Dejour has real assets and real value within its asset portfolio, but as SOUTHPEN has pointed out, there continue to be questions and fair criticisms of management and the manner with which it has handled numerous situations over the last several years.
Make no mistake, I fully expect for Dejour to have at least two additional rounds of dilution in 2015 and into 2016, largely due to funding the needed 3D Seismic for North Rangely and for the mancos at Roan Creek. This all means that in an 11-year span (from 2004-2015+) the shares outstanding for Dejour will have likely more than tripled under the direction of Bob Hodgkinson. In other words, I would expect Dejour to be sitting at roughly 240-270 million shares outstanding within the next 15-18 months.
No one likes debt, but at some point we've got to stop "giving away" these assets. If we'll play our cards right and pull some cash flow from the additional revenue we will receive from the 2014 8+ well program at Kokopelli, we could very easily go in on our own at Roan Creek with a couple million and borrow $2-2.5 million to facilitate the drilling of a deep vertical into the mancos. If the company instead brings in a JV for Roan Creek, issues a release that essentially states that the JV partner will claim 70-75% of what comes out of the ground, then it's going to be difficult for me and a lot of shareholders to get excited about that. At some point, Dejour has to start standing on its own and putting much of what's in the ground into its personal coffers.
Dejour can push its current market cap up by several multiples with a mancos at Kokopelli, a mancos at Roan Creek and of course development at North Kokopelli. Personally, I remain extremely skeptical of the company getting anything done at North Rangely over the next two calendar years. It's just far more speculative than Roan Creek and Kokopelli and for the better half of the last two years they tried to fish a North Rangely JV with a 50% WI (as a starting point) and nothing materialized from it. I suspect numerous drilling funds and several mid-major players also are skeptical (of the potential 1 billion+ recoverable oil at NR), otherwise surely by now we would have had something done.
I like the story at Woodrush and I understand why the company had to do another round of dilution to facilitate the capex and to absorb virtually all working interest. I think Kokopelli and Roan Creek could be cash cows for the company for a long, long time. However ... management has got to do a better job of protecting the stock price. Hodgkinson, by his own admission, does not prefer a reverse split. But personally, I'd love to see a 5-for-1 in 2015 after we've got additional cash flow and become a positive earnings per share stock (which is extremely rare for a micro-cap energy company). I would prefer the share consolidation because I believe it would put us in a better position to pick up additional institutional ownership, most of which won't touch a stock under a dollar. The more institutional ownership we've got, the more "big money" we've got on board, it'll provide somewhat of a floor under the stock price. Following several quarters of positive EPS would be the perfect time to give strong consideration to a share consolidation.
Hodgkinson is a 65-year old man, he is the leader of this company and he's got decades worth of experience in this industry. I think it would be quite beneficial for all involved if shareholders heard from him, such as a letter to shareholders on Dejour.com. Something. Anything. Just color, insight, his vision, his plan and with a little bit more detail than the broad, cryptic verbiage we receive in some of these releases, which leave a lot open to interpretation. When you've got a stock that is dominated by retail investors, you've got to be on top of communication and that is an area where the company - by any measure - has fallen short. We basically had to beg to get management to do the last conference call. And that shouldn't happen with any publicly traded company. Should Hodgkinson do this, I believe it would build goodwill with shareholders. And I've requested this several times.
All in all the company is in far better shape today than it was two years ago coming off a bottom in NG prices. No one can say that the company is in financial distress. So the outlook is improved, but as we all well know the ONLY thing that matters at the end of the day is the stock price. That is the barometer by which all CEOs must be judged. Keep diluting and it will become increasingly difficult to move the needle. The progress and subsequent additional BOEPD from Woodrush and Kokopelli will ultimately get baked into the stock price, but there are other measures the company can and should take going forward to protect the stock, IMO.
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