Ken: That's been the biggest story on this stock for the last few months. Caused heavy volume and a brief runup to 5 back in March, but now were baselining again between 3.5 and 4 as the rains come down in country. Things have been pretty slow lately, but I expect them to start cooking as the annual shareholder meeting approaches and the Lundin's (not happy campers right now with the performance of their investment) start to get antsy, harping more and more about shareholder value (or the lack thereof). I'm expecting there to be a lot of external pressure on Arakis management to change course and focus strictly on Sudan to the exclusion of all other big plays (e.g., Oman). Should be an interesting duel. I expect management may lose the battle, with either the Lundin's or some other oil-thirsty major/independent hell-bent on reserve growth taking them out before the end of the year.
Arakis is a no-brainer, IMO... extremely undervalued, and already has more reserves (1 billion+ bbls 3P and growing) than most independents or domestic-integrateds with $2-billion+ market caps. _EASILY_ a $6-10 stock, but the share price has not yet caught up with the fundamentals. It's still smarting from the big runup to $25+ in mid-95 before the Saudi prince financing debacle and subsequent crash, but it's going to run again sometime in the next 6-8 months - not as high as before, but still significantly higher than its at right now.
If you're interested, your timing is quite good. This is actually a pretty good entry price if you have some free risk dollars, you like roller coasters, and you can accurately assess political risk. ;-) IMHO, the downside risk from here is minimal. |
