My Observations
Background
1. I have been fortunate to participate in the last few placements. In each of these placements it has been made very clear to me that the company would have no problems at all if the placement was "oversubscribed". That is I assume when the directors had to weigh up the cost benefit analysis, it fell on the side of more funds and bad luck about the dilution.
2. In regards to the recent SPP I was of the understanding that the SPP would raise significant $, and that again the more raised the merrier. In order to achieve this the company in my opinion would need to provide the market with a series of quality announcements with a particular emphasis on these announcements coming in the last 4 days of the SPP.
3. In the early stages of the SPP, the consultants were on the phone to shareholders rallying the troops. In my opinion trying to get as many shareholders as possible to subscribe to the SPP.
4. In the last 10 -14 days of the SPP something in my opinion changed the mind set of the directors. There was no longer any full court press rather a close up shop. Then to "pull SPP" early with no additional announcements!!.
5. It is VERY clear to me that the dynamics of the company changed in the last 14 days.
6. My thoughts on what has changed.
- RR 11/17 etc are producing very well. PC is consistent with his positive comments about how things are progressing out in the field.
- There maybe a JV/farm in, in regards to Helper. This site needs a few wells to be drilled and expertise and $ would be a good combination.
- Remember North Helper is a shale gas play and currently has no reserves reflected in the last IRR.
I am hoping that the change is a combination of both the above.
It is my opinion that the next 8 weeks will be very positive for our company.
The only negative I see for the company is the possible overhang of stock held by those who participated in the raisings and are quite happy to sit on the options as their profit. They will continue to sell into 2.1-2.2. In saying this they will eventually dry up, and the greed factor will come into play .
Thus I see a very healthy SP when we are doing AT LEAST 5 mmcf by the end of June and maybe even a JV partner to help unlock the value in Helper.
Then by the end of the September quarter ( maybe in July) we are in excess of break even gas flows ( 7.5-8 depending on gas price). JV realising value in Helper, a new IRR is commissioned and all of a sudden we have a number of options. This will also imo provide the catalyst/dynamics for takeover.
Good luck to all long term and new holders, and I am VERY VERY confident that the next few weeks/months will see a sp significantly higher than its current levels.
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