he has some big targets after recent PR, i bought the stock for 2 bucks at the beggining, but wondering if i should add a bit to my position
I had a discussion with Pan Orient Energy Corp (POE.v) CEO Jeff Chisholm late yesterday. I thought through the night and decided to add more to my already big position in POE this morning. POE L44/L33 are known for the water issue, basically the wells were run down by water in a few months. However, the new discovery is conventional sandstone reservoirs, which is very different from volcanic reservoirs in L44/L33. They are hoping that the well can run at 1000 bpd for years to come. Remember they are running at reduced rate due to mechanical limit. Investors should carefully read through the recent POE representations, from page 13 - 17. You can see they are looking for add another 10 dollar to their NAV at L53. If successful, we are looking at 20 dollar Thailand NAV plus potential 10-20 NAV from Indonesia by the end of this year, not including oil sand and existing cash. From the cashflow point of view, POE have L53-D2 just drilled, L53-G close to finish, plus 12 more wells. The D2 greatly de-risked all of the rest wells. If I can apply 50% chance for all the well, I am getting 7000 bpd plus the existing 2000 bpd, we are looking potential 9000 bpd vs 2500 bpd guidance. The cashflow would be 4-5 dollar, if you apply 3-5 times multiple, we can see 20 dollar stock. From both NAV and cashflow point of view, the stock still looks extremely cheap at 3.4 dollar. Also remember, their well is shallow and very inexpensive. Cost about 1 million per well, we are looking at paying back the drilling cost within 2 weeks. That's why I am more excited and decided to add more to my positions.