Atticvs Research

The Long Case for China North East Petroleum

Don't know jrs. I did see the stock run to $4.55 but I didn't buy because; with so little known about the company's prospects, with so little information available in the public domain at that time, with such a short track record of delivering good quarterly results (Q2 which was just published, was then the only set of decent results), with no mention of their multi-year drilling program, and without having renegotiated the extended well-drilling payment terms with PetroChina - against all this it didn't look like a good risk-reward to me back then. Additionally, from the daily volume of shares traded it seemed to me that daytraders were piling in and would probably disappear just as quickly as they had arrived, and they did.

Since then the CNEH picture has changed a great deal for the better. As good information is made available and excellent financial results are reported during 2008 there is every reason to believe that the stock price will evidence a strong up-slope during the year with some peaks and troughs along the way. It's a very cheap stock.