Mohan,
I am here to tell you your assumptions are way out in left field.
If you will read the previous news releases by the company you will have your information in hand, as to where the money is for the drilling program. It is in the bank, so to speak. Tracer has sold off their Canadian assetts, and banked the money. Their net income for the period was $256,000 dollars, and looking at their balance sheet in the annual report they had about $1,500,000 on hand. This would total about $1,750,000. Remember also that the rig has been rented, and it was stated that this would cover all Indonesian expenses of the company, so the revenue from the Ok Block would be added to this total, bringing it to over $2,000,000. Last I looked, they were drilling holes for under a million. As for the bridges, the repairs have been ongoing, so this is not a new capital project for the government, and would not be one the of first things cut, in a cash crunch. Even if it was, the company, as stated in the 1994 annual report, had to rebuild bridges to get to the Patas drill site, and that well had a cost of around 1.2 million. Still, plenty of money around to spud the well. The company believes there is commercial quantities of gas at Ngurit, and Jacobs has found a buyer for any gas produced. Thus, the willingness to drill again in the area. Also, keep in mind the split for gas revenue is over double that for oil.
As for the currency crisis in Asia, it very well might work to Tracers benefit. If the government needs money, I would assume Pertamina is part of the Government, and would need money also. I would therefore assume that they just might be willing to sell interests in producing blocks that they would not normally sell. This could play right into our hands, as Steve Jacobs has been dealing with Pertamina for almost 20 years.
I, like the rest of you am not happy about the stock price, but truly believe the company is way undervalued. The company does not hype, and as negotiations go on, they are done quietly. For example, the bid in August was not disclosed until a week before the bid was awarded. The company was very disappointed, because they truly believed they had won, and this was a company making deal. If you think about it, this had to be going on for several months before we heard about it. Then, there was another deal they thought they had in late October, which was mentioned in the news of November 13, and the vendor decided to pull it from the market and postpone negotiations. We never even heard about this deal until it was mentioned. I say this and caution you not to assume that Steve Jacobs is doing nothing. They just go about there business quietly, working very hard to seal a deal, without the hype.
This is one of the reasons the stock trades where it does, and why a deal would propel it upward very quickly. Who knows, the company right now could be waiting on the results of bids they have submitted. I would not doubt this, as it has happened before, and they have stated again that they are reviewing a number of opportunities. Keep the faith fellas, we are very close to turning the corner. Is has been a long wait, but these deals take time to consummate, and they have been oh so close to making us a lot of money. If you have waited this long, don't give up now....you just may regret it.....
Pete |
