Gas companies are generally categorised as low risk, value stocks. That is, they get to a certain price, and then sort of go stagnant. ITs just the nature of gas focussed stocks. You could ask the same question of United Energy which was stagnant for so long, or whats that other one in Turkey, starts with A, forgot the name.
So yeah a gas stock can become stagnant.
But ECU is different (this is my view by the way) because its a 'startup' company. Eventually ECU will begin generating a profit, and the shareprice will hit a level where it becomes a 'run of the mill' gas company like UEL et al. At this time the shareprice will stagnate.
Question is, what will that price be.
One thing is for sure is that its a lot higher than the current price. But whether its 20c, 50c, $1, $2 depends on lots of things, most noticeably how much gas there is, and how economically extractable it is. I can vouch that it will be economical, as for how much there is, well we'll have to wait and see. I could quote a figure, but its only an estimate (lets just just its well over the 800 billion cubic feet quoted in the announcement).
Having said that, i dont expect Gordon to keep ECU as a gas only co, and he's indicated this by stating in the announcement that they are running a few holes to test for 'presence of oil'. Also Gordon's previous exploits include setting up coal and copper mines etc so his abilities arent limited to gas.
Do your research, though Techs done most of it above...and then make a decision. Thats what i do, and sometimes i win, sometimes i lose. I think ill come out on top this time, but i've been wrong before (IHG comes to mind) so...
Cdchi1
PS: Any specific queries, give us an email at [email protected] and hopefully i can answer them...
ECU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
