Richard, I too have been patiently waiting for the fulfillment of the Yemen promise and the Montana promise.
The Montana promise is being fulfilled and there is increasing revenue from it as each new well is added. The horizontal drilling test upcoming in December should accelerate the process if successful and there are many precedents to suggest that it will be successful. Berkley's recent success over the border on a Red River test is a good example of the difference horizontal drilling can make in the rate of production. Transglobe has several more years and very high probability Red River targets, as well as riskier/potentially higher producing Tyler formation targets to increase their cash flow from Montana.
Throw in Yemen which, as I have reiterated is potentially huge but will take time, and you have got a large plateful. The partner(s) for the Yemen project will in all likelyhood foot most of the costs and we will cede a majority interest to the partner(s) keeping a large percentage which would be great.
Don't forget the Madera prospect where we have production and proven reserves of natural gas at a depth too deep to waste development money on at current gas prices but TGLEF has earned in the right to those leases which was their intention and they will return when the economics make it feasable which could be within this century, especially if old Saddam keeps it up. The Madera is why I first got involved and I guess the volatility in the past appealed to the trader in me, but I consider this a pure value investment with low risk/high reward at the present time and I am in for the long haul. I do expect encouraging stock action in the near future especially if the horizontal Red River test next month is very successful as we still have many more high probability Red River targets to drill.
I would think the company could be cash flow positive from Montana within the next 2 quarters, especially if the above takes place, but in '98 anyway with the status quo.
Does this make you feel better? Look forward, not behind. This is a new company with new vision and new great management in my opinion. Ross Clarkson and Erwin Noyes are treasures and we are fortunate to have them so let's support them. They have overcome a great deal to get us where we are going. They impress me as properly patient, very competent and consciencious oil men with good business acumen and connections and experience in the industry that can benefit the company big time. This is one of the biggest attractions of the investment and extremely important.
Do your own DD of course but don't get discouraged because of the past. Look at it as if it was the first time as you should when evaluating any of your investments, periodically. This is my suggestion.
Good luck whatever you do,
AliB
PS-I'm sure that analysts will soon be writing about us and recommending us on an ever increasing less speculative qualification basis and that there will be more fund buying drying up selling pressure. I believe Ross will be going on a promotional tour to acquaint the brokerages and venturists to our many investment merits very soon. |
