I don't think management will dilute shares unless the market values the company at a much higher price, then all bets are off. I hope they don't dilute, but the raise capital via equity and debt model is how some of these guys grow. I certainly hope their acquisition phase is done for the time being. They need to execute what they have now or this stock is going nowhere. Management realizes this I am sure. Very little cash can move this stock a significant percentage. This stock is ridiculously cheap IMO, I've backed up the truck.
Thanks for reply and, based on what I heard at DUG, your explanation makes sense. I liked that they felt they were in best acreage the MS Lime and upside in Gulf area was not in stock at all, which was about this same price, if I remember right. Just can't understand why market cap is so small on this. I have been researching several E&P's with similar production and market caps are double, on average. Well, here I go
You have to remember that the convert kicks in at around $11, believe it is another 30 mm shares. I still think that the float of only 20 mm shares currently is maybe a deterrent for a lot of funds, $120mm value, a 5% stake is only $6 mm. Probably could be said other small e and p s, but seems it would reduce the no of potential investors. I almost think you need to think of the stake as investing along side the PE funds and they aren't too concerned about the short run, their horizon is a couple of years out. Not out of the question for them to make another acquisition, I hope they don't, but they would be infusing cheap equity, imo. Individuals would be diluted, unless you up your investment. I still think anything under $6 is a gift. Saw an analysis that the rest of the world, ex OPEC and NA, is not increasing production. The game now is about our supply and the call on OPEC production, and they seem to like $100 global oil. At least WTI is tracking close to Brent currently. I'm tempted to buy more, but will probably wait for oil price volatility and market jitters.
Woke up today very bullish, still trying to shake it.