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Elixir – EXR

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    Elixir – EXR

    Hi Guys, Thanks for your unexpected interactive response to recent questions. EXR is a stock you would not cover and would be regarded as very speculative especially when I gained exposure in 2020. I have traded the stock successfully as it is fairly liquid and have built up what is a significant exposure in terms of the spec part of my investments. It seems that the risk factor has been somewhat mitigated according to the latest annoucement in regard to its daydream gas well in what appears a very prospective area in the friendly mining area in QLD. The MD has made what seems to me comments that are unusually very positive. It reached hights of 50 odd cents when it only had Mongolian assets but has not shown any increment in regard to its QLD assets? In fact dropped to under 10 cents with recovery to current levels recently! What are your thoughts on the prospects of this share and its upcoming announcement in the next couple of weeks.

    Answer

    Hi Vernon,

    Your taking us on a learning curve with this ~$200mn oil and gas explorer.  Elixir’s Managing Director, Neil Young, said: “We are very pleased to continue the close operational working relationship with our neighbouring Operator over such matters as coordinating the utilization of the key CTU.  And of course we are very excited by the now imminent final stage of the to–date very successful Daydream–2 work program.”

    Sounds positive, though worth noting, that the leaders of all companies are paid to promote them, and taking MD/CEO commentary on face value can often be a risk. The fact that these recent comments failed to move the dial shows that investors, like you, want more concrete developments vs rhetoric.

    No broker covers the stock with the volatile share price swings driven by company announcements and order flow. We can only consider EXR from a technical risk/reward perspective, and with the stock trading ~16c we can only adopt a neutral stance, I’m afraid it feels a touch too hard our end, BUT, we don’t know the company well, and our insight/value add here is very limited.

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    Elixir Energy Ltd (EXR)
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