A dude on hotcopper asked me about OXX... thought Id post it here too...
jakspara,
I have looked at OXX before and If I thought it had more to offer me than my current investments for the given level of risks, then id sell them quickly...in considering OXX I should probably sell NGE as OXX have as much happening but in a much much shorter amount of time...THE most important criteria in oil IS TIME... Perhaps if Artemis fails and OXX falls enough I might switch for abit...
heres for the wrap though,
OXX is a very good speculative investment...
A minnow with true leadership like this is not easy to find... The company has strong foundations, through to its portfolio of permits to make a good go of this elephant hunting...
Only you can weigh up your risk tolerance... I cant tell you that OXX is going to strike a big WA gas find...
Its got the right mixture for it to eventually happen...
what makes a company like OXX stack up is the low market cap intensifies leverage on any big find..... This is more evident than ANY OTHER ASX oiler pursuing offshore WA...
If next years elephant comes in a baby Giraffe, then the market could lose interest while the company rebuilds for its next drilling campaign...
Of course Artemis is in there for OXX's CUE holdings (6-7% I think)... but holding the underlying asset is perferrable...(I wont go into this)...
Of course some of this downside on failure could be offset upon new market information that could provide downside support, like a new farmin deal coming anytime......
To be honest though,
The phases of building an oiler like this, from farmin, to timetable to spud etc high risk drilling which imply the usual traits of rebuilding an oil company after failure make this a good trading stock...On the ASX this company is BESBS at its finest... perhaps maybe not a good investing stock in the medium term, but long term set to find something...
who knows what OXX hit in the shorter term...
As I said...high risk, high impact drilling in the oil scene, along with the volatility really makes this a traders stock dude...<> If yourve got the stomach to ride out a few wells that could fail, then you will do well at the end... The biggest killer is giving up if it all goes wrong on the first outing...
the economics of this company as an investment ONLY stack up through holding the stock with the intention as a long term investment.. OXX will very likely attract further farmin deals which will roll out more Elephants...
and that means more chances at tangling with the oil gods...
A friend of mine summed up OXX well...
He said,
"My mate likes OXX. So do I, but CSG is more certain."
SO another answer to your question is...
what are you giving up to hold OXX, what is your opportunity cost?
What my mate has been saying (bermuda hehehe)... what I am saying is that CSG will return like OXX will IF it strikes an elephant... and guess what?
CSG is certain to happen, and in a big way...
But I comparatively like CUE as much as I like CSG...
The decision to switch from CSG, had a few stints with VPE, RPM and the switch to CUE has been successful as many issues have slown CSG... but CSG is building steam again...
and so is CUE...
so its all good... whatever way you get there...
find your path and stick to it...
CUE have better, more mature prospects/drill ready than OXX in WA, and in NZ... the company is in a better position to deliver you quicker and still very high returns that will be more supported upon failure, and with the appraisal and reserves etc..... but of course the leverage, and risks are different between the two making each investment equally compelling in their own right...
The key difference for OXX, is the fact that if the company fails on its first outing, it will take LONGER to get the company drill ready again...This is inpart because of the size, and cash backing of OXX making it more vulnerable with corporate activity...
Without going into detail of OXX's actual prospects (which is what you may have wanted)... I hope my ideas have helped...
You are reading my mind though dude... When CUE hits $1 I will look to find the next oiler as the big leverage in CUE will thin... I will still hold CUE, just look to grow myself another branch... OXX is a lead candidate..
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On another note,
How sad is this Pike river coal explosion... very sad week for the New Zealand Coal mining industry...
.^sc
Octanex
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Originally Posted by Anna Naum
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