VOG(victoria oil and gas)

Trader1991

I bought a good amount of shares in this company about a year ago. I researched the company at the time and the prospects looked good. I got in at £0.056 and the price is now at £0.031....I understand the company has some complications atm, however its prospects are as good as ever..

Could someone please fill me in as to why this share is performing so poorly?
Thanks.

Smcgie

Trader1991 wrote: »

I bought a good amount of shares in this company about a year ago. I researched the company at the time and the prospects looked good. I got in at £0.056 and the price is now at £0.031....I understand the company has some complications atm, however its prospects are as good as ever..

Could someone please fill me in as to why this share is performing so poorly?
Thanks.

I previously held these and considering dipping my toe again. The main reason for sp drop is massive share dilution to fund the logbaba project. That and a further share issue to fund the pipeline. The assests are wonderful the management are questionable.

dunkamania

Trader1991 wrote: »

Could someone please fill me in as to why this share is performing so poorly?

More sellers than buyers...........

pocketdooz

Some possible reasons might include:

1) The Company has made a cumulative revenue of 2.3 million since 2006, with turnover reduced to ZERO in 2009.

2) The Company has made an operating loss every year of operation.

3) The Company burns up cash every year, only replacing lost cashflow by using new shares or taking on more debt.

4) In the first half of 2010, the Company issued 1.92 million shares to Directors in lieu of cash salaries. They also issued 10.3 million shares to 'advisors' in lieu of cash payments and another 48.1 million shares to the employee share plan. You might want to investigate this to see exactly what is going on here.

5) The Company is essentially a leveraged bet on two fields in instable countries - Russia and Cameroon.

As a matter of interest, what research did you do that led you to buy this stock?

.

Raskolnikov

pocketdooz wrote: »

Some possible reasons might include:

1) The Company has made a cumulative revenue of 2.3 million since 2006, with turnover reduced to ZERO in 2009.

2) The Company has made an operating loss every year of operation.

3) The Company burns up cash every year, only replacing lost cashflow by using new shares or taking on more debt.

4) In the first half of 2010, the Company issued 1.92 million shares to Directors in lieu of cash salaries. They also issued 10.3 million shares to 'advisors' in lieu of cash payments and another 48.1 million shares to the employee share plan. You might want to investigate this to see exactly what is going on here.

5) The Company is essentially a leveraged bet on two fields in instable countries - Russia and Cameroon.

As a matter of interest, what research did you do that led you to buy this stock?

.

Don't try and confuse the matter with your financial mumbo-jumbo, the prospects for this company are very positive.

Trader1991

pocketdooz wrote: »

Some possible reasons might include:

1) The Company has made a cumulative revenue of 2.3 million since 2006, with turnover reduced to ZERO in 2009.

2) The Company has made an operating loss every year of operation.

3) The Company burns up cash every year, only replacing lost cashflow by using new shares or taking on more debt.

4) In the first half of 2010, the Company issued 1.92 million shares to Directors in lieu of cash salaries. They also issued 10.3 million shares to 'advisors' in lieu of cash payments and another 48.1 million shares to the employee share plan. You might want to investigate this to see exactly what is going on here.

5) The Company is essentially a leveraged bet on two fields in instable countries - Russia and Cameroon.

As a matter of interest, what research did you do that led you to buy this stock?

.

I wouldnt put the company down because it hasnt made huge turnovers in the last few years or the constant issuing of new shares. The company needs to fund its projects somehow and the revenues will inevitabley increase once these projects are "up and running"..

Trader1991

dunkamania wrote: »

More sellers than buyers...........

very helpful

ixus

Trader1991 wrote: »

Could someone please fill me in as to why this share is performing so poorly?
...
....
I wouldnt put the company down because it hasnt made huge turnovers in the last few years or the constant issuing of new shares. The company needs to fund its projects somehow and the revenues will inevitabley increase once these projects are "up and running"..

Trader, you've just been given reasons by Smcgie, pocket and dunk as to why the share might be performing poorly. It is what you asked for, right?

Have you ever read Reminiscence of a Stock Operator? You should, some of the quotes below from you fit it to a tee! Honest to god, read the book. It could really help you.

Trader1991 wrote: »

I researched the company at the time and the prospects looked good.....
...
I understand the company has some complications atm, however its prospects are as good as ever..
...
the revenues will inevitabley increase once these projects are "up and running"..

If pockets notes are correct, it's pretty clear to me that this stock is one that could either be a massive home run or a complete dud. The home run being if their projects are successful, the dud if not. This makes it a pretty risky stock. The longer it goes without return, revenue, cashflow etc. the less the stock becomes worth.

royaler83

Trader1991 wrote: »

I wouldnt put the company down because it hasnt made huge turnovers in the last few years or the constant issuing of new shares. The company needs to fund its projects somehow and the revenues will inevitabley increase once these projects are "up and running"..

Correct, oil exploration companies don't make money until they start production.

Rask and Pocket, it may not be you're type of investment but please don't run people down just because it doesn't tick your boxes as an investment opportunity.

For those who prefer higher risk picks, there is money to be made on volatile stocks like these.

Raskolnikov

royaler83 wrote: »

Rask and Pocket, it may not be you're type of investment but please don't run people down just because it doesn't tick your boxes as an investment opportunity.

We're running these ideas down because there is very rarely any actual thesis as to why the stock is attractive. It's the same with bank shares. All we ever hear is that these are good long-term investments. Not once has anyone ever stated what a bank/oil&gas company could earn, and what a fair multiple of those earnings might be. When you think about that statement, it's astonishing. How many threads on oil/gas/banks have we had, and despite that, there isn't even the most rudimentary of analysis in any of these threads.

For the record, I actually own one exploration company that has geysered my money 3 fold since I invested in it. It's the lowest cost and most efficient explorers in their field and is trading below their stated reserves. It has a CEO who is not only brilliant, smart, but he's incredibly honest and is totally aligned to shareholders interests. You'd think such a great company would have been mention by now, but nope, people would rather shovel money into obscure penny stocks that they don't know anything about it.

Trader1991

Have you ever read Reminiscence of a Stock Operator? You should, some of the quotes below from you fit it to a tee! Honest to god, read the book. It could really help you.

No never read it. what do you mean it would fit me to a tee?

ixus

royaler83 wrote: »

Correct, oil exploration companies don't make money until they start production.

Rask and Pocket, it may not be you're type of investment but please don't run people down just because it doesn't tick your boxes as an investment opportunity.

For those who prefer higher risk picks, there is money to be made on volatile stocks like these.

Sorry but, Pocket gave five reasons as to why the company may be operating at its current price. That was the question that was asked? Is this not clear?

He then asked what research led the OP to purchasing the stock. That's a fair question. I'm interested to know too. So far, all the OP has mentioned was the word "prospects". That means absolutely nothing to me. It could mean that the company will find a pot of gold at the end of a rainbow.

The OP should provide some detail.

What is it you, or the OP want to hear? "mate, I don't know why these shares are down, but it's a sure bet they'll go back up to where they came from soon. Don't people know about the prospects?! It's sure to go up ten fold. Load that truck up!"

Trader1991

ixus wrote: »

Sorry but, Pocket gave five reasons as to why the company may be operating at its current price. That was the question that was asked? Is this not clear?

He then asked what research led the OP to purchasing the stock. That's a fair question. I'm interested to know too. So far, all the OP has mentioned was the word "prospects". That means absolutely nothing to me. It could mean that the company will find a pot of gold at the end of a rainbow.

The OP should provide some detail.

What is it you, or the OP want to hear? "mate, I don't know why these shares are down, but it's a sure bet they'll go back up to where they came from soon. Don't people know about the prospects?! It's sure to go up ten fold. Load that truck up!"

My research at the time was as follows:

1. I looked into the companies accounts/past performance.
2. I looked at the management of the company to see what experience they had and their past performance in previous companies.
3. I looked at the companies assets and liabilities.
4. I looked at the copanies sources of finances.
5. And finally I looked at the projects the company was undertaking and the likelyhood of these projects becoming a success.

pocketdooz

Trader1991 wrote: »

I wouldnt put the company down because it hasnt made huge turnovers in the last few years or the constant issuing of new shares. The company needs to fund its projects somehow and the revenues will inevitabley increase once these projects are "up and running"..

I'm not "putting the company down", I'm trying to help you answer your question.



.

pocketdooz

Trader1991 wrote: »

My research at the time was as follows:

1. I looked into the companies accounts/past performance.
2. I looked at the management of the company to see what experience they had and their past performance in previous companies.
3. I looked at the companies assets and liabilities.
4. I looked at the copanies sources of finances.
5. And finally I looked at the projects the company was undertaking and the likelyhood of these projects becoming a success.

I do this for a living. I spent 15 minutes going through the company's financials today and of the 5 items listed here, numbers 1 through 4 would make most investors run a mile. However, I don't know the ins and outs of oil&gas/exploration companies - as someone else correctly pointed out, there are large sunk costs in these companies initially.

Number 5 is more difficult to get a good handle on so I assume is the one that most influenced your decision?

.

ixus

Trader1991 wrote: »

No never read it. what do you mean it would fit me to a tee?

Not fit you, but the quotes I highlighted fit the book. It's one of the best books I think you could read. It will open your eyes.

In fact, I need to read it again as I've just realised that some of my trades of late have been the very antithesis of it. It's a fictional but non-fiction book. One of the key elements is the ticker doesn't lie and don't trade against it because you think you're right. I was doing that recently and I was wrong and it was a major opportunity cost for me.

alanceltic

Raskolnikov wrote: »

For the record, I actually own one exploration company that has geysered my money 3 fold since I invested in it. It's the lowest cost and most efficient explorers in their field and is trading below their stated reserves. It has a CEO who is not only brilliant, smart, but he's incredibly honest and is totally aligned to shareholders interests.

Would you mind if i asked for the ticker? I would be interesting in spreading something into this sector, as of yet the whole sector is way too much volatile to tempt me but I would be interested in a more mature company in this area, i realise the potential upside on a more mature company is more limited but I can live with that for decent divs & growth. Cheers Al

Trader1991

ixus wrote: »

Not fit you, but the quotes I highlighted fit the book. It's one of the best books I think you could read. It will open your eyes.

In fact, I need to read it again as I've just realised that some of my trades of late have been the very antithesis of it. It's a fictional but non-fiction book. One of the key elements is the ticker doesn't lie and don't trade against it because you think you're right. I was doing that recently and I was wrong and it was a major opportunity cost for me.

Fair enough

Raskolnikov

alanceltic wrote: »

Would you mind if i asked for the ticker? I would be interesting in spreading something into this sector, as of yet the whole sector is way too much volatile to tempt me but I would be interested in a more mature company in this area, i realise the potential upside on a more mature company is more limited but I can live with that for decent divs & growth. Cheers Al

Contango Oil and Gas - MCF

The name of the CEO is Ken Peak. He owns 25% of the company. He is one of the straightest shooting CEO's I've ever come across. He doesn't leverage the company, he doesn't speculate on future gas prices, he will always maintain liquidity and never put the company in jeopardy. I would suggest that you read all his presentations and find any material you can relating to him online. Read everything - you will learn a lot off him. Then I would read the most recent Contango annual reports. Because Peak is so shareholder friend, he gives you all the information you need to value the company. It's quite simple really, proven reserves X current price - costs of production. There is a good margin of safety in Contango, but also considerable upside that you get for free. Looking at the company, conservatively, I think that you could double your money in 4-5 years, but because you're getting upside for free, there's no telling how much you could make if natural gas prices spiked again.