I appreciate this post. It is an excellent post. This is why I continue to watch the board and use iHub in general, because of posts like this.
However, I still do not agree with the Chester property purchase. Yes, it is an excellent purchase at rock bottom prices, and this is obviously an excellent time to make such purchases, when one considers that the entire market is under excessive pressure. I do not dispute that at all.
Nevertheless, my thought, which I would never pretend to think holds much weight here, is that you save money for rainy days. Typically, it is a good idea to have some cash lying around for purchases in unforeseen extreme circumstances, such as the current market state. My perspective is that we have no such cash cushion and that we are barely getting by with our future plans. If I felt we did have excess cash lying around to bottom feed, I would greatly applaud the purchase.
What I see is market conditions that will put extreme pressure on our stock in the next year. We have another round of drilling, which is great. If we hit something, which is certainly plausible considering all of the great hits we already have, buying the Chester property will turn out to be a great thing.
On the other hand, if we do not hit anything extraordinary, another private placement will be required, and we will be sub 0.05 in probably 6 months or less.
To be more blunt, the brilliancy of buying Chester hinges on an extremely risky outcome. That is the problem I have with the decision. Consequently, it increases my risk, and I have to scale back my position to accommodate the risk.
I do hope for the brilliant outcome, of course.
