You aint kidding. I've been nibbling at it for 2 weeks with maybe 1/2 my position I want but with the stinky economy and a possible carbon tax being legislated in the next year or two (if I had to guess/speculate), I am not going to chase this. However, with the likely prospects of increased (and potentially) record revs coming in June and with the history of being profitable even with nat gas prices and oil much lower I feel fairly safe adding on dips. They're already trading slightly below tangible book value. Maybe because they've had declining production for 4 straight years. But the last few Qs they've turned that around finally. And proven reserves increased in 2007. Should for 2008 as well with the Tarrant Cty royalty deal IMO.
They don't have flow info though for the Tarrant Cty wells so I'm speculating it will be good based on the price they paid for the interest. I could be wrong. But they paid for it by borrowing money at 7.25%. That debt is now down to interest rate of 5.25% with the Fed cut. That 2% equates to about $5K a month in interest saved.
The Russia and Lea Cty missteps are behind them (expensed). And Lea Cty they might even be able to recover a little with the suit filed. Tarrant would be hard to see as a lemon since one well is already producing and it is in the Barnett Shale gas field in Texas. So well life should be for a decade or more. Not sure of the location of the well and if it might be in a residential area where there may be flow regulations/limits. I tried to reach CFO today to get some clarity but she's out until Monday. CEO wasn't in yet (he's part-time in a major way from what I gather and Tammy is mostly running things from what I gathered as well).
I don't mind stealing bread from the mouths of decadence... But I can't feed on the powerless when my cup's already overfilled.
-Temple of the Dog
"We didn't build this company on the sniff of an oily rag."
-Anonymous
AI
