posted on
May 17, 2014 03:37PM
Dilution is a necessary evil for a business to stay alive without a revenue generating asset. In the early days of FO we blew cash pursuing drilling on our own that obviously failed. We all feel there were bad leadership decisions, but some how they convinced the market to raise money to stay alive, although it was very costly. Considering the time FO has been in business without any proven test results, it's a miracle the company is still in the game. Current management has positioned us with adequate cash to go the distance with the Australia drilling program. It seems like 8 of our 9 lives have been used, so this time it needs to work. It doesn't really matter if there are 1 thousand shares outstanding or 1 billion, if the wells fail after testing, both senarios are worth $0. What we are attempting to achieve are wells considered worthy of putting into production following successful testing that create an asset valued between $800-$4000 per acre. When that happens, we will be happy and thankful that dilution over a number of painful years enabled us to stay in the game and reach the finish line.