Hi All, I'm a bit of a Noob so please forgive me. I have been...

Hi All,

I'm a bit of a Noob so please forgive me.
I have been talking to an exploration geologist friend of mine about this stock in particular.
As he is remote at the moment i have been feeding him bits from the announcement.
Could anyone please explain to me where to go from here.
basically the below was his response to my screen shot of the announcement posted into a Facebook chat we have open.
Should i sell?
does he have a compelling argument?
should i buckle in for the long haul?
anyone have any information that i can go back to him with to sway him to the dark side?


Quote;
"So, they are saying that the seismic doesn't fully give them a view of the potential because it's midway between a tight oil play (aka Bakken) and a normal oil play (ie; what don't need fancy fracking).

But it's still going to need some fracking. So, I dunno...2.8 billion barrels recoverable on 10% rate, x 80%. Market cap is $120M.

The issue you will have is that, lets say they can produce 100,000 barrels a day. At an all in cost of production including CAPEX of $40 (seems reasonable) the field won't be profitable at the moment. If oil goes to $50, then the margins would be $10 and the company would make $29M p.a. - so its on a 6x PER @ $50. With no wells drilled, excluding tax and royalties. At $60/bbl you're on 3 times forward earnings, no wells drilled, assuming a 10% recovery and so on and so on.

I don't know what you've got invested, but they went up 30% today. I'm going to call it overcooked at the moment. Take your money off the table, book your profits, and don't look back"