This announcement threw a wet blanket on positivity.
It's brought home the reality of how financially troubled the company is, despite promises and rumours - most of which ahve all been shown to be rather questionable over the last 4 years.
I have a strong belief that the only things that have ever driven this boat are promises, rumours and money men who have been the wind in the sails, as it were. Ie, very little about the company's direction, its activities, and its resource have ever contributed to its value.
Its resource estimate was downgraded significantly not so long ago; Its financial position has become shrunken due to no profit and in all likelihood 50% of the companies remaining money has gone to wages and legal costs for in court disputes; and any sentiment the public has had for the stock has been mostly negative and driven the share down from a high of around $1-80 to less than 2 cents in a rather short period of time.
As we speak, the only thing that seems to offer hope for the company has come in the form of 2 and 3 step promises that are conditional on each previous step becoming successful in its own right.
I was recently positive on the companies hopes of turning into something stable, but again, after digesting the bigger picture over the last few weeks, i am doubtful that the company is able to become anything more than unstable - until it has achieved its own projections, such as "clear Creek is economical at a gas price as low as $2" and "gas flows are imminent" etc.
I feel there is a thread running through the company that is of old blood stock and that very little has changed for it in the last 9 months, despite propaganda, promises and some clever semantic make-believes.
Until the company actually gets something done, shakes legal disputes, makes some economical/commercially viable money, tells the real story behind its current hold-up and gets a new operation going (on Mancos for example), then i just see the whole thing sinking.
Indeed, i think those of us who do think so, could forgiven for having the opinion that the company is some play thing for a few rich kids who have good wealthy mates to push them along (who might work in banks, or broker houses) and no appropriate corporate or field experience. Now granted, that may be a completely negative outlook and some might call it a witch-hunt, but the thing i am trying to assess is the companies actual value, the companies real chance of promoting itself beyond myth status, the companies integrity or respect towards creditors and whether or not the terrafirma is the real issue here, or if persons still running the company might be wholly responsible for the companies slow death, if it does die, and i think it could still, despite promises.
Why has the company not accessed the 3.4 million it supposedly raised MONTHS ago, which was due for release ONLY after shareholder approval at an AGM/EGM?
What is supposed to be the income stream from here on, considering that evey aspect of the existing activity has been flogged beyond 'dead-horse' status and now, in some ways, given up on?
Will the Clear Creek leases be paid for and taken up again by the company if it intends to use the fields as an income stream - the only successful wells so far that is.
Will the company continue to prop up the liabilities of Oklahoma wells that i believe are costing more to upkeep than they are making and which has been the case for many years?
Will, and how will, the company shake its known liabilities, from legals to its commercial black-holes and the financially bottomless pits it calls its activities?
These are its issues.
All the market has heard about for the last 6 months is how successful the company has been, in not having to pay back its $54 Million debt, which it has put off for 1 more year now. - That, to me, is like saying that a dying body, with visceral cancer, is going to benefit in some way from not having to pay the medical bill for another year. So what? The life of the bill has been prolonged, but what impact does that have on the success of the body...the company? The cancer is still there... the body can still die... ..and the medical debt still means that the body will go broke with huge medical bills...whether its now or in a year if that body doesn't get well and go back to work and start making some money to pay its debt and feed itself.
I am getting a sore elbow for all the head sctratching i am doing, while trying to work out all these values that the company is hoping investors will imagine, despite the fundamental consideration it has to offer them...despite the future issues that seem not to ever be addressed...the lack of direction...etc etc.
In a sentence, if the company doesnt pay off its massive +$50 Million debt and get at least another $20 million for drilling successful wild-cat wells in the Mancos (and paying for pipelines to be laid), then its already dead. Realising that probability is the only thing that can be prolonged if the company fails to secure the above by Christmas 2010, IMO.
Read my disclaimer - i am not an advisor, and know that this post is based on common sense factors, company history of success and failures and common sense (did i say that twice?).
Good Luck investors, and remember that money makes the investment world go around, so don't let anyone have you living in la la land at your real-life expense.
Like puppies, you reward companies for doing good tricks. Holding off debt is not a good trick, the debt is still there. As investors, we must treat companies like puppies or give them to someone else to deal with if they are nothing but problems. And now that the share price has risen to 4 cents or so, it means that if it goes back to price level of a month ago, then its a 50% loss for anyone who bought at this price - basic math. So as an investor (which i am not and do not intend to be) I would be taking a good hard look at this investment right now, because if nothing happens soon, it simply will act like a ballon and go down in time.
L
MAE Price at posting:
4.2¢ Sentiment: ST Sell Disclosure: Not Held
