To me it is important to take advantage of situations / circumstances as they present. The fact the market wasn't rewarding BRK for the exceptional operational success was/ is a big disappointment, but it created an opportunity. I was incredibly frustrated before the buy back was announced .I felt the company was not taking advantage of what I considered pretty well a once in a lifetime opportunity to unwind some of the massive dilution that came about from funding the HBP drilling program, at a time when the company was getting financially stronger by the day.
Now we have the perfect storm. The company is currently able to buy back stock at a fraction of NPV, and the market is happily still facilitating this.
Rightly or wrongly, at 1.4-1.5 c the market currently values us at ~$70-$75 million . It would probably value us at that figure if we had $17million , or $ 30 million in the bank. If our SOI was 4 billion, ( and we held the lesser cash amount due to the buy back spend) the share price would be 1.75-1.875 cents, and with 3.5 billion SOI, the SP would be 2-2.14c. ( if fractions were allowed)
So I want to see as many shares bought back at 1.3-1.5 cents as possible before any monetisation event is announced. The monetisation event will either bring about a large and early cash injection into the coffers, or a significant drilling program which will result in a company making production profile ( depending on how many DSU's are involved) and very profitable production cash flow stream within a 12 month period, or a combination of both.
Whatever the per share returns eventually are, they will be boosted by the percentages that will result from any reduction in SOI. If this first monetisation event doesn't result in a share price re-rate, then I would hope the company would expand the buy back significantly.
It's not as if the ASX is agnostic to oil and gas.. it just likes the hype of exploration success. But money talks... we should see some of that when CE1 come out of their trading halt in a few weeks when they announce the result of their Canadian oil asset sale. If CE1 are selling their Blackspur oil assets, they should be able to pocket ~CAD 100-140 million IMO. We shall see what effect any such a sale will have on their ~AUD$ 61 million market cap.
In the meantime for BRK, Mr / Mrs Market, keep feeding the cheap stock please.
(20min delay)