LKO- the old dog! Call it what you like, I'm back playing with...

LKO- the old dog! Call it what you like, I'm back playing with the LKO animal again (and desperately trying to avoid getting fleas!)

Seriously, I am now getting set again in LKO. Played correctly as a BESBS (Buy Early Sell Before Spud) stock with patience, this old oiler is a money tree.

Why? Here is the simple BESBS rationale:

- Wombat 4 already has had tight gas discovered. While it did not flow freely (hence a failure at the time), specialised fraccing and expertise could get this to flow at commercial rates. In this sense, it is more of an appraisal well than a pure wildcat. This adds attraction to the punters.

- Beach (BPT) have agreed to operate and pump in up to $50m for Wombat-4. BPT management clearly have looked at the project and think that it is worth such a chunk of their bank balance to re-test.

- Last time Wombat-4 was tested, the SP rose from .004c (yes, people thought I was mad buying up at .004 & .005c) until it topped at .017c. I can't see why this stock doesn't have a chance of again reach the mid-1c range given this past history.

- Yes, capital-raising must be addressed. It is very likely to happen. It also happened last time when LKO issued stock to Pattersons at .005c and they dumped most around .008c. Yes, it held us up for a fortnight but the SP still rose to .017c regardless.

- Beach have just stated in their AGM report that they aim to get this testing program underway early in 2011. This is not really that long to wait. Even if it is the middle of the year, for the patient, $$$ can be made.

- Gippsland has a ready on-shore gas market just down the road - MELBOURNE. With this background, the Herald-Sun and The Age will give the project some press as we approach the target.

- At .007c, the SP seems low enough to have significant SP leverege make an impact and guarantee access to the next SPP if one is offered.


Anyway, I'm just trying to say clearly what and why I am buying (and at the current market price). As always, DYOR and avoid the fleas...

Holding LKO at .007c