Friday, June 07, 2013 10:55:54 AM
Tag completed a major infrastructure project in April 2013, which made the company completely self-sufficient in producing, processing, and marketing all oil and gas it drills.
Based on the recent stock performance, many investors appear to be willing to sell Tag and move on to the next play. The stock dropped ~50% last week, and the pendulum of sentiment for Tag has swung back into negative territory lately due to the fact that the company's production was well below the initial corporate estimates. The production came in at 2,700 boepd, way below the expected 5,000 boepd management was guiding for after the completion of the infrastructure expansion. Can the company turn things around and improve the current ugly stock performance?
The catalyst:
- Tag Oil has over 1.7 million net acres in the East Coast Basin which is an unconventional play with oil-rich and naturally fractured formations that have many similarities to North America's Bakken formation in the Williston Basin.
Tag Oil is currently drilling an exploration well in the East Coast Basin. It is a fact that the exploration wells are inherently risky. However these wells also carry a high-impact upside which cannot be taken off the table in the near term, and Tag Oil has enough money to test more than one high-impact targets in that Basin. A new discovery in the East Coast Basin has the ability to alter the face of the company. The first signs are encouraging, and the final results are expected in July 2013.
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