Replies to post #23761 on Treaty Energy Corp. (fka TECO)

[coolnapz]

Well, what would happen is that the analysts will build a model that discounts the 1,000 bpd. It's probably not going to be a complete miss, so let's say that they give it a 50% haircut. Well, that's still a 1 cent EPS giving us 15 cents on a discounted price of oil.

I had to do a ton of revenue forecasting at my old job and that's really the way it works. For instance, a bank will not wait until it receives the interest payment to price a bond, they will price it based on expectations. If expectations are met, the price rises, if expectations are not met, that's when you see the dumping.

I would think that the model forecast I described would be base case for those interested in investing in a penny oil company, because at this point we don't have a lot of hard data to model the Belize strike, which is why I would say it would at this point serve as a P/E multiplier.

I'm not an oil company investment banker, but that's how I think they would approach it wearing my old analyst hat. However the chart trader in me says that we're going to clear 10 cents on news, and that based on last April's move of 1100% that it is entirely inside of the realm of possibility to hit that again this quarter and that would definitely take us to 30 cents.