I agree Dark. (thanks for the article) Especially with the likes of China, the US and the rest of the world's dependence on oil and case... and it's diminishing supplies... and with what's going on in the middle east... I felt in general that owning oil and gas is a great way to hedge the market. That and the fact that my truck and old landcruiser suck gas like it's going out of style... I had to at least hedge that!
I use the following "price check" calculator from smart money as a preliminary indicator as to whether I will look further into a stock. It peaked my interest when it basically said that MRO was about $100 UNDER priced. http://smartmoney.com/pricecheck/index.cfm?story=worksheet&nav=dropTab
Stay well and thanks for the info.
I appreciate it Dark! Just also giving you a little
I couple of days ago I bought a few more established oil and gas plays OXY, MRO and XEC as hopefully a more stable hedge against some of my penny stock madness. Then of course it turned out that I bought too high. Futures went down... and its been way too warm of a summer. I sold the OXY... but I am hanging on to my MRO... and a bit more of an aggressive play with XEC.
Definitely welcome your opinion.
Dark... good morning.
I needed a cup of coffee this morning... and then I opened the message board and saw that I was possibly inferred that Armed and Life were one in the same. As much as I like that crazy bastard... nothing could be more funny! Sorry you had to waste your time reviewing past posts to see if there was any correlation... that was definitely a waste of your time... when instead you could be helping me with my DD of ONCY and FNGC... and anything else that could help make me/us/all wealthy.
Later Armed... or was that Life??? (Depends upon whether there is a comma after later or not)
And if you wind up going out on a blind date and she turns out to be horrendous... your schmeckel is going to collapse as well.
Bottom line... if you're Cornell... are you going to give any entity $35 million dollars... on a roll of the dice. Highly unlikely. Also all companies that drilled on Gemini and Live Oak... have stayed in the deal. Also very encouraging.
Dark... I agree that I would have like to see some sort of run up prior to the announcement as well... but I believe in stocks that are certainly much more widely/known and held... you'll see a run up prior to earnings announcements and what have you. But still very few people know about what's going on with FNGC. And most of the few that DO know are insider's... and they can't be doing much of anything before the quiet period of that announcement.
This should be very interesting.
More importantly Joeh... two wells should be in PRODUCTION by next week.
I won't make predictions in terms of price. The market will dictate ultimately where it should be... based upon what is then known and the prospects for the DB3 well... which supposedly is very promising... but time will tell.
That makes sense Joeh. So here... think about this. Essentially what Cornell just did was refinance Falcon's deal and give them access to a total of $35 million... at what amounts to .56 cents a share. The only reason Cornell would make that money available above the current share price... would be only if they were really confident that there was gas in the ground.
So that gets us up to .56 cents... which it could easily do by next week when they announce that 2 wells are now producing. And even then... the price needs to go above .56 cents in order for Cornell to make any profit on that. And even then... you're still talking about 63 million shares... which at current levels is not going to be sold very quickly. So if you extrapolate the whole situation out... Cornell is banking on the fact that in the next few weeks and few years... that the volume and liquidity of this company is going to increase substantially... where they can start taking some of their money out of the deal and turning a profit. They won't do it all at once... they'll probably take a little bit at a time to 1) at least pay themselves back and then determine from there how much of a return they really want... but it all depends upon what's really in the ground.
So the bottom line is... the fact that they did the financing at .56 cents and put as much as $35 million on the table is a VERY bullish sign. From what I know of Cornell... that $35 million is in the top eschelon of financing that they typically get involved in. That's a big statement. Think about it... would you be loaning $35 million to anyone if you did not have some sort of assurance that you would be getting it back. Of course there are no guarantees Joeh... but the implications of the filing are very positive.
Dark... I won't shoot from the hip. I'll check on it. Definitely feel free to call and check for yourself as well. I would be interested to see if your take was the same as mine. In Falcon investor relations talk to Jeremy.
Candidly that was stupid... Once these two wells start producing... I think at least .56 cents is right around the corner.
Ok... here's the deal. And you should all call investor relations to clarify on your own... just in case I am missing any important nuances of this.
Essentially this filing represents an additional $35 million dollar line of credit to falcon. In exchange for the $35 million... Falcon gave Cornell the right to exercise +/- 63 million shares at .56 cents... which equates to approximately $35 million.
Cornell has the ability to exercise these shares at any time in the next two years. They have ZERO motivation to sell them now... because anything that is below .56 cents... and they wind up losing money. But here's the other bottom line... that they wouldn't give a typically penny stock company a line of credit of up to $35 million unless they were very encouraged on what is occuring.
Here's what we should know by next week: More detailed data on Gemini and Live Oak wells... and the fact that both of those wells will likely be "producing" by next week. Additionally DB3 in Louisiana will also start drilling likely by the 15th of this month.
Bottom line Dark... after getting your note last nite I was a little nervous about this filing... but after reading through it and getting an understanding about what now amounts to a total line of credit of $35 million I am much more encouraged. Bottom line... there is no way Cornell would give them access to MORE capital... if they weren't excited by what it is the ground. And if there is really great stuff in the ground... then Cornell will likely take their time about exercising and selling any of those options... because they stand to gain quite about for themselves. The interesting question is... what sort of return do you think Cornell is expecting to get out of this? Time will tell.
Bottom line... I'm still all in. Thanks again for the filing. Please all follow up on your own to substantiate any or all of it.
Here's a couple of bottom lines...
- At .38 cents... the 60 million shares equates to approximately 22 million dollars. Ultimately they can exercise them anytime between now and the next 2 years.
- What's more important is to take a look just at the preliminary spreadsheet numbers at the bottom of the filing. If the numbers are certainly anywhere close... small dilution whenever it occurs will just be a drop in the bucket.
All that said... I am following up on all the other details this morning. As soon as I talk with them... i will get back to you.
I missed the call... because I didn't know that their investor relations office closed at 3 p.m. California time. I plan to call first thing in the morning.
That said... Armed has done a bit more homework than I on the subject.
That said... scroll down to the very end of the filing and then scroll up a few pages of that spreadsheet... to get a sense of what revenue they anticipate from the PROVEN reserves.
Apparently there is at least some information that is known on the existing wells that is included in these estimations.
Is it standard procedure Dark that information like this would be filed with the SEC first... before disclosing it to the general public?
While the filing seems to suggest that some shares could be sold over a 2 year period of time... causing some dilution... but when you consider some of the revenues that they anticipate from this... the small dilution that they mention... appears to be a drop in the bucket.
That said... we will all wait on hard data that is probably due out within 2 weeks on the wells that have already been drilled. But the real potential of the company lies in their DB sites in Louisiana... that I believe are going to start being drilled by the middle of February.
I plan to be on the phone with investor relations first thing in the morning... so they can give me the bottom line of the filing.
By the way... where did you find that? Is there a site search for all SEC filings???
Dark... thanks for this. I have a meeting with investor relations in about a half hour. I will let you know what I find.