It is somewhat meaningless that the "cash value" is 43p per share. The company has no production or income. So that cash has to continue to fund the company day-to-day costs, and finance the FOGL share of any future operations, drilling or sesimic. (and if the share price rices at all - a certain amount of any cash on hand needs to be accrued to pay for the share options that have been awarded to the directors). Until they make a discovery where thy can actually declare a reserves number, they have no other asset. So effectively the current cash funds are already spoken for over the time frame that it is likely to take to arrange another campaign and hopefully find something tangible this time. The shares are not undervalued - the market sets the value, and this is what it is.
Nice post. I agree that anyone getting in at these levels when the cash price is 43p is likely to make money without even holding through the next fully funded drilling campaign if they so choose. Cheap as chips. GL.
Amid all the bickering and contrasting views, lets be realistic about what the situation is here.
1) The current share price is undervalued (we all know) 2) There will be little action on the share price until FOGL make an announcement about seismic results/wells etc. 3) The current share price of 29.25p will be distant come this time next yr. (I expect around 40p range)
People who were in this share before results, can tough it out with the waiting game, getting little return for a period but when it gets closer to 2014 they will get some money back.
Secondly, you could decide to sell out at a loss, invest this money elsewhere, hopefully get a decent return and then invest back in here later in the year.
Anyone who is not in and is thinking of entering. This is a great price, but dont expect any blockbuster rises for a while.
We all want the falkland island story to come good, so we all need to lighten up and realise that this share was a gamble. Win Some Lose Some. I have lost a bit of money in here, but have averaged down at the current prices, and am now sitting tight.
I would like to wish all holders a happy 2013, and good luck with investments!
Hey I complained that here was a comapany which had so far failed to produce anything now rewarding its BoD for failure. As for incentive, to do what ? One assumes that being a Director is incentive along with the perks and salary is incentive enough. If they don't like that then they can leave the company their CV wouldn't look too healthy though. Drilled twice, struck nothing . That would not be likely to make them look employable Snouts in the trough I would say !
On the other hand conducting extensive 3D sesimics followed by 3/4 drills in the next campaign is probably exactly what all investors would want an oil and gas exploration company to be spending their 220 million on
I dont think that FOGL has a cash value as far as share holders are concerned. Money in the bank and money committed to it cannot dividi up, and passed out to the share holders. It is development money and and they will use that in looking for oil and if it all goes wthout finding anything commercial then bang goes your shares . A take over, of course, would see their money in the bank reflected in the SP, but Noble are hardly likely to sit on the sidelines and let their partner (hence their contract with them) be scatttered to the winds
This does look undervalued now considering cash value. Problem is they are yet to find oil, Can anyone tell me how many drills have fogl completed ? Not saying there's no oil but I think sentiment & confidence will only return when they make a discovery. That said I am tempted to dip in here, could be a good long term hold.
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