Rig count does not tell the whole story. It is certainly a good measure of activity, but it is not a measure of success. After a well is drilled it is either classified as an oil well, natural gas well or dry hole. The determining factor is economics. If the well can produce enough oil or gas to cover the additional cost of completion and the ongoing production costs it will be put into production.
RFE production costs are unbelievably low (2.50) and the next step is to make the production scalable meaning to put more rigs online. The management seems to have a reasonable approach by funding this expansion out of production. The keep the balance sheet healthy or do not dilute the ownership structure with a rights issue or similar.
They way they do it shows, that the management has a long term target and not just dress RFE nice for a TO. If I would management or more importantly a major shareholder I would want to give RFE away to early on a TO.
Just a matter of time – patience is what it needs. IMO only.
RFE Price at posting:
$1.34 Sentiment: LT Buy Disclosure: Held
