Josef Schachter, President, Schachter Asset Management
FOCUS: Oil & Gas Stocks
Niko Resources (NKO TSX)
Niko has resolved the maturing convertible debentures issue via a common and convertible debenture raise and now has the funds to move forward on their extensive exploration program. The next high impact well in Indonesia is currently drilling at Cikar #1 and is targeting more than 300 Million BOE. Their partner is Statoil (paying for the bulk of the wells costs) - NKO has a 40 percent interest. If successful this could be worth more than the current stock price. In addition, there is progress to resolving the pricing dispute in India which would mean a higher commodity price environment later this year or in 2014, and a move to growing production via the development of satellite discoveries at D6 in 2014/2015. In addition exploration drilling activity should commence in India in Q2 at the MJ1 prospect (an oil and gas prospect). Our 12-month risked target is $20.