Twills08
Oct 2, 5:18 PM
$BATL For those of you wondering what to do…should I sell or should I stay or should I buy more?
The investor update was revealing in a number of ways. One, they received multiple bids for their proffered asset/acreage sale. BATL turned all of them down. This appears to be due to the high oil prices and ultimately the profit which can be made from developing the oil on that land instead of selling it.
My original premise for investing in this company was due to the high price of oil, and what I see as a never-ending and/or prolonged conflict with Iran, which has become a regional superpower since this all began in February. That thesis is unchanged.
Most micro oilers and Permian basin companies profit at about the
$65-
$70 per barrel range. Most of them are hedged against oil prices in order to maintain a minimum of profit and operability. BATL is no different. They are hedged until eoy 2026.
Most of them also have ATM’s.
$SKYQ,
$INDO,
$EONR etc all have/had/do operate with an ATM in the background. That’s unfortunately a fact of life for most microcap and small cap businesses. Luckily, BATL management has used theirs to massively pay down debt. They are now operating with cash on hand, mitigated debt, and active drilling for more wells ongoing.
The asset sale was the cherry on the top for my original investment. It was a catalyst to contribute to a pump in price back to a reasonable valuation. This company should be trading around the
$3 range just based off their ER numbers alone. Politics and massive shorting have made scalping and short swing trades in oilers more common than not, and most investors these days look to the brightest color of green on their X or ST page rather than sticking with a solid investment thesis.
So, do you keep your investment in an oil company that has massively paid down debt, increased operating cash on hand, actively expanding their well count, and whose oil hedge is up at the end of the year? In less than three months?
$WTI is currently
$91 barrel…. It will likely see a low of
$85, and then head back to three digits after midterms. The answer for me is simple. I’ll be patient.
You have to decide for yourself, however.
NFA as always.
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