Jagman states: "Some of the Pinkie oil companies are actually money making enterprises, but dump shares to buy new equipment, drill a few more wells, or acquire leases....just Mom and Pop companies using shareholders as an ATM... I suspect ALRY and HMGP of being a couple of examples of those..."
Well Jag if the above in not calling the kettle black!!! With emerging O&G companies such as EDEX, ALRY & HMGP:
If a company such as HMGP that currently remains debt free, maintains a consistent business strategy, using additional shares to buy new equipment, drill more wells and/or acquire new leases and you believe that this is an example of a company using shareholders as an ATM???
Have you ever heard the saying:
"Grow the assets, expand the business model, grow the revenues, increase the potential profits down the road".
First, these are emerging O&G companies not Blue Chip Exxonmobil's established companies of the world. Of course they need to raise capital to acquire business requirements such as equipment, leases and more producing wells.
IMO companies that use the shareholders as ATM are companies that built up DEBT (and alot of it) very fast while changing its business strategy and direction like the wind and have no going forward business vision.
Come on Jag if you are going to make such a statement use a better O&G example; but to use ALRY & HMGP and I am assuming EDEX too, man this tells me the following:
1. You have not done any in depth "cradle to grave" O&G DD, certainly not on these two companies ALRY & HMGP and probably EDEX too..
2. You really have a bone to pick regarding the O&G industry specifically EDEX, ALRY & HMGP.
3. Yes you are a Momo player and therefore should probably stick to the charts and not provide input from the business perspective side of the equation.
Kels
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