Since Hunter and Alice have been on this thread, all we have been looking at have been the negatives. I have come up with several wild hypothesis of my own. What if we looked at the details that we have in a more positive way?
I present this scenario strictly on a "what-if" basis, and is not based on any substantive knowledge from the company, but suppositions gleaned from past postings:
Consider that Rother 1 proved to be a commercially viable well.
It was deemed tight by Dr. Stamm because he was aware of the geographic extent of the reservoir.
Now consider that Rother 2 also finds oil. We now have confirmation of the reservoir and the technology.
We have a problem. We need to secure the rights to the adjacent
land. To get the best possible deal, we need to declare both wells tight. NAE pulls the scans to conceal the extent of the reservoir from Amoco, landowners, etc. There is also a possiblity that NAE and UPR want to secure those rights together as part of their farm-in agreement. I am not an oil person. I would assume that this could take time for all parties to reach an agreement.
Also consider this potential. In a UPR press release, a while back, it was mentioned that while UPR was not selected by Venezuela as a participant, its expertise as a horizontal well expert may be utilized. In addition, UPR and Swift used a horizontal well method to tap through an Austin chalk formation in Texas to access a gas reservoir. Why can't they do that here?
It looks to me like we may be sitting on too much good news rather than nothing but bad news which has been the spin for the past ten days. The problem is that it may take time for this hypothetical situation to play out.
In the meantime, we know that NAE has enough cash to drill at least another six wells. We also must assume that they would not proceed with the additional funding unless they had positive indications in Rother 1 & 2. If the odds of hitting oil with the EMSounder are 1 out of 3, there is a good chance that we will hit oil somewhere along the road. So, there is still a chance that we will hit a money-maker that is unencumbered by land rights issues sometime over the next three months.
Please feel free to shoot holes in this scenario. I am presenting it as a potential scenario and do not intend to hype this stock. This is a mineral exploration company which is just one notch up from betting on the third race at Belmont.
marty |
