Cross Border Resources, Inc. (XBOR)

[Ed Ajootian]

See a great report that Enercom put out on Cross Border recently at http://www.oilandgas360.com/crossborder/103111_XBOR.pdf . The author of this report obviously understands the oil business and its clear that some thought went into this report. They conclude that XBOR's current NAV is somewhere between $2.16 and $3.82 per basic share, figures that are significantly greater than the current quote.

From the report we can glean that XBOR has recently completed 2 more Woflberry wells, in which they have a 20% W.I., and if memory serves, as of the 10/20 ops update they still had yet to bring on a previously drilled Wolfberry well in which they had a 10% W.I. in . So by now they should have seen IP rates for essentially a half of a Wolfberry well, net to their interest. In the report they estimate that the average Wolfberry well should come on at 110 boepd gross, so if I'm right about this stuff figure about 40 boepd of incremental production net to XBOR for these 3 wells. Given that 3Q average production was all of 308 boepd it would seem that a 40 boepd ramp in production would have to be considered "material". It will be interesting to see whether they try to hold this info out until they announce 3Q or whether they put it out sooner, say right before they present at the Redchip conference in NYC on Wednesday. One thing they might decide to do is announce October's average production, which is almost certainly lower than what the current run rate is, in order to save some of the fireworks for the 3Q earnings release. Doing it this way ought to dampen the impact of the "sell on the news" crowd, since we all would know that better news is just another week into the future.

The stock has now traded over the April PP issuance price of $1.50 for the last 9 trading days straight. I'm still not ready to declare victory but if its still over $1.50 by the end of the week I would say that we finally chewed through the financing overhang.