yep, i hear you - the reserve and possible production profile is pretty much known for about a year now and yet nothing happened to the SP. What good is it the company is generating cash, and we see none of it? - either in terms of capital appreciation or dividends...which could in itself lead to capital appreciation. Its ok for the execs and BM folks - their pockets are being generously lined with wages and bonuses, but we're sitting here watching their grass grow.
The big players in this area aren't stupid and they will not give brk a cent unless brk prise it out of their pockets. brk tried to do it the easy way, but they saw them coming. To play with the big boys, you need to be in a position of strength. Strength can be derived from: 1/ oil price goes to 120-150. 2/ the efficiencies and reserve increase that you can get by joint development with neighbours - using "diagonal" laterals 3/ above average rates achieved in the wells currently being drilled (as we suspect is currently the case). 4/ seriously implementing full field development.
one or more of these things will light the bunsen burner under the seats of execs of the bigger players here and compel them to make a move...which will result in a payday for SH (and BRK BM execs) In the meantime however, the company needs to make a credible move to providing SH with some forward program of capital return/dividends, so that there is interest in the stock. I would expect to hear some thing about this once they have completed and confirmed production from the current programme.
I would also expect to see more happening with acquiring other acreage. These are all drivers for SP appreciation. My view is they wasted a year getting to the current point, thinking and waiting for someone to buy them out. My view is also that we will see $150 oil pretty soon. So maybe that will light the rocket.
BRK Price at posting:
1.5¢ Sentiment: Hold Disclosure: Held
(20min delay)
