 well development with drilling over 10yrs. It is not reality.
Figuring out how a company makes money (and I mean NET INCOME not some BS before this or before that adjusted figure) is important. I have the same issue with other O&G companies that sweep the real story under the carpet. Verify!
So if you believe that 127% IRR (what exactly does that mean for AKK anyway) and that the capital cost is repaid in 7 months and the process is repeatable generates predictable cash flows to develop 387 more wells etc. then good for you. Me, I would try to verify both the single well isolation to typical well full cycle cost and how repeatable the cycle actually is.
The company's share price might only be $0.005 and the market value of equity is $8.37M but it also has $71,935,989 is accumulated losses on on its balance sheet. That ought to help frame how successful they have been with previous efforts.
@gassed - you write "I've never understood that". Add that to y0ur list. Must be fairly long by now.
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