bang, page-20

Thanks. And yes I take that rally into consideration all the time. Put it this way, I actually care whenever I get anything wrong publically so I do my best to minimise this happening. It's the market, no one is ever right 100% of the time otherwise there would be a lot more billionaires. But I wouldn't say anything purposely conservative that could end up looking stupid by being woefully low. And of course I realise the market never behaves logically. I'll freely admit I often don't foresee the very highest peaks or lowest troughs.
The other week I predicted a run from 1.5-1.6 to 2.6c on award of the permit. That's a trade I would have looked to have made if I could have got enough at 1.6c. I didn't get the chance to take a stake but I still changed my sentiment to a buy and predicted a 1.5/1.6-2.6 run even though I wasn't on board. It turns out I wasn't conservative enough and even I "ramped" too high given it went 1.5/1.6c to 2.3c although it's still pretty close I guess being only a bit more than 10% off.

I have considered OBL to have legs because of runs like that spike to 10c (although the more recent spike to 3c is what was guiding that trade and 2.6 was chosen to get in early on what I had assumed would be selling closer to 2.7/2.8c). But I'm also starting to think it's running out of that kind of exuberant steam. Maybe it's just the incredibly long wait causing holders to exit the first time they see decent green. Maybe it's the legals coming up and funding. Maybe it will get better with some overall positive sentiment for the Laurel.

One thing to remember as I mentioned the other day is that 7c now is the equivalent of 10c back then. All the huff and puff it took to get to 10c two years ago would only get to the mkt cap that would give us 7c today. Another important thing to note is that it got there based on the excitement of conventional oil at Backreef and probably no small pumping effort given the small oil targets there.

I was in PCL at 1.2c and sold at 21c - I'm very aware that small cap oilers can move, it's one of the main reasons I invest in them. However they move mostly on leverage, excitement, some measure of naivety and drilling. Because one share is a ten or twenty bagger doesn't necessarily mean another small cap oiler will be, they are as individual as fingerprints and for every tenbagger there are probably more than a dozen that aren't.

That being said yes 7c+ is possible for OBL. It's more a question of what it would take to get there and when. It's not very interesting to say "a sweet X will take it to 10c" as though something is going to pop up next week or next month and magically save the day. It's better to more seriously look at the steps involved, the likely price catalysts along the way and timelines involved. I mean Buru can get back up to $3.70, or $5 even but that's not a very interesting or enlightening statement. What they would have to do and when to reach those targets, laid out step by step is far more worthwhile to even bother reading.

Probably the single most important thing for OBL is Buru's Laurel work. At the end of this year or next that will very likely be the single biggest price catalyst. I want to see what % of Derby ends up with and how it's funded moving forward etc but all that means nothing if the resource is uneconomic.

It's currently ridiculously hard to value OBL or Buru's Laurel gas as we don't even know if it's worth anything at all. You can't just plug in conventional gas figures and pretend each TCF is worth X. You can't take those figures and cut them in half or a quarter or a fifth - it isn't going to be close. We have to wait and it looks like the market thinks the same thing as Buru moves at least 90% on it's conventional oil work. It's later Laurel drills proving up a larger and larger potential resource hardly even nudged the SP but a dusted so called "appraisal" drill will drop it 25%.

Currently I don't even really value Buru on their Laurel, I'm in mostly for the conventional oil, same as why I'm in REY. For me the Laurel is this amorphous back up safety net whose stitching I can't even rely on if I fell. If OBL had Ungani lookalikes in Derby that were going to be drilled any time soon I'd probably be in already as it's MUCH easier to get a handle on what that would be worth given the lower capex and more immediate time value of the money.
The other thing is, I think Buru are going to do another round of Laurel work next year. I'm not even sure we'll get definitive answers this year.

That said if things are overwhelmingly positive and like they're intending Buru manage to offload a % of their Laurel I think OBL will get a very good boost. But it all depends on how the sentiment goes. How commercial the Laurel looks, how much Buru potentially sell a % of their Laurel for etc etc. With a lot of good news, yes I could see OBL getting to 7c probably without even doing too much themselves, just riding on Buru's back. Conversely if Buru's Laurel work doesn't provide good news OBL will really suffer.

I guess the point I'm making is that OBL is unlikely to be jumping to 10c on a deal any time soon. I think if seismic is done on Derby and it shows some ungani lookalikes, the Laurel has good news from Buru etc then towards the end of the year or next year if a drill happens on Derby holders might be incredibly lucky. FMG were buying a 18% stake in OBL for around 3c once the options were taken into account. Corporate activity isn't going to push this seriously (I mean I think an 80% rise is a serious trade, but apparently everyone's after multibags), Buru's Laurel work or OBL's own drilling next year if and how it can get funded is about the only thing that can drive it to the kind of prices you're talking about, at least sustainably and not in an all smoke and mirroers pump and dump.