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  • steve_ogrady steve_ogrady • May 6, 2008 2:12 PM Flag

    IMO, The Development Of Their Holdings In Oklahoma

    will make or break this company. The Oklahoma leases are from "conventional" production fields which hopefully will mean the cost of production will be lower and the gross margins will be higher. Right now AOG holds the rights to almost 33,000 acres in the Oklahoma fields.

    The questions that remain to be answered are:
    1.Do they have enough capital to bring theses properties into production?
    2. If they do have enough capital will the price of natural gas hold up long enough for AOG to realize the full benefit?

    One last question. What are the chances that AOG is holding off on ramping up production until the hedges they have work their way off the books?

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    • carchandco51 carchandco51 • May 6, 2008 5:06 PM Flag

      steveo-the Woodford Shale is far from conventional. The successful companies are spending about 6-8 million $ per well just in drilling costs. AOG should be doing well in their current territory, I didn't know they were hedged but the local price was well above nymex several months ago. To think of a 45M$ company coming up with operating funds to drill one well in Ok. is a longshot when they can't seem to hook up the shut in wells they have already drilled. I'm long and in the red bigtime