I still have my 10K shares, ahead of the game and I pretty much still think this is undervalued, but I am starting to think that this is acting more like an Energy Trust than it is a stock.
Lets face it they have 5 years worth of drilling inventory. As some say get the rigs going and use that money to get the production up and get the stock rolling. That's not a bad idea, but what are they going to do in a few years other than watch their production deplete 15% a year when they run out of wells to drill? They simply cannot do this because they want to keep things steady, report excellent production while compared with their market cap / other E&P's and the company rolls along with the fine dining, executive privileges, salaries etc. Most value investors will be happy rolling along at 5% a year in dividends knowing the success of the wells and a least risk involved with the Hunton and they will probably collect the divided for 10-12 years out.
Now if today, tomorrow a month a year or so they announce they are going to acquire a bolt-on property I can see the messages fly because the company has no business acquiring new production / properties, been there done that sort of mentality. So unless it is a sweeter deal than what they have going for them now that will probably not happen.
So the last and final scenario I can see is that EQU is acquired by another company. This to me makes the most sense for it is really their only viable option going forward. With Gastar and New Source, Atlas and others out there snatching up smaller E&P's in the Hunton I feel that is just a matter of time before it happens. The big question is how much will they pay knowing there is a 5 year drilling inventory 15% depletion rate, etc, etc is the question of the day?
Of course all of this is IMHO, but I feel that being acquired is the best shot individual investors have today.
We are right on the cusp of a significant technical breakout -- a multi-month cup-and-handle formation. What we need is a fundamental reason for the breakout, (on volume), to occur. If these bozos in management would release some positive fundamental catalyst, we would be on our way 4.5 - 5.
Of course, Klapco, et.al. are oblivious to any of this.
Can't wait to get out of this stock and wave good-bye to these jokers.
another way to look at it ,an offer of 4 dollars was rejected by the bod hence how to get them aound is probably offer 30% more it the bidder wants to have a chance,another look again is what if mr klapko goes in retirement ,probably his best bet right now ,next year there is no chance he gets the votes needed the same may be true for some of the board members.hence the upward chances are far greater then any downward move
I have to believe an acquisition is the most likely scenario; however, this management will draw out the process as much as the law will allow. If they can hold off until the next annual meeting then they could announce another stategic review that could last another 9 months. Meanwhile the inventory draws down and the property less appealing. They win again.