I decided to pop down a few thoughts to review my logic for...

I decided to pop down a few thoughts to review my logic for investing in Jacka during the Tunisian Drill and I don’t regret it.

I think most investors like me got involved in Jacka for the big exploration plays in Tunisia, Somaliland and Tanzania. I did not buy because of Nigeria or Australia.

I have shareholdings in safe oil companies with production. If I wanted more safe oil stocks I would have bought Shell etc

If Jacka et al secured a result in Tunisia, Jacka could have been worth (say 100m barrels x $10 benchmark from Cooper last week x 15% =) $150m to Jacka or $0.42.

ST1 did de-risk the prospect which is good and the potential is still there.
Decision to postpone ST2 to 2014 is a mixed blessing
Disappointment = ST2 would have been much better than ST1
Advantage = Takes a lot of pressure of Jacka for short term cash and buys time to refinance or sell assets which is very doable.

Somaliland
There is still great potential here and Genel will be back soon. I suspect they are tightening up security and logistics on the ground. I see the Somaliland Foreign Minister is in London next week to meet the UK FM, and I am sure he will be meeting Genel as well, so we might get some news next week.

Tanzania
This is perfect for a farmout.


Nigeria
I never liked Nigeria, this was always an aspiration for Jacka to secure operation cash flow. Hopefully they will sell it and realise that they are a small (but very good) exploration oil co and generate cash from selling positions in exploration plays.

Australia, lots of question marks here


So I am going to hold. Share price might drop a bit more, and I could try sell a bit now and hopefully buy back in cheaper … and gain a cent or two. But that is small potatoes in the bigger scheme of things at Jacka.

There is no doubt we have lost some of the upside potential with the recent placings. My original target for Jacka was $8.00 a share if they are successful with “all” their exploration assets over the next 5 years. I will do the figures again next month, but I suspect $5.00 is still a possibility after new shares / options being issued.

I made a mistake once at buying Dragon at £0.14 and selling at £0.50, thinking there was a 12 month window of little appreciation and got involved in other shares instead. Other stocks were dogs and sure enough Dragon took off again after the 12 month to £6.00 but lost my cash on the other stocks.

So $0.07 to $5.00 is good enough for me over the next few years and I will leave it to others to jump in and out of the stock to make a few more cents.