Big Big News all over several media, page-20

I've been accused of a bit of down ramping in my time Plough, though I like to think of it as critical analysis!

It is surprising there are a fair few negative posts no AKK given they haven't done much wrong in the time I've held it. Hence why I still hold it! When I initially bought in, AKK only traded a the value of the balance sheet cash for drilling. All campaigns have been successful but the stock has still more than halved. Its just the spec bear market in my view, and then falling prices always bring out a few bearish posts, usually without substance, often talking about number of shares as if that means anything.

Anyway, AKK does seem very cheap at this point with an enterprise value of only $25m. Roughly speaking, after yesterdays news, the Pierre formation could justify that valuation. And that's just a sideline, a virgin field with I'd say no value attached until yesterday. Looking at the note at the top of page 4 in the quarterly, the neighbouring field had 22 wells with average revenue of about $3.5m (assuming $110 oil). They cost $1m a piece so net revenue of $55m. That's pre operating costs and undiscounted but still, AKK's first well looks particularly promising so far and not crazy to say this field could be worth $25m in my view.

Of course, its very easy to argue that Eagleford alone also justifies a $25m valuation. The implied value implied purely from their share of $40m drilling commitments is $17m. Obviously its worth more than just that given that the first well flowed at over 1000 barrels and three more results are pending.

That's potentially two times today value before you even start to consider the flagship Pathfinder project which has two successfully wells, the potential for 250 wells and is about to come on line.

AKK has needed to sell a lot of stock into a weak market but the technicals are improving fast, the valuation is silly and lots of news due. I think a 50-100% move up is fairly likely from here if the news continues to be good.