KOG went public a while back that it should turn cash flow positive this year (2014). Plus, 2014 will see some good growth in production. Looking ahead, what will KOG do once it has achieved its capex target and CF milestone? Will it diversify its plays (kinda don't think so), or continue to grow in the Bakken? Either way, what is the next step or is there a take-over scenario? What does the Board want to do? Is a valuation that makes sense? Thanks... and good luck to all.
Hey WinGoat! Why do you continue to bash? You realize that are 7 analyst rating strong buy, 5 hold... ZERO Sell... So do you think you're smarter than 13 analysts? Really? Your bashing is getting old....
1- Only around 10% of their acreage is in the Proven/Producing category where it's actually counted as an asset on their balance sheet. (And on this board!)
2- Becoming cash-flow positive by mid '14. (This is the plan, we'll see if it happens before or after that time.)
3- KOG's acreage is on the Anticline, which is arguably the best oil find in the country with the best quality of oil for the market!
4-Virtually all of KOG's wells are ceramic wells for the best and longest lived reserve values.
5-Most if not all of KOG's wells tend to be in the highest pressured zones.
6- Additional infrastructure such as water disposal wells will only enhance KOG's properties making them even more appealing to a major oil company. Ergo: A turnkey proposition!
What's the point of selling out just on the verge of being noticed as a self-funded exploration and production company with these things going for it?
A quick buck for passerby shareholders? I don't think so, these guys are thinking value and lots of it in whatever time it takes to get the job done without risking the company by taking shortcuts.
One quarter at a time, the finished company unfolds on the balance sheet and we Longs can and will wait to see KOG as a double, then a triple and finally when at least 30-35% of their acreage is in the Proven/Producing category an offer to good to refuse will be accepted in a heartbeat. I doubt that will be under $40-, but who knows, we'll know it when Peterson says "SELL" and not before.
Symon: I enjoy your long term perspective and related posts, but can I ask a question? I have seen you repeatedly remark about your point 1 note above and the fact that only 10% of KOGs acreage is in the proven category. Can you explain the source of this comment? Maybe it is just me, but the point seems a bit incongruous with my understanding that KOG is focusing its drilling on its most productive acreage because substantially all of their leases are now held by production. Stated otherwise, how can 90% of acreage be held by production, but only 10% be considered proven/producing? Thanks for helping me understand this. Lex