|
|
Hyperdynamics Corporation
|
|
||
Strong Buy
Definition: Elephant: a billion barrel oil discovery.A long-time friend and fellow investor in Israel asks several questions, trying to understand why HDY's share price is not reflecting the types of change we'd expected. My response:
Udi. First off---the PSA may be the best any company has ever gotten. It encompasses all the area HDY could want, contains sites designated primary targets for first drilling. Also, it is an enormous area---will require years to explore and possibly exploit. And terms are very favorable for HDY and Guinea both---ensuring a contract that will likely be free of angry fighting later on. Until production per site reaches more than 100,000 barrels per day, Guinea gets no more than 40%, 60% thereafter. Typically, wells do not produce 100,000. In most instances, we'll probably receive 75% or thereabouts. Taxes which can often eat up 50% of production values are to be borne by Guinea. This is one of the best arrangements of all for it means we pay drilling expenses only and the contract enables us to reclaim expenses through production. There are time constraints as in all contracts. They're drawn according to things obviously guaranteed by HDY or we wouldn't have signed them in the first place. There are built-in extensions as well. Remember---Guinea wants this to work out, too! The reason the share price is down is probably a combination of things that may include: 1. Pressure from other interests to beat HDY up in the hopes of a hostile takeover...one I'm certain would not work. 2. Some people may be angry with HDY and want to maliciously (hatefully) hurt the company. (Trendsetter) 3. Cornell may be liquidating its original 3 million shares. 4. The retail crowd (you and I) may need more time to digest the meaning of the 8-K. It took most of us a few hours of reading and thinking aloud and sharing with others just to feel reasonably comfortable that we understood it. Now, what would a new investor make of it? And suppose that new investor had no previous experience with the energy sector and production sharing contracts/agreements and suppose that person bought into the notion that peak oil is bullshit foisted by political power-people and there's plenty of cheap oil and gas is gonna get cheaper and cheaper at the pump and ethanol will solve all our problems although Hispanics will run out of tortillas at some point and pigs will have to eat discarded rubber tires. Do you see how dumb this is? There are mind-games played everywhere in all situations at all times----the trouble is that we don't always see it happening---but we must, else we'll be overrun by self interests not aligned with our own. Memorize this, please: Things change because they're driven by energy and energy can never remain constant. It morphs and often actually reverses direction. At the same time this is happening, we must always move forward no matter what...and we will! We haven't been beaten or robbed---we just didn't see things going on behind the scenes. We do, now---and many longs have been adding shares, realizing the opportunity in HDY has never been greater. Don't be afraid to believe. We've done our work, bought our shares, and placed our feet in a forward attitude. Negative energies have slowed things down a bit and they may continue to influence our ease of motion for awhile---until our positive energies outperform and take over, reversing negative sentiments. And that's when we become thankful for having stayed the course. HDY is a nickel in the slot of a vending machine...it just has to slide on down to it's rightful spot so that the goodies are dispensed and I'm betting it'll turn out to be a gusher. And when we hit the oil we expect to hit, the gusher may become bigger. Just keep one thing in mind: Forward motion is the key---every moment brings us closer to the goal. Whoah!!! What was that? Did you hear that whooshing sound? Woman: It's a bird!
Man: No, it's a plane...
HDY in chorus:
No, damnit! It's an elephant and another elephant and---geesh!---it's a fock of flucking elephants with rigs mounted atop and---and---why they're all in forward motion and coming right at us!!! Believe...just believe. Dreams happen all the time. Maybe it'll be today? Len |
return to message board, top of board |
Msg # | Subject | Author | Recs | Date Posted |
20974 | Re: Definition: Elephant: a billion barrel oil discovery. to LEN........ | udisgv | 13 | 9/29/2006 10:42:01 AM |