DD,
Not sure where the rumor started. I first heard it re: PKC, about 3 -4 months ago. With ROH still down as low as it is, way below the intrinsic value of their reserves (as shown by Strain's break-up value computation), it is only logical to think about a HEC buyout of ROH.
The fact that this field (the Palo Blanco) will likely be the first producing field that HEC has in Colombia (ie, "in-country production", as Mikel referred to it in his release), points even more to a HEC buyout. The spotlight is on them now and everyone is saying "great hits Mikel, but where's the production?". If he buys ROH and PKC he doubles the production that he would otherwise get from this field.
BTW, now they are saying first production (by trucks) will be January.
Not sure where the buyout price would end up. He has intentionally withheld releasing the results of the study he had done on the Palo Blanco so as to keep ROH and PKC stock prices low. He will only release the bare minimum amount of information on the Palo Blanco activity as we go forward, with this same goal in mind.
There is a good chance the news on this Estero #3 well will get delayed significantly beyond when the well is actually tested. This is because with the Catalina well due to be done right around the same time as the Estero, Mikel may hold off releasing news of the Estero results to see what happens with the Catalina well first. That way, if the Catalina well is NG, then he can at least say in the very next breath that he hit a massive well in Palo Blanco.
A buyout before the Antejeos results are out (ie the next exploratory well) would be way premature IMO and I would fight it fiercely, FWIW. Until that thing is drilled it is impossible to fairly value this company. Since that is gonna spud in February its likely that we won't have to worry about a buyout occurring beforehand.
Everyone who's waiting by the sidelines waiting for the tax loss selling to subside may be in for a rude awakening come next week. I really feel this stock is gonna bolt out of the gates once the bullshit is over, and seek its proper valuation. Only two more shopping days until the rally starts folks! |
