MEXP ALERT ! .... the single most excitement I have ever felt on any stock ever - period.
My homework is now done. I said I would post what I found out; after my ''sell'' comment - and here it is.
PS; save the ''hype'' flames; no hype here folks. I am going to be going for a few hours shortly - I will post the Fundamental numbers & the TA opinon later today/tonight.
The entire hooplah here over MEXP - was entirely over my answering someone's question about the 15 fold ramp in volume and MEXP's one day 20% blow off by noon last week.
I said - I imho; would sell - the reason being that there was no news, the volume was ramping straight up & we were down 20% and it was only noon ! My reasoning was to preserve capital, untill being able to find out what was going on... to give the company time to respond, if they so chose. Or to be able to make calls to our own brokers, the covering analysts, to MEXP etc. it was the only prudent thing to do - I still say I was 110% right & the price action supports that.
I NEVER changed my thoughts on MEXP as a value play. I did exit MEXP earlier, to pursue a very leveraged short term play with RRC that I spoke about openly. That as well changed nothing in my very bullish view of MEXP fundamentally. But - one can not ignore technicals - nor can one EVER pause, during a freefall of that proportion imh.
I believe my call was entirely right - and 110% so. No one could have sold & re-bought for the cost of more than 1/8th... pennies in the big picture to MEXP overall.
Now; the updated story. "MY'' followup, on MEXP has determined in ''my opinion'' that MEXP was merely a short selling shake out play- period. There was reported on Yahoo to be at least one daytrading group/room shorting MEXP as its main play - why ? I have no idea... if it was on my ''sell'' comments - they are idiots - period.
My followup ; has found that MEXP has a Bank Credit Line redetermination meeting with the Bank of Montreal - their lender; on Oct. 15th. This is correct as reported by many other posters of late. and verified by analyst Raymond James. On that note; MEXP has publically said that they had more than one refi offer/option on the table. Ask yourselves this; with their stock getting hammered; why would they wait here ? Simple answer actually; my interpretation is that the agreement is in place on the new line as we speak - expanding their borrowing capability (substantially so) - giving MEXP the $ to step up cap ex spending. Only the numbers from the Q3 accounting report are needed to set the actual parameters of the line - period.
There are only 28 trading days untill the Oct. 15 meeting with the Bank of Montreal. MEXP has issued nothing negative - and there is NOTHING negative to release ! Quite the contrary in fact; there is actually some very, very strong upside news !
1. Salt Dome has 2 wells ready to spud any time ! There progress on the Salt Domes has exceeded everyones allready positive expectations ! This is their core area - and their 3D re-work of the former seismic studies there & there making this their core area - was a company making-breaking bet. They won !
2. Michigan production reported coming online
3. Centerville Dome heavy oil problems solved
4.Allar #6 starting to flow
5. The Blackfoot prospect is no longer a mere ''prospect'' - it is huge ~
.... on Blackfoot; this was never even a factor in their IPO valuation - it was allways the ''potential'' icing on the cake - only. No longer ! Folks; don't take what my homework has found out as the gospel- merely look to what K2 the lead partner is doing there. They are raising CASH asap to pursue this - as it is their entire play ! They also, would not be raising cash here yet, unless they were assured that MEXP as well - would have the increased Bank Line in which to ramp up cap ex develeopment in the Blackfoot. Blackfoot has the longterm potential to take MEXP from their prior - fundamentally supported value of $12-16, to well over a $20+ stock if they get the money to drill - and I believe the commitment is all ready 100% in place from the Bank of Montreal !
Fundametnally; go back to the analyst reports & the original IPO valuations & numbers. The ONLY reason MEXP is here at $2, $3 is #1, that Institutions can no longer own a stock in default of their bank line, under a $5 valuation & being at this market cap leve. The only reason MEXP was in default, was the requried accounting write down s of proved reserves due to the historic low commodity prices at year end. Nothing fundamentally as far as production, cfps generation, the ''actual'' reserves that are there etc. has changed. MEXP today; is as fundametnally supported to be a $10 stock as it was when it was an IPO !
Folks; where were gas & oil prices when MEXP was an IPO and where are they now (VBG) ? There is no bigger valuation anomaly in the entire Oilpatch imho ! This company has lost nothing from the original story of where it was clearly both fundamentally supported and given the price support by the Street at $12ish !
I will put my ass on the line here & gladly so .
I AM MORE BULLISH ON MEXP'S MID&LONGTERM POTENTIAL THAN ANY OTHER STOCK IN THE OILPATCH - period !
RRC may be a close 2nd; and potentially outperform them through their end of Sept JV closing.
I am raising my offer/challenge here !
IF MEXP DOES NOT TOUCH $5 BY Jan. 1 - I will never post on SI again - period. Actually my thoughts are; this will blow through the prior $3 1/8th ceiling here shortly upon merely the allready public perception that the Bank of Montreal deal is done. The prior $3 1/8th ish ceiling was established by the marketplace - as where they would not carry MEXP above, without the Bank of Montreal News... that news is now a moot point imho ! We should see a strong breakout over $3 well before Oct. 15th imho. My target is $4 1/2+ by Oct. 15.
Then MEXP returns to fundametnal valuations based on cfps and other traditional multiple metrics of the sector. Those multiple support a $5 - $6 price for MEXP right now - here today. With rising production and their recent run of drillbit success ; from which production will not be seen for a while - this climbs steadlly with Institutional buying support starting post - Oct. 15th. I say we see $6 by Xmas from the return of Institutional buying and continued strong nat gas prices.
MEXP is out of the woods and above & beyond that; their drillbit success in the Salt Domes and the Blackfoot - has raised the bar from the oginal $12-16 valuation range; to potentially the $18-$22 range within 18 months.
Watch for a very, very Bullish Analyst report & upgrade from Raymond James - in my ''opinion''. This also will be over an immediate $1+ overnight stockprice driver...
The window of opportunity is now open; and it's a first floor window (VBG) at $2.... next stop post Oct. 15th will be the 2nd story window at around $5-6 and then this moves back to its allready fundamentally supported valuation of its prior IPO rannge of $12 by the end of 2000; with the Blackfoot drillbit success as the future upside driver.
Again; I am not shy about telling it like it is; this quite simply is a fundamentally mispriced ANOMALY - and it is so; merely because of the required accounting writedowns - nothing in the ground, or above it has changed !
I welcome ANYONE with any opposing opinion, as long as you support it with numbers...
Raising cash & going LOOOOOOOOOOOOOOOOOONG MEXP ! |
