This came from stockboy7 on the Yahoo thread.
10 Reasons Why KOG will go over $1 & Up 10-May-09 07:25 pm
The following are highlights I gleened from the first 19 minutes of the conference call.
1. Established vs speculated: Enough liquidity to move forward with all its drilling plans for 2009. KOG has done an excellent job protecting its investors.
2. A state-of-the-art drilling rig especially suited for the Bakken oil play. I like this (minor) detail in the discussion because it is paramount to their overall success.
3. Decreasing drilling to completion times (41 to 28)reducing production costs. This is really positive news and no one should miss this detail.
4. 1 New (drilling) Well Every Month (May seems ready to repeat this): four new Wells thru Jan-Apr 2009. Keep in mind, while other small oil/gas companies have been sitting back, stuck in a mire economics, KOG has been surging forward.
5. As long as commodity prices hold, there seems to be no let-up in the company's plans to continue drilling. And that certainly seems to be early sign here in May 09.
6. 11 drilling permits (positive working relationship with the Bureau of Indian Affairs). Again, I like hearing this. The company has a good relationship with the local bureacracy and was complementary.
7. 3 new drilling pads already built to accommodate future drilling ... again KOG is going forward with its plan to execute in a timely fashion.
8. The first 2 of 4 have been stimulated. The second 2 of 4 by early June. Though the stimulation of the first well didn't go quite as planned, its production appears more-than-promising (i.e. there's more oil/gas to be found). The second well encountered no problems. Personally, I have a lot of respect in the fact that Len and Jim did not 'gloss over' the truth about the fracturing disappointment with the first well ... see the value in this detail -- these guys are being ethical with their share holders.
9. "We believe our efficiencies will continue to improve over the remainder of the year" 30-35% reduction in costs i.e. 4-6 million vs 6-7 million range completion costs 2009. Who can't like the sound of this?
10. Current projected rate of return is between 30 - 40ish dollars per barrel (this number will of course vary) ... depending on the drilling/technique/approach employed. Here again, I like the experimental nature of their current work; they are doing what they're doing with an end goal in mind.
Conclusion: In part, this is why I personally bought KOG at .19 cents, and have added along its upward journey. Despite ups and downs, KOG is a solid company with a working growth plan. I understand 'shorting' in and out, but I also don't want to miss the much bigger pop that is coming -- I will even sit tight if there are minor downturns. For those who come on this site and say, "KOG will go back to .18" you can have your opinion (we all do), but I for one don't share your view. I will again put my view on the line and say that I believe that KOG could still see $3/S before year end. |
