Hi Mike,
I was wondering if you have called Allen yet, or if you have been just reading the posts here to do your DD. I am not too concerned about the decrease in the production from a few months ago, since it is winter now and things are harder to do when it is cold. If the production dropped during the summer I would be concerned. About the target of 1000 barrels, the target has not dropped. He said that they would like to get there by the end of Q1, but there are variables that could affect it, so the range that he told Yiqun. They don't know if they will be getting all of their systems on time and running, what the weather will be like, and other problems that production has. If he lowered the range to 400 - 600 barrels/day, then you would have something to be concerned about. About the dilution issue, I think that yes they do have a goal they are actively persuing to acquire more property, but they are using new shares like you said "new shares are being used to purchase revenue-producing assets and they increase the value of the shares proportionately". They would like to acquire enough property to have $1 BILLION in PROVEN RESERVES by the end of '97 (if I remember that right). Right now, they are about half that. All I can say is to call the company and get the word from them and not just read what is posted here and make decisions from that.
Have a good Christmas
Eric
P.S. Yes, unless you are a long-term (1 or more years) investor, you should take some profits when the stock has a 100% run and stalls for a couple of days. A 50% retracement in the stock price is normal with a fast run like that. Also, if the stock gaps up or down, it has a tendancy to cover that gap. Just some tips from my experience with the technical side of stock trading. |
