The rights offering was extended to April 12th. Reason given was not all the people entitled to execute the offering received notice.
Today is march 22nd leaving 20 days to take advantage of the offering. The price of a share at this time is about 3 and 1/2 cents + or - and the offering price is 7 cents about double the current price. Why would a person buy at 7 cents when he could buy at 3.5 cents?
Good question and there are good reasons, also keep in mind that there are 20 days to go before the option to buy expires. In that 20 days a lot could happen. Strictly from a financial personal view it doesn't make much sense to pay double for stock or does it? The 7 cents goes to the company for drilling the 3.5 cents goes to the seller of the stock and does nothing to protect your own investment. Also consider if you are a large shareholder say 2,000,000 shares and you can buy 1,000,000 shares at 7 cents. If you put in an order for a million shares at 3.5 cents do you think you could fill that order? I don't! At 7 cents you have a chance but still questionable, but under the plan its guaranteed. Now look at the other end, the reason for buying in the first place. To make money! not a few cents We are looking for oil and the value of the stock at theis time is about $11.00 a share + or -. So a million shares is worth 11 million dollars and a cost at $35,000 at 3.5 cents or $70.000 at 7 cents. its a difference of $35,000 with a return of $11,000,000. Its a drop in the bucket. Actually I low balled the number because the Flare gas is worth that much without oil or gas.
There is something else to consider. There is a follow on 30 day period to pick up the un exercised shares. This is open to the people who had rights on a proportioned basis. That now extends the period to 50 days.
