RE IOC from another thread...
Re: InterOil ELK-1 well
1. I have no position in IOC. I had a position soon after the company went on the AMEX, but I sold for a profit after a few weeks and have no intention of getting back in, because
2. I know a person very well connected with the company. He bluntly states that it is a high risk / high reward company. If they hit like they hope, the stock should be a multi bagger. If they don't, forget it. (This is higher than my risk tolerance.)
3. Since you are into options, if options are available, you should be able to buy well "out of the money" options cheap and if they hit you clean up, and if they miss, you loss 100% of a small bet.
4. I have read criticisms re: the intergrity of one of the directors by some seemingly knowledgable people -- in how they raise their money or some such thing. I forget the details. Obviously I canNOT speak for the board but my contacts are people of great integrity.
5. I was very surprised that T.Boone Pickens took a substantial position in the company. He is the type of guy to do his own DD and is very knowledgable so take that for what its worth.
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Re: InterOil ELK-1 well
<I have never studied this particular event before and therefore do not know what is typical for a gas well, but I can imagine that delays do happen.>
One little detail: My contact had no desire to find natural gas. In fact that was his fear as it would be "stranded" NG due to the remote location. He always wanted to find crude -- lots of crude.
However, you are correct; delays often happen in the oil patch. An extreme example is Thunder Horse, but my drilling friends said that problems crop up even in drilling routine wells. Drilling in difficult or remote locations only makes things worse
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Re: InterOil ELK-1 well
Management at IOC lacks credibility. They have announced significant hydrocarbon finds in the past, then turned out they were not commercial or stranded. So were worth nothing to investors in the end.
I look for the stock to be cut in half by Christmas ycdv.
They even had to restate numbers, messed up their accounting, the CFO left and has not been replaced, the refinery had problems, they are buying crude for the refinery on the open market and losing their shirt in the PNG market. It just all does not add up well.
I wish I could be more optimistic here. I actually am long, thinking that maybe I should be short, as each card is revealed.
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Re: InterOil ELK-1 well
If IOC management had some credibility I might feel more comfortable. They don't even have an IR to call - they got rid of him last year, was based in Houston. Now you need to call Port Moresby, when the phones are working, to ask a question as a shareholder.
Fact is they have to restate their financials in the last year. The CFO left and has not been replaced. They released earnings in the Canadian markets before they did in the US in the last release that really whipsawed the US investor. They missed estimates big time, and their earlier forecasts. The refinery has had problems. Downtime at the refinery and costs exceeded expectations. They have had numerous 'discoveries' of hydrocarbons over the years that have been announced by management but later turn out to be 'non-commercial' so are little value to shareholders or the company - but in some instances the company has used the stock pop to issue shares some allege.
Look at the chart. Not a pretty one. This in a time when most energy shareholders were well rewarded. So yeah, the company has potential, but yes the management is also a major concern for us longs.
If the stock moves, I have a feeling it will be halved as the initial post notes - not a double. Management has done a terrible job at communication and operations. They have no presence in the US, only a shell office in Houston they need to trade on the US markets. What does all this tell you? To buy the stock? It reads short to me, unfortunately.
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