Yes, the announcement released on Friday is intriguing. I am a...

Yes, the announcement released on Friday is intriguing.

I am a bit hesitant to raise the expression 'buy when there's blood on the streets' in this instance: It sounds a little crass, considering that the primary cause of the current market rout has also claimed the lives large numbers of people around the world.

However, if you look at the situation from a bird's eye view, it must be said that the conditions at the moment would surely present the greatest buyers market in the resources space going back at least a decade. There would have to be a significant number of distressed assets floating around right now.

It is quite astonishing to think that the WTI oil price is currently sitting at twenty year lows. This would be a nightmare for debt-laden oil companies in North America. On top of that, everyone is ducking for cover, trying to avoid catching the bug.

I'm not sure if those words 'mineral lease' that were used in the announcement are significant: it is often a catch-all term which is inclusive of oil and gas. I noticed that on the BLM website they had a lease auction in Colorado scheduled for the 26th of March, the day before the trading halt announcement. So perhaps Big Star made a successful bid at the auction that was held of the 26th?.

My assumption here could be wrong, though, and it is possible that the company might have moved a bit outside their comfort zone.

I would estimate the company would still have around a million dollars in the bank, and a cool million could go a long way in the current market environment.

One of the directors of this company used to be the MD of a company called Entek, and the announcement on Friday reminded me of a bit of some ancient history in relation to that company.

In the wake of the global financial crisis in August of 2009, Entek was able pick up several exploration blocks in the Gulf of Mexico after making some low-ball bids, and managed to negotiate a very favourable farm-in agreement with another much larger oil & gas company that had run out of cash.

There is reason to suspect that the current situation is even more favourable for buyers than the situation during the GFC, and so as with Entek in 2009, Big Star might be well positioned to pick up some assets on the cheap.

I think there will be a lot of eyeballs looking at the next announcement from BNL, not all of them belonging to shareholders.