It's financials and its overall body does not look good........yet. Right now it is trading at its reversal point and the numbers don't support any reason for a rise.......yet. Now that could and would change IF they hit something big of course or do a deal that alters their make up but for now I still see the stock as HIGH RISK and therefore not a suitable investor for any one but those willing to assume the risk. It does seem still to be a great trade stock as it is operates quite consistently within its channel. Just a point of view of course but it does appear to be strongly range bound with no catalyst YET to drive it higher. Boolean
I don't agree with your high risk assessment. IMO it is low risk because the share price is so low compared to the value of its assets.
The oil business is being monetized in a normal time frame. Just as it's taken a couple of years to bring half of ESTE's Statoil wells on line, it will take some time to bring the Buda wells online. Last quarter, 10 gross wells of 40 (long term potential of 80) showed production results. Two more are acknowledged to be showing production in Q3 and a total of 15 are expected online by year end. At the beginning of August, it was disclosed that the last 4 Buda wells were extreme winners.
The mining business is more confusing. But it seems management is trying to bring it to resolution. When they do there might be a significant one time windfall. Despite this, there is plenty of cash to keep the mining project going.
So we won't count some significant wells coming online as we speak, and pretend that the stock will keep on ignoring the news. It might, but at some point, the increasing production is going to attract attention. The economics of the field have been referred to by the operator, Contango, as the best returns they have in the portfolio. All the wells have been paid for by cash flow, even though they have been operating for the most part, less than a year. That means development of this field is self funding. Even ESTE cannot make that claim. No debt needed for this field, do you have any idea what a luxury that is?? Pretty much guarantees that Contango will develop the field
If fact, if they came going, the BUDA wells may also fund the eagle ford wells, and Contango thinks it found a way to increase the average flow rate in each well drilled from now on, and they have reduced the drilling/completion costs in the process.