In case you haven't noted it your research, and for the benefit af any other new "eyes" on the board. What Blackrock may be seeing is:
- New management and staff on board since 2009. Highly respected industry professional replacing a CEO with no real experience in O&G exploration.
- 77% interest owner/operator of one of the largest offshore concessions in the highly prospective west Africa transform margin. With Dana/KNOC holding the remaining 23% interest.
- Good working relations with a more stable government and democratically elected leader in Guinea.
- Acquisition of additional seismic data on the concession including 3D on the shallow water portion with deep water 3D in progress.
- Identification of numerous leads and prospects within the concession (this is no one trick pony) All independently reported by NSAI with substantial unrisked reserves.
- Elimination of toxic financing carried over from previous team and additional funding guaranteeing the drilling of 1 , probably 2, wells and acquisition of 3D seismic on the deepwater portions of the concession.
- A $10 million deposit on what management describes as a "transformational deal". Although there are numerous contingencies.
- Spudding of the first exploration well in 4Q of 2011 on a prospect with over 200MMB unrisked estimate. This completed all work requirements of the exploration contract through 2011. Company is nearing completion of all requirements through 2016 and still moving forward with additional work plans.
These are just some of the highlights. Much more and detailed information is available in the stickies at the top, and on the company website.
This is a spec play, certainly not for the nervous investor , with a high risk/reward ratio based on available data.
In many respects it should be looked at more from the perspective of a startup exploration company from 2009 forward. While previous leadership made some progress, the company languished with toxic financing, contractual and governmental relations problems, and questionable business decisions.
Hope this helps, if you were just making smart comments about the no revenue aspect of the business, you’re probably looking at the wrong type of investment here.
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