Interesting question, how long will Freestone
remain priced in the .20's? I would venture to guess, WAG, that it will be trading in the .30's before Friday, June 1st, 2007.
Potential investors should not forget about Freestone's option to drill several new gas wells in Crockett County, Texas near the town of Ozona. This option has been on the "back burner" for months.
But most of all, investors should prize the diversification that this company has in its vision of the future: Oil & Gas Exploration; petrochemical solutions; E-Bay style real estate trading; oil service fabrications; and refinery construction/enlargement. Such diversification is key to long term survival and investment. Stripper well renewal companies, the latest fad, need to remember that the price of crude oil is quoted in US dollars. The US dollar was taken down by Greenspan from 120 to 80 after 911. Now it is around 82, and the US Dollar chart looks bullish. Perhaps Buffett's new currency play will surprise many. The high price of oil in USD is what made stripper wells profitable. What happens if the US dollar has bottomed and its cycle is up? The Price of oil goes down, that's what happens. It could go down to $40 to 50$ just on the currency risk alone, regardless of the supply/demand dynamic. If it goes down too far, then oil from OLD oil fields becomes less profitable to produce. Look at the 1980's experience here in Texas.
But FSNR is primarily into natural gas wells along with oil and a host of other energy related endeavors. Now it even seeks a potential business indirectly related to gasoline: oil refinery construction. Lloyd Lane's vision is impressive.
My group of investors finds Freestone Resources an attractive investment for the long haul. Price will not remain in the .20's and .30's very long. VFIN cannot handle the size of the bid that is coming soon.
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