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FX Energy Inc. Message Board

  • Arktic Arktic Jan 6, 2006 2:00 PM Flag

    Cash question

    Gadfly, they have sufficient cash for several more exploratory wells ($35 million?). They have no debt. They have great properties (the Lugi and Sroda #5 do NOT condemn the Fences I, II, and III). Despite lies to the contrary, Hardman is still very much involved and Lucy Slater is reportedly available to consult with Hardman -they've been friends for a long time and there is no conflict of interest in her new position. I suspect (but don't know) that she has already reviewed the data from both the Lugi and Sroda #5 wells and has provided her opinion to Hardman about the next steps that FX should consider taking. Likewise, FX has proven reserves that can be sold for cash or can be used to securitize mezzanine financing to fund additional exploration and development. My best guess is that FX has been shopping in Europe for mezzanine financing since the Sroda #4 was drilled. Mezzanine financing is not dependent upon the Sroda #5 being declared commercial, which it still may be. There are sufficient reserves in the Sroda #4 structure to secure significant mezzanine financing.

    Put another way, if FXEN were a privately held company (not publicly traded), the Lugi and Sroda #5 wells would be disappointing but would not be considered catastrophic. There is still some hope for the Sroda #5 and the Lugi provided valuable data despite being non-commercial. As stated previously, the Sroda #5 may or may not be declared commercial.

    FXENHELL has never declared his position on this board and he accuses me of having no "balls." Me thinks thou doest protest too loudly! I agree with others that he's probably a short (or hired by the shorts). I doubt that he's a disgruntled long like many others who are dealing with their disappointment. But wait, maybe he's an Eagle Scout who is trying to protect God, Country, and us too (yeah right...). He certainly has been able to make hay from brine in the Sroda #5 gas. But he is completely wrong to presume that FXEN is out of the game. It most certainly is not. At the current prices, for long-term investors, FXEN is an excellent buy. The question I ask myself today is not how much value have I lost (lets not go there again)? Rather, the question is, based upon everything that is known regarding FXEN, is the current stock price a good value. Despite feeling shell shocked from yesterday, I believe FX is a great value at today's prices. Of course, there may be some fluctuation as the dust settles from yesterday. But the shorts' prediction of the demise of the company (GTZ, etc.) is driven by their agenda, not by FX's value and propsects.

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    • 10Q at the end of September, reported position was about $29 million of liquid net assets (excludes accruals, inventories, includes receivables and payables). 3+ months have passed, so they have incurred their normal overhead costs plus the cost of the two wells as hits to their cash position. Would not be surprised if the next financial statements published show a net liquid position in the $23 million range.



    • I would use some of the cash to get Lucy back. I wonder how much her expertise is missed.

      Hang in there better days are ahead

    • FXEN finally had its long overdue balloon popped.

      Time to get down to reality and get the share price down to a level where fundamentals support the price, not just hype and wishful thinking.

      Low $5s may be a decent entry, but it wont see $10 again for a LONG time.

    • >> they have sufficient cash for several more exploratory wells ($35 million?). They have no debt. <<

      I think the cash number's a little lower, about $28-30M - still plenty for a fistful of other wells; and as you say, financing will be easily available when they need it, some time after the first two wells are hooked up and selling gas in 6-9 months. Banks will fall all over themselves to lend based on assets like this.

      The cash and liquid investments number in the November 8 press release (giving Q3 numbers) is $28.7M, plus receivables of $2.8M. They've spent a bit since then, but also have taken in some. In Q3, they had revenue of $1.07M for oid and gas sales and $1.43M for oilfield services.

      >> I agree with others that [fxenhell is] probably a short (or hired by the shorts). I doubt that he's a disgruntled long like many others who are dealing with their disappointment. <<

      I think you're plainly correct. He posts a dozen times most days, distorts and misrepresents the facts, makes up a lot of stuff, especially about the legal situation. Mere anger wouldn't be enough to prompt this; or if it were only anger and disappointment, we'd see more signs of serious mental illness. No - he's smart, unscrupulous and hardworking. Plainly a basher, presumably for his own profit in some way.

      I noted that fxenhell makes up a lot of stuff about the legal situation. This lawyer says there's no class action here, and no serious threat of trouble with the SEC.

      IMO: There's no viable claim of a securities violation (except by making up the facts), and even more importantly, the potential damages in such a purported class action would not be enough to attact a plaintiff's class action lawyer. His fantasy of a floodtide of class action lawsuits is complete BS.

      He knows that most non-lawyer investors routinely overreact to fear of lawsuits, so he rattles that sword. It's nonsense, but it's helped to drive down the price. I added a bit to an already full position earlier today, at $5.75

      • 2 Replies to RCMac98
      • Shills are clever but easy to spot.Whenever they go through a long diatribe of trying to sound sophisticated,and then follow it up with "I added" you know you're most likely encountering a shill.These blowhards have added all the way down from 12.Is there something wrong here?

        Something indeed imo.

      • >I noted that fxenhell makes up a lot of stuff about the legal situation. This lawyer says there's no class action here, and no serious threat of trouble with the SEC.<

        1) Not inventing, just opining. Dutton is the red flag, in my opinion. Three days before a major duster, they give a strong BUY rec to $17. Dutton's been in trouble with the SEC before and is cozy with FX. What kind of a lawyer are you that you would ignore these facts? Come on, counselor, it doesn't pass the smell test. The SEC has investigated companies for much less than this.

        2) I lost money on liquidation of my FXEN position and have not traded it since.

    • Professor: As you know, Freud once said, "Sometimes a cigar is just a cigar." I have declared exactly where I stand vis a vis FXEN. I believe current top management should resign forthwith for the good the company. I also foresee troubles not related to the issues of gas exploration afflicting this company. This is only my prediction, but I think it likely given the mood of angry stockholders.

      As to your situation, it's startling how uncritical you have been regarding management and how blithely you accepted a) their utter disregard and defiance of stockolders re: "stock grants" vis a vis the clear NO vote to same and b) a continuum of insider sales for years. It seems they have rewarded themselves more than handsomely while ordinary stockholders got the shaft. This is not to mention that you have indirectly cost many people hundreds of thousands of dollars by incessantly touting this stock from $16 all the way to $5. What did you say about paid shills?

    • You're FX Management and you want to show the universe that your company is a world-class E&P outfit. So you choose your opening drill location where the opportunity is the greatest. And as we painfully know the results are "disappointing."
      How can they restore investor confidence and credibility?
      How do they explain the huge selling prior to their press release?
      How is it that there have been no open market buys by the FX management team?

    • Thanks! I don't feel as confident as you concerning the ready assets. And, Ark, I'm also not as confident that mezzanine financing is available without CF. As you know I have been advocating for funding now - not later. Let's hope that is the case. Scott is not taking my calls or return e-mail and that disturbs me.None of my questions ask for violation of reg FD. A conference call IMHO is called for. I don't countenance whining or blame. I want true facts available in special times. The S-5 was to be Hardman's best pick and that causes disappointment - not despair. Back to the drawing board. Have a good one...

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