FDM 0.00% 1.1¢ freedom oil and gas ltd

So whats up with the share price? up significantly over the last...

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    So whats up with the share price? up significantly over the last 5 days, albeit from a low base.
    I'm certainly not getting excited, but see a few possible reasons:

    As we've seen recently, a big buy order going though has propelled the sp due to lack of liquidity. Not sure if this applies currently as most of the buys have been small volume.

    Leaky ship? possibly more news re the leases, or more importantly "the acquisition", again mostly small buys in an illiquid stock.

    It would be nice if the price rise was due to a heap of Permian, Eagle Ford, Bakken, SCOOP or STACK leases coming onto the market (the best onshore plays) ???

    Unfortunately I think it's because WTI has gone to $40, which may suit a producer, but not an acquirer.

    The press say this is because of the lower USD and the meeting planned by OPEC, Russia to limit production. I agree with the affect the USD has on POO, however OPEC etc are already producing at max capacity (which can't last without investment) in order to make up revenue shortfalls. Iran will never agree to limit production while they are trying to get back to pre sanction levels (this will take investment which wont happen, or will be slow to happen at current POO levels)

    Having said the above, the annual report hinted at doubts by our potential financial partners due to the volitilty of POO. A more positive market will be good for this.

    However, I doubt the POO rally will continue on fundamentals, but even if it does, the damage has already been done to the over leveraged companies leading into the April bank reevaluations. $40 oil is still well below most breakeven values. Most leases in "the best onshore plays" pay 25% royalty, so on $40 oil, they are only getting $30, less than 5% is profitable at this level. Even companies with this prime acreage, also have other less favourable acreage which means they need to divest to stay afloat.

    Hopefully this recent POO rally has put the "hurry up" message to MAD's management.
 
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