Ron,
I respect your caution, especially after having been so badly burned in 1998 and 1999. Yes, I grant you that this is a risky stock.
In the Conference Call, Isautier referred obliquely to the problem that you highlight, when he talked about those in Kazakhstan who do not share the President's vision of the kind of robust economic climate he wants in Kazakhstan. There also is the reported problem of the Antimonopoly Commission taking ShNOS to court over raising domestic petroleum product prices.
Isautier said he hoped that in time reason would prevail and that others would come round to the President's way of seeing things. We all hope so too.
Although the risk is there, Hurricane, IMO, is positioned to become a cash cow. It already is demonstrating powerful earning capability--real bottom-line earnings (after taxes and everything else).
And, as Isautier pointed out, finding costs are less than $1 /barrel, versus much more than that for virtually all other oil companies. Again, as he pointed out, further growth can be achieved with relatively little outlay of funds.
He also pointed out that the opportunities in Kazakhstan are so great that THESE should be grasped ahead of what he considers lesser opportunities in other parts of the world.
We could take all this with a grain of salt, saying that a good deal of it is just PR for his co. But Bernard has put his money where his mouth it. I don't think he would like to lose up to $20 MM of his own money. And who knows the situation from the inside better than he?
When I see what outfits like Triton Energy are selling for, I don't think that eventually $20 or even $40 are unreasonable. Not next year, mind you, but 3 to 5 years from now. Hurricane has the capability to make you some very handsome profits. And for those kind of profits, it's worth waiting 3 - 5 years.
Risks, yes, big risks, but if you wait until you have seen that the bad scenarios didn't come to pass, stockholders will be demanding prices commensurate with what this earnings machine will be worth when the negatives don't materialize.
I'd hate to see a buddy miss out just 'cause you got burned. Many of the others of us did, too, but just used it as a buying op.
We could be mistaken, but my gut feeling is that, despite the risks, we won't be.
If you're ever going to get back in, don't wait until all the potential negatives are gone, or so will your opportunity. It's the potential negatives that keep the price of this stock at ridiculously low levels--that, and fear of getting burned again and a failure to understand the potential.
Just MHO.
Hickory |
