I agree that natural gas can add to their revenues but it isn't the majority revenue stream. The focus here is pumping oil. Some of the gas they extract can be used for pumping operations and mitigate costs to produce. If they can rework wells to produce that much I would be very impressed with them. I am not so optimistic.
Although, I do know they have hedged their production to address the risk to their banking facility. That means that if oil does drop, Armada could end up with a big gain on one of their oil contracts. If the price of oil goes up, it can also make money off the oil contract. Right now, to me, and what I think Armada is doing is just making sure cash flow is stable and revenue/operating cash flow is intact.
I figured they had to come up with money at some point but I was hopeful their was a market for this stock and new buyers would have come in and moved it higher....that could have made a convertible very attractive and we would be ok with it. Now, there will be a larger conversion likely to raise the kind of money we need.
If they do put anything more than 40% of the outstanding shares on the line, it is a win or lose scenario we should look at. If they are successful in rework/recompletes and new wells---everyone wins. If anything fails, the debt holders could end up with the company.
I still believe manipulation is what caused this to go lower...no reason to short this even a market maker for that matter...plenty of shares they could have bought to loan out...no need for naked shorting or other broker tactic to put shares out there that don't exist. This is all my suspicion I do not know for sure.
good luck.
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