OEDV- a nice response from Ed over on the boom boom room board S Investor From: Ed Ajootian Osage Exploration (OEDV) -- the presentation for this Miss. Lime player at Sidoti brought in a massive amount of buying, moving the stock up about 25%. They just did another presentation yesterday which can be viewed here, noble.mediasite.com .
If someone looked at this stock in the past and did not buy it due to the fact that they did not operate the majority of their acreage, they need to look at this again. It appears that the original operator of Osage's acreage, Slawson, tried to drill them out of the play but in response they were able to negotiate a partitioning of the acreage, giving them operatorship over what they believe is the most prospective pieces of it.
As a result of Osage now having operating control of most of their acreage, they can now slow the pace of drilling to a pace that is more commensurate with their cash flow and financial resources. For example, for the current quarter they expect to spend just $3.4M for cap ex as compared with the $7.2M that they expended for 3Q of last year. This ability to control their cap ex spending should now allow them to refinance their current mezz. loans. I expect this to happen sometime in the next 2-3 months.
They will lose some PUD reserves in the '13 year-end reserve report due to not participating in some of the offset wells in the part of their acreage that remains Slawson-operated, but that seems to be a fair price to pay for getting more control over the pace of future development of their play. Although they are only going to drill 2 gross (1 net) wells this quarter, one of them is going to be very significant due to the fact that it is targeting the Woodford shale. A successful Woodford well would have a significant impact on their stock price.
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