As promised, it’s a wee bit late, (I am in a different time-zone at the moment!) here’s an update as to what I have garnered re’ the recent rumours and rumblings currently doing the rounds.
I can’t understand the investor panic that seems to of set in. I have made various enquiries re’ the rumours being penned online as to a disappointing CPR and a proposed placing/dilution.
Lets deal with the CPR there is NO truth whatsoever as to the rumours currently being bandied about as I understand it the CPR is expected to quantify the recoverable resources to well over 200, mmbls and as XEL keep stating this figure does not include advanced recovery techniques which will further add to the upside. The problem investors have here seems to me to be of their own making “the devil makes work for idle hands”. There are no Institutions selling their stock. I can find no evidence of any Major holder being anything other than happy with their holding. That in a nutshell should tell you thus. The institutions as I understand it see at least 100% upside from where the XEL sp is AS OF NOW! Some are looking at a possible 900p on sustained production.
As for a rights issue the company have always maintained that somewhere along the line there would be one. They have been quite open about this. The feeling is that there will be an institutional offering. Private Investors shouldn’t concern themselves about what price the offering comes in at as it is immaterial to their investment.Once fully funded the sp will fly. XEL will double from where they currently sit regardless. Most in the city are invested for production and no one in the city is selling their stake regardless of what private investors post or think. The professionals are all over this stock awaiting production or a further piece of the pie from a placing.
They are sat on hundreds of millions of barrels of oil in the North Sea, the oil IS there, the infrastructure is there, the institutions are there, BP are there, the Bentley alliance is there and shortly the Rowan Norway will be there!
It is nailed on that production will double this sp! Ignore the siren calls and JUST hold your stock production is pencilled in for Q4.
They should be trading in excess of 400p. I wouldn’t concern myself if I was a holder of this stock I would just go along for the ride they will probably hit 500/600p as they near Q4. An absolute bargain at these prices! Hold or sell the choice is yours.