Africa Oil AOIFF drop

By bkkben, November 27, 2012

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

Anybody having an idea as to what caused the fast drop in AOIFF yesterday – some rumors and then profit taking from the good run it had so far this year?
Cheers!

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12 Comments on " Africa Oil AOIFF drop"

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Travis Johnson, Stock Gumshoe
Admin
4828
November 27, 2012 11:47 am
This was pretty clearly profit taking on the announcement of initial results from their second well — sounded to me like the news was positive in that the reservoir was confirmed to some degree, but perhaps it wasn’t as exciting as some had hoped since there wasn’t the overwhelmingly large find that they had in their first hole. With a stock that’s up 500% in a year, a “kind of what was expected” result is probably enough to get a 20% selloff as folks book some profits. They’re having a conference call to discuss the results right now — I’m… Read more »
herbalix
Irregular
101
November 27, 2012 12:22 pm

Thank You, Travis, I am hanging in there for a while at least. As usual I was a bit quick on the draw, ( i have to work on that) but all is not lost. You told us from the beginning it could be a bumpy ride, just did not know it was that bumpy!
Herbert

Travis Johnson, Stock Gumshoe
Admin
4828
November 27, 2012 12:47 pm

Despite being a $2 billion company, there’s plenty of room for dramatic moves — and there remain big picture risks, too, beyond the simple risk of bad drilling results. I particularly worry about political risk in a country that is picturing substantial oil wealth where there has been none before — Kenya is quite stable and advanced, particularly in comparison to some of their neighbors, but they don’t really have an energy policy, and we have only to look at Mongolia to see what happens when politicians think they’ve been screwed out of “their” resources.

John Harris
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John Harris
November 27, 2012 12:31 pm
I bought in at $1.50 and sold about 3/4 of my initial lot somewhere over $7 (with a stop loss that was risky for any thinly traded stock – but I was having a hard time beleiveing it was not just a pump and dump stock, so I put in the trailing stop. It took a quick dip one day (down to around $3) and stopped out but by the time my shares actually sold the dip recovered and I got a nice profit – so now like Travis, I am holding on to free shares and will let them… Read more »
Franklin
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Franklin
November 27, 2012 4:59 pm

Travis, thank you, indeed, for your response!

Don Fidlow
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Don Fidlow
November 29, 2012 5:06 pm

the AOIFF drop off was an overnight (prearranged ) private placement at $7.50 p/ sh. AOIFF netted $ 300 million . To kee p them and Tullow ( its 50% owner & drilling partner ) in drilling money fo r years

fischershaw
Irregular
33
fischershaw
December 13, 2012 9:58 am

Or is it that the party is over and the stock is returning to the $1.50-$1.75 level? Not to be too pessimistic, but I imagine that some hype followers are pulling out after having inflated the price.

Travis Johnson, Stock Gumshoe
Admin
4828
December 13, 2012 10:13 am
It shouldn’t return to the pre-drilling level, to be sure, since they did find a lot of oil. But other than that, there’s a lot of variation in the possible valuation you can ascribe to this company … and certainly an incredible amount of selling pressure right now. Whether it’s because of year-end selling or disappointment with the results or the market smelling bad future results, I don’t know. I haven’t seen a fundamental reason to drop my “let the profits ride” strategy on my AOI shares, but it has indeed been ugly for the last couple weeks.
fischershaw
Irregular
33
fischershaw
December 13, 2012 10:15 am

Ah, then the perfect storm: Fiscal Cliff, end of year, hype followers pulling out. So then a possible buying opportunity approaching…

Travis Johnson, Stock Gumshoe
Admin
4828
December 13, 2012 12:34 pm

That very much depends on future drilling results, they’re years away from any actual production so this is a speculative stock whether it’s a $500 million company or a $2 billion company. The big secondary offering was clearly a downdraft as well, though now they’ve got plenty of money to keep exploring.

jim peters
Guest
0
February 16, 2013 4:58 pm

VIDEO 16th Feb North Africa and the Eastern Mediterranean – an exploration “Spring”?
http://www.directorstalk.com/orth-africa-and-the-eastern-mediterranean-an-exploration-spring/

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