DXI Capital Corp. (DXIEF)

[Harold33272]

SOUTHPEN is correct.

I don't think there is any question that Hodgkinson is building this to sell. And Dejour is and will continue to be more of an exploration company than a production company. The company - outside of a farmout or JV - does not have the funds to be a production company such as a MHR or a NOG.

Hodgkinson's MO has been to build up small cap oil and gas companies, prove up acreage/assets, then facilitate a merger or a buyout. I think that'll happen again. It's just a matter of when and how much. And will it encompass the company's Piceance Basin acreage or the entire company? I think the more likely scenario is the company's Piceance Basin acreage, which is basically the bulk of the company's assets in Garfield County (Kokopelli and Roan Creek). I also see no scenario where this is done until the farm-in partner completes at least one horizontal (to prove up the acreage) at Roan Creek and until the horizontal (mancos) is done at Kokopelli. It would be foolhardy for Kokopelli to be shopped until this was done, because a successful HZ could more than double the overall reserves.

I think late 2014/early to mid 2015, the company will be in a position to entertain some legitimate offers for its Piceance Basin acreage. The economies of scale are simply too great, and the company is in an outstanding position with so much of its Garfield County prospects directly situated adjacent to BBG, WPX and ECA.

I'm holding until such a transaction is made. When and how much, we'll find out. But I think late 2014/early 2015 is a reasonable timeframe.

Gun to the head ... I think when it's all said and done, WPX absorbs Dejour's Piceance Basin's assets within two years.