Recent post by the Dutchfella....He seems to be just as frustrated as we all are....
The bottom line is that the present price is absurd in comparison to what the company is worth but who knows when the market will come to that realization.
There is enough blame to go around for this price drop and you have to look at the Short Fund, Lehmans and Canny. The problem may be that the Shorts were smarter than Lehmans and FCP (or is that overstating the obvious)and hiring Canny was like Jesse James inviting Bob Ford over for dinner. But FCP could have ended or limited this decline in share price with any number of announcements and they choose not to release well results or the range of the bids made to date. Where would the share price be if they had announced bids of $22 to $24 or $24 to $26 or even $16 to $19?
Now you should be able to figure out that there is always a reason why things happen and it is generally money. So who made money in this price decline? And they made it going up long and coming down short and they will make it long on the way back up again. Of course, they have an advantage that the retail segment does not have and you figure out what that was.
So when will events and prices start to move? Beats me! This whole sale process appears to have been adlibbed beyond a very basic level because it is hard to believe that anyone involved in it had a strategy, or at least one that was any good. This went from "looking for a big $$ fast deal and get out of Dodge" to "bogged down because of no deadlines and questions about the size and value of their reserves" to "Screw em, let's drill and hit some wells and make the ungrateful bustards crazy by not pushing the sale".
They certainly do not appear to be in a rush to sell anything and may be hoping that 2 more wells in Yacoub will give them an idea of the accuracy of their seismic interpretation and allow them to estimate how many BOE they have in Yacoub.
So what do I think i know that they haven't released? The last Ledjmet well was very good, the ZCH1 well hit oil pay and looks excellent, and they hope to have 700 MM to 1 B BOE in Yacoub, mostly oil. Every 100MM BOE is worth at least $3 a share to Son of FCP, so hope that they keep Yacoub and find all that oil. They are said to have 5 offers, one all cash for everything, 3 of them are all cash for ledjmet and one cash and shares. And they are waiting on the Chinese to bid which is making ONGC crazy.
I used to believe that they would get $40 a share, now i believe that we will get high 20's or very low $30's if they sell everything in the near future but that is just an opinion. Only question is how long will it take? I don't know and i'm not certain that even RA knows, may depend on the timing of the Chinese bid or how many wells he wants to drill on Yacoub. If he decides to sell ledjmet and keep Yacoub, then late may or early June, and we may see that $40 target in time. If he wants to sell both properties and wait for the dim sum gang, it could drag on longer.
Everyone here could have sold above $20. Some did and others chose not to, either because of greed or because they genuinely believed there was big upside left. Some chose to buy on margin, some chose not to. Everyone has to live with the consequences of their decisions and whining isn't going to change those circumstances.
You will get another chance to sell above $20 and i hope that it is a lot more than $20.
And i am as frustrated and exasperated as all the longs here.
J.D. |
