Unitization and the share price
posted on
Jan 23, 2009 08:30AM
Developing large acreage positions of unconventional and conventional oil and gas resources
Thanks Lanman for bringing to light the unitization concept on this board. Your recent diagram was as simple and informative about it for the non-technicians among us. After reading the posts on the subject, I do believe that this was a natural course of action for a company like Falcon who has seemingly hedged its risk on the whole project.
We may not see the $20 we were dreaming of - but to put it in context this was being made during a hype period on the markets in general. After the credit crisis, the rationale of investors to stock investing is substantially changing explainign also the sensible volumes we are experiencing and share price predictions have been streamlined considerably. In the first quarter of last year, before the downfall of the markets, Falcon peaked at approx 1.30, and today even after the recent news, we are in the early .40's. I often wonder the effect of the credit crisis and decline of oil & gas prices on the SP ? With the liquidity issues most are facing and the reduced borrowing power of parties investing in exploration companies, a stock like Falcon despite its potential is inadvertently affected and that is why we are where we are today. Is the 0.40c of today worth the 1.30 of last April ? I think so.
Time will tell but for sure the market is in no mood for huge valuations at present, which reinforces my belief that this stock remains a long term investment for me well beyond 2010... time for the market to recoup, for the energy prices to be higher and when natural gas (and oil) production from Mako, Hungary becomes known to the whole world....