Action speaks louder than words. Holding a position as you do has you as a permabull on this stock on my book. With respect to releasing BPD estimates, the market is going to ask that question one way or another so they may as well put a number out there.
Treaty isn't going to get away with drilling 21 wells and not giving us some idea of what they are expecting, and the number they are telling us is 19 bpd per well. The next part of the process is delivering the goods, which has been problematic over the past couple of years.
It comes down to 2 questions:
1. Is there oil in the ground
2. Can you efficiently recover commercial quantities of it
The first issue is an "either/or" that is beyond any company's control. They obviously think so going in but at the end of the day that is up to where and how phytoplankton died and were processed over the last million years.
The second issue, assuming that the first issue is yes, is what the E&P company is focused on. From what I've seen from the "in house" drilling strategy, the company has been very inefficient in W. Texas. Rather than repeating the same embarrassing and money losing mistakes, they have gone back to the traditional route and hired TNC to get the job done in the field. Their vendor touts a blue chip list of clients and that increases my confidence that they can get the job done.
To me this is like if the Oakland Raiders fired everyone on their defense and went out and hired the entire defense of the Steelers. Sure, they are still the Raiders but they just acquired the top NFL defense. The Houston Texans didn't even do anything that extreme, they just hired Wade Philips after he was sacked by the Cowboys and our defense now leads league in balls swatted at the line and we have only 2 losses this season.
Good management teams are not good because they don't make mistakes, they are good because when they make a mistake they learn from it and then get to work on fixing the problem.
To extend on that point, I have a hunch that Bruce may be sandbagging that BPD estimate and that the market is going to discount that number further hopefully to under 100 bpd. The guy was a trade for many years and he knows the value of the upside surprise.
This is going to be a war that is won in the oil fields, not the message boards or even this rigged charade of a market on TECO. The bears are a lot stronger than I originally thought. A lot of the analysis that I do assumes a certain degree of free markets, not a cartel of operators who have the power to set prices, which is what we are facing right now.
However, unless these bears can set oil prices, too, their control over the stock will begin to fade at a rate proportional to the growth rate of TECO's bpd production.
