sold out, page-8

"Dis
I would be interested in your thoughts as to market cap at the moment and with cash in the bank does this leave them open for take over?"

I think the whole O&G sector is undervalued at the moment but punters either are too scared to buy or have blown their ammo and are frustratedly waiting on the sidelines. In that context, VIL is probably about right in terms of current share price.

However, this "potential tremendous new discovery" causes tremendous uncertainty in terms of valuing VIL. It really depends on what logic you use:
- Some will say their original targets are still there and have a very high probability of being commercial given gas shows, logs, and analogue wells. This new zone is simply blue sky and therefore anything below 4 cents is probably good buying.
- Others will say that chasing this new zone could have been done after getting some commercial wells going from the upper zones. Market cap and finances would be in a much better position to tackle what is essentially a wild cat. They now find themselves cash strapped and with a low share price from which to raise new funds (including accessing the credit facility). They haven't done shareholders any favors.

My personal view is the latter (which is why I sold out some time ago). Further my interpretation of their announcements is more bearish than most and I strongly suspect that
a) FP#1 flows won't be fantastic from their current interval
b) they will use the current (deep) 10ft interval to learn the best way to drill FP#2 - generally alot of tinkering around without anything to really impress the market (at least initially)
c) people prepared to hold for 12+ months will probably be well rewarded but there will be further short term weakness due to (a) and (b).

As to take overs .... no idea.