full house or 4 of a kind?, page-14

On the up side:
• FAR is proving up its prospects nicely with 3D seismic reports etc.
• It has 1 farm in, in the bag
• It has two more farm ins about to happen.
• It has a motivated management team, as they stand to make a lot of money if successful
• Its shareholders have just protected themselves from a very low takeover bid by offering the management team an incentive.

On the down side
• The world economy is ###cked, so money for drilling risky oil prospect is scarce, therefore farm ins come far too slowly in respect to the original licence grant timelines. This puts FAR at more risk than it would have been a few years ago.
• There is a risk that no one hits oil in any of our neighbourhoods and that will impact FAR and its potential partners.
• That said, it’s all a big punt anyway. At these prices you are taking high risk for a high return, something you don’t get with higher priced stocks these days.
• We are at risk of a sell out one we go above 4.2/4.3 cents

I was prepared to take a risk with FAR. I went in with eyes wide open. It was always going to be a big punt. I did that because it was the best big punt out of a bunch of them. My opinion hasn’t changed there.

So my only big concern is, if the stock does climb back we are at risk of selling out at 5 cents. However if it does get back up there in this current market it will probably shoot past it by one or two cents.

So I am happy to hold, and stick to my original strategy, but what complicates things for me is the possibility of a sell out at five cents, now that the management team has skin in the game.

Any comments to my ramblings are welcome.