The thing is I find it hard to believe they are going to pursue purchsing assets and looking to fund exploration. The shedding of staff, ceasing finance facility, commitment to cap rtn, plus temporary contract for Herod suggests to me it's either a sale or cash harvest strategy.
I also would not say the bottom is in as I'm on the other side of your trade as I see their being value at below 1.3c and looking for a total return of 1.7c or above. This is actually what I have been doing with OEL for past ~ 18 months, but have got caught out/made poor decisions when surprised twice: once from an ann. from Mike saying he'd been to a convention and intimating Otto was considering buying assets that made me sell too quickly and then buy back in after Mike moved on and they went into wind up mode, and secondly not selling straight away to take profits when sale deal fell through, as wanted to wait one year for CGT discount when would have just been better to sell quicker.
From here on in I'm happy to hold as cash harvest strategy works great for me as capital returns likely to not be taxable and I do think we will get steady cash returns hopefully on a regular basis after May/June cap rtn if sale doesn't go through, or more/all at once if they manage to sell some/all assets.
Thanks to both you and GDN for posting regularly and generously sharing your considered views. Otto is the best stock I hold in terms of analysis and insights shared on hotcopper.
OEL Price at posting:
1.3¢ Sentiment: None Disclosure: Held
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