Johnny46,
What you say makes sense to me. The lack of financials brings up a host of questions. Can BECC attract investors? No new investors, no growth. No growth, no BECC. It has been suggested that a BECC well is choked back due to low prices. That is possible, but that means BECC’s cash flow is choked back if they have an override or carried interest, so they would be hammered by low prices and low production. So can they attract new investors? If they are choking back their wells, which, in fact, may be prudent, it would only make sense for them to slow drilling, reducing the need for investors. If they shifted their activity to acquiring properties, they would need investors, so that would be one way to need investors that cannot be detected from public records.
These questions could be at least partially answered by financial reports and company presentations. It will be interesting to see what happens in February if the company is still functioning and I think it will be. I started out my comments about BECC by saying a $500 million market cap could not be justified. It might have been interesting to a day trader who might then make some money. Some gamblers make money in Los Vegas, even though every bet placed is a bad one and as a whole gamblers are guaranteed to lose money. Apparently, I was right about the market cap because the current market cap is $18 million. Now, admittedly, just the drop in oil price is enough to kill a startup oil company. Some would say that that was not known earlier. It wasn’t, but I was aware of the possibility and stock investors should also have been aware.
So if someone does not think a purchased luncheon with a congressman or purchased radio time or speaking at conferences is evidence, there is no reason to think BECC will survive. However, if you want to play the long odds this might be the time. A 1-in-30 chance might bring a nice risk-weighted return. I don’t think the odds are that high, but on these long shots how would one know. Besides, BECC doesn’t have to succeed, people just have to believe it will and all it takes is a good speech and lunch with a congressman for people to think that. On the other hand, if I had a significant number of shares of BECC, such as a million, I would be nervous about finding a market.
