Replies to post #1381 on Daybreak Oil and Gas Inc (DBRM)

[maverick one]

#1 IMHO the Two Triangle Report was about as uninformed as you can write something without writing something. Glad you picked up on that doozy. Reminds me of Seinfeld how they can make 30 minutes segments about nothing...the exact premise behind Seinfeld. They sure didn't specifically give us any CONCRETE REASONS NOR DETAILS as to why they thought it was worth a dollar did they? Why is that? Don't you think we would question how the author of this report came up with that number and quantify that for us on their deduction of reasoning?

For market awareness maybe? Whatever that means...that can be interperted many way different ways.

#2. Any company is going to hire an accountant that reports and with any increase in revenues will be charged against any production costs and infrastructure. Not saying they are doing this or going to do this in their future filings I have no idea. But, usually companies do not want positive booked earnings. Govt nails you for it...called taxes. Which is a wash if they pick up more production of barrels which they have done. They easily could charge it off. IMO they will not be going to show more cash because if they did it's called taxes on their revs. Like me owning an 100 apartment units I am going to show a loss on my apartments with maintenance, vacancies, 30 year straight line depreciation blah blah even though I am making lots of cash on my return on Gross and Net. They just got done building a $800,000 oil facility then you have the cost of new exploratory production. If anyone thinks for a minute that this will all reflect in revenues positive balance sheet doesn't know what they are talking about. Sure revs will go up so does their expenses. It's a wash forever until they change that...quarter after quarter year after year one carry over from another.

#3. The shares and it's apparently fat fingered selling. Hire Inspector Sherlock Holmes.

Other than that it is a great little JV no doubt about it. That's why we're all here. Sitting out in the toolies popping 50 BOE and set them up on restrictors with the possibility of upping it. Having a major and I mean major heavyweight oil concern partnered with Daybreak and it's partners. Sure that's a big benefit. But, I want to see like I mentioned Chevron taking the iniative and drill some of their own exploratory wells on our prospects since DBRM drilled on theirs and increase our BOE with their money and crews. Who knows if we'll see that happen. If it doesn't happen no big deal just like to see them reciprocate. In the meantime, we're popping black gold I am down with that. We're priced cheaply in pps .10-14 range with some decent volume. So there is interest here and it will only go higher as we pop more wells.

I just don't drink anyones Kool Aid. If you tell me it's worth in your opinion $1.00 back it up with specific details as to why. My evaluation of a quarter you ask. Because that's what I pegged it at based on my own valuations and calculations. How I came up with those numbers I'm not going to divulge. But, I have based it on my own DD and Daybreaks. If anyone is pissed off at me because I am poking holes in peoples theories then tough beans. If it runs to a $1.00+ that would be a great deal no complaints there. But, how do they do that in near term with $800K in construction and material costs just for new facility alone? That doesn't include any exploratory production expenses either. I just don't see it happening. Of course, like always I could be wrong which easily could happen. What do I know... I just don't believe usually about 25% or less of what people pull out of their wazoos.

GLTA Go Daybreak and pop some 100BOE.

[downsideup]

"DBRM's production and revenue progress will be the only thing that really drives this up."

I agree. The company isn't really focused at all, like a lot of smaller companies are, on pumping the stock... they are instead focused on performance, and having the stock do what it will do as that performance is delivered and recognized. It will take time for that transition to occur... which we've discussed here plenty... but, we've seen proof of performance on every element in their execution of their plans thus far...

They deliver, as promised. They don't control market prices for oil, or what the stock market does on a given day... but they do a bang up job on those things they are responsible for.

Management is # 1... and I don't know a company with management that I trust more. That is true NOT because I've randomly decided to trust them blindly... but because they've more than earned it... by being honest, and doing what they say the will.
They've also pulled more than a few rabbits out of hats already.

I appreciate and respect that... but, more to the point, value it.

DBRM clearly is undervalued, even as it seems they are given zero value as an "opportunity", much less given the facts in what they ARE delivering now... and the reasons for that persistent undervaluation are plain enough. That is EXACTLY what I look for in companies in which I invest... given my focus and approach are that of a value investor.

As far as the myopia of the market, and how much I let that bother me ? Well, I've noted it before, as when COGC was trading at share prices higher than DBRM... how stupid the market can be. I'll not make the mistake of assuming the market is more right than I am about value... when the market has many actors doing all they can, full time, to try to confuse the issue of value... with price.

DBRM is one of VERY few in a very large number I look at, that passes my effort in DD. That doesn't eliminate every risk... but, IMO, it does shift the odds tremendously...

What is that worth... a management that does what they say, and can be trusted... who also happen to know what they are doing ?

Easy enough to find people who don't think, or who don't do the work in DD they say they do, that will say mine isn't a proper approach to investing in small stocks... given the risks they pretend exist as a function of which exchange an issue trades on, etc. I'll let them argue that with Peter Lynch or Grahm and Dodd.

Of course, they are wrong... not necessarily about the risks in "most stocks" in a genre, etc., but certainly wrong about their own approach applied in excess in generalization... as a result of being lazy.

[Lebaneseproud]

Not bashing anyone

[downsideup]

Hmmm.

I think growth curves, and stock trading patterns, both, may tend toward the non-linear in the nature of their features...

So, for instance, pick a number you expect they might deliver in production soon, following completion of the current round of drilling, and completion of the production infrastructure...

From an average of 20 to 23 BOPD produced in the last two quarters... what do you think the next two quarters might look like... and what would the purely linear function of doing that math describing that change, say about the probable non-linear impacts they'd be likely to have reflected elsewhere...

What will 375 feet of horizontal pay produce ? Hmmm. Just guessing, but I think 27% of that will be more than 23 BOPD.