Richard,
I have seen Raider Resources listed on Alberta, but never requested
information about the company. I agree with your cash flow multiple
logic. Basically, I look for companies selling under 3X projected
12 month cash flow and sell over 6X cash flow. I also take into
consideration their 12 month operations budget and drilling plans.
Last, when I buy into shares this low in price, I hold rather than
sell as long as operations are positive.
I just pulled RDR's 3 month financial report ending 3/31/96. If the
company were to have flat quarters for the balance of their fiscal
year, cash flow would equal your estimate of $.05/share. They will
even show earnings on the same basis of $.02/share. This would
indicate to me, we're looking at shares in the $.15 to $.25 range
very shortly. Do you know what their net asset value is?
Tell me, are you in communications with the company? I would like
to know if they are exploiting acreage with well enhancements or
developing existing acreage. Is it safe to assume they are not into
exploration yet? Production has increased 10X compared to same time
last year. Can you tell me anything regarding what they have done
with the drillbit thus far this year? Also, has anything been said
regarding reverse split of shares. With such, company will be better
recognized in the marketplace. 31 mil outstanding shares is high
for a production company of this size.
From the information I've seen, there is enough substance to call
the company tomorrow AM. With any success and growth in terms of
production and reserves this year, this may be a very interesting
situation. These are low profile situations I like to pursue.
How did you discover company? Are you interested in oil & gas
companies in general, or is this an exception. I can tell you're
familiar with the industry. Your cash flow comment indicated so.
After I talk with the company and receive materials, I'll post to
you on my further feelings on RDR.
If you wish to e-mail me for whatever reason, use KYerman315@aol.com
Thanks for the lead. |
