Correct me if I'm off the mark, but nearly every broker analyst report has put a buy at around this price in the last 6 to 12 months and the sp has behaved pretty much accordingly, apart from the Batman move to 6.2c.
The last 6 months has seen average lower volumes on the asx, which altho boring for many here, espc the HC traders, who some of which appear to be even getting a little vocal on the 88e thread, is technically an excellent sign.
The fact of the matter is that all these so called analysts give a loose interpreted value of the companies market capitalisation of around the 200M mark, which for me anyway, is a pretty solid value given recent placements of mid 3s to low 4s, even if it doesn't go anywhere near where the value of those that BELIEVE in the 88e story should be thus far.
But as all LTHers will know, "the game" at this stage seems to have become not so much about the sophisticated placement takers taking their not so sophisticated 10-20%, but that of steady accumulation around that 200M mark. As mentioned above volumes are low with a daily consistency about them.
Now for a company to consistently hold a market cap of 200M intimates a certain level of market belief in what that company is trying to achieve.
As I say, most here will know this story and if U don't, all U need to do is read the company annmnts from late 2015 to present.
When one thinks about it, an exceedingly short time given what the JV has achieved. But then in this industry segment one cannot afford to blink. The dynamics from all respects change almost daily.
One could point out that much of the ground work had already been laid by Paul Basinski who, with his Conoco/Eagle Ford experience, has refined his volatile vapour phase oil model to the point where he tactically outmanoeuvred a much better financially backed company in Great Bear to enable the 88e/Bex JV to take out what Basinski has personally confirmed as THE WHOLE of the vapour phase sweetspot.
Now this is exceedingly important from the CONTIGUOUS aspect of these unconventional plays, and the eventual realised value of the JV if this unconventional new type play is proven up as viable with the upcoming Ice 2V flow test.
If the HRZ is perceived as having an economically flowable resource that can compete with the current energy market, and Paul Basinski's model is also continued to be proven up with Icewine derisking and resource continuity, then the fact that this minnow JV holds a massive CONTIGUOUS acreage of vapour phase LTO on a main infrastructure corridor in one of the oiliest places on earth will be hard to be missed by the massive US shale energy industry.
This will be an extremely salient point for the JV and could turn out to be another master stroke in terms of a JV value multiplier for investors.
It centralises this play as a much sweeter target for bigger money.
As we have seen of late, the large to mid sized shalers have been scrambling around the Lower 48 plays attempting to turn a patchwork quilt of disorganisation into something resembling plays that can be EFFICIENTLY worked.
It doesn't take Einstein to work out why.
The more connected this acreage, the greater the chance the sweetspots are covered, and the more efficient the operations are with respect to operations proximity.
The required operations infrastructure can be managed with minimal managerial financial input as it will allow maximising of the current new trends in the shale oil industrt.
We are seeing per bbl costs being driven lower and lower and one could argue that this cost rationalisation, driven by necessity post the shale bust, is reaching its peak given some majors are now quoting $20 to $30/bbl costs of late.
The only subsequent way to continue driving costs down is to start maximising proximity efficiencies, and we have seen this in the last couple of years post the bust, with the majors paying relatively big money for small acreage parcels in the Lower 48. Some figures quoted have been in the $60,000/acre region.
In fact this is the figure Paul quoted in that recent U.K. presentation. And if anyone would know this Houston based oiler would know !!!
IF the HRZ is proven to be homogeneous in all respects, and the whole of this acreage is highly prospective for volatile vapour phase LTO, then it has the potential to be a contiguosly packaged play of potentially the highest known flowing type of high API hydrocarbon strata there is.
THIS is what Paul Basinski has chased for the last decade of his life, and what I think He sees as the penultimate shale play, in more ways than one.
As he so eloquently stated it the UK recently with reference to the JV sweeping up the new acreage,
"They have not left anything on the table this time around"
This being a back reference to the Conoco acquisitions where they didn't quite cover all the vapour phase acreage.
This is not to say that we will get the same value applied to our acreage if/when the play is passed to another company.
There are consequences of the play being located where it is, primary being the supply logistics as applied to some of the new shale techniques and technologies.
But the North Slope isn't totally devoid of frack logistics.
Many of the newer wells on the Slope already utilise fracking as a major production boosting tool.
So the logistics exist.
It will be an upping of scale down the TAPs/Dalton that will be uppermost in any Icewine buyers minds.
If the scale of the operation is there to support such capital input to upscale these logistics then the Icewine image sharpens in the target.
THIS is what the recent acreage acquisition was all about imo. Not only that, but it obviously has significant implications for investor value as well.
This is not taking into allowance any viable
turbidite fan plays which could add significant low cost conventional value to the acreage as a package. If U have the drill rigs in proximity to a viable fan play it's little extra cost to spud/plug these as one goes ready for production.
In essence, if the HRZ flows, this JV has put its foot on a COMPLETE major unconventional oil field, getting into similar maginitude of scale as those conventional fields to the north at Prudhoe Bay.
Will an Icewine buyer baulk at the initiating capital costs ?
Imo they won't if the scale is there as an ecomically extractable resource at current oil prices.
After all that's what it's all about.
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