Not sure what LGO production cost is, but plenty of the North Sea ones are under $30 - obviously it is the operating cost per barrel (and including cost of replenishing reserves etc) which bumps that up a lot higher, but that is the same for all companies. I'm only trading at the moment, both long and short on a few larger companies, and not going too badly - just watching the oil price closely.
I suspect onshore vs offshore costs (direct and future) probably answers a significant chunk of why it appears crazy to you. Having said that I'd been tracking a few in the recent rout and didn't pile in (annoyingly) before they all (largely) bounced.
Agreed. But still looking like once in many years type of opportunity with very not so big downside considering what I lost on companies like BLVN/XCITE. Small money can be left there for 6 months just like in saving bank account, any sniff of punt land and it will be a dream come true, little bit like REM. At worst you could lose 20-25% from current level in one year.
Just seems a crazy market cap to me when you look at some other producers and how far they've slipped with lower oil prices (even the likes of Trin, although does of course have some more expensive projects and recent negative drill result that was very expensive didn't help). For instance you have the likes of IAE at less than double the LGO market cap, and even something like ENQ at only 2.5 times - which to me seems crazy and i know where i can see more upside that's for sure!
gary - It's very hard to tell. I think the lack of improvement in SP after recent RNS's reflects this. I'm extremely skeptical of the numbers being put out as they fall well into the "too good to be true" category and I'm doubting whether the flows will reflect in the bottom line over time or disappear to nothing quickly, be repeatable across their acreage, etc I'd love to believe it's as good as the "headline" stuff would appear - as frankly the better they do the better Range's prospects with huge acreage around them - but all that glitters springs to mind. Hence why I say I think their current SP is struggling to progress more.
Garyn, I agree. LGO has been priced on growth prospect and bit on hype. They have however made REAL progress unlike the pure jamorrow here.
Having said that, it would probably take a duster or a big production disappointment and it will bring it crashing back down once market wakes up to the fact that maintaining that sort of growth is very very difficult. I could of course be proven wrong and we could see LGO at 10kbpd in a year but I doubt it? Lol
Not sure how much drilling RMP will get done with circa £5 million in the bank and the current SP not being a great level to raise more at - I see them as likely to end up in some sort of EFF agreement!
Invest in RMP then. I'd rather not. ;) You might get lucky with a punt - who knows! Let's say Puntland and Georgia go nowhere, which is easily possible, you have $5m to run and finance another project. How much is that project going to cost. Is the remainder enough to fund it? Etc. That's another matter though.- for the RMP board.
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