Dareau,

Short Answer:  I am still long and strong.

Long Answer:

In one of my last posts in 2012 I mentioned that the next 12 months would be a long boring wait but that it would be an excellent time to accumulate shares and that there would be enough for all if we each took turns.

That said, I have quadrupled what I held a year ago in terms of the number of shares at .17 cents, .155 cents and on Monday at .12 cents.  I still plan on buying more over the next couple of months but could ride what I have now for the next 18 months.

I see these buying opportunities as being able to get into last year's PP for a 70% discount.  PRE paid .35 cents with .60 cent warrants.  I recently paid .12 cents and do not need the warrants.

I have avoided the SH boards for the most part as I have a strategy and false information can create doubts in even the strongest investor.  I hold to the decision I made to stick with this company after the Jaguar news last year.  These were not two dry holes (Eagle-1 and Jaguar-1) but one dry hole at low depth and another with oil showings that will likely be kept secret for a long time given the players involved (Repsol, YPF and Tullow).  Last year we had the gong show with Repsol and Argentina whereby YPF was expropriated (stolen) from their hands.  I am surprised they even finished drilling when 30% of the prize belonged to Argentina through its ownership of YPF Guyana.  If you are wondering why the Jaguar concession renewal is taking so long, it is most likely a result of the YPF scandal and Guyana not wanting to give an Argentinian state Oil company part control over a potential elephant oil field off their shores.  I am sure the lawyers are working overtime on that one and Repsol is taking the fifth when it comes to what they really found on their way down to the HPHT zone (which by the way is 100% true.  I have it from confirmed sources that the well was abandoned for safety reasons and safety reasons only.  They really wanted to keep going given how close they were and pushed it to the edge of the limits but in the end could not justify a blow-out like BP had in the gulf.)

The fact we are still talking on this board is a miracle given that this company could have been dead 20 times over the past ten years.  Gun boats, International Maritime Boundary arbitration, rig delays, mismanagement, dry wells, the Argentina RPF scandal, cost overruns on Eagle-1 and subsequent bailout for 30M by PRE and of course the Jaguar-1 temporary abandon and increased costs.

When I look at the 11M CGX owes to the Georgetown backer (whoever is floating the current debt letter to them) this seems like small stuff compared to all of these other events the past ten years and longer.  I have followed this company since 2006 and started invested seriously in 2011.  They will get through this month (February 28 is the deadline for repayment of the loan) and they will get through contracting another rig and JV with a partner.  They hold the keys to the kingdom in terms of having the right to drill the source kitchen in Guyana.  All the 2-Ds and 3-Ds have been shot.  They have the data from 2 recent exploratory wells.  And they have the exclusive rights to drill in most of the key off-shore concessions (and 25% of the Georgetown concession should it be renewed).

If I had asked any of you a year ago if I could sell you my shares for .14 cents, you would have sold everything you had and bought them from me.  Now somebody else is doing that for us - selling shares cheap.  I can understand why.  The highest volume of shares traded last year was between 1.20 and 1.45.  If one is going to sell for whatever reason and they bought at that price, it does not really matter in the end if they get .18 cents, .15 cents or even .10 cents.  They have lost their 90% and whether it is 88% or 94% it does not matter to them.

On the other hand, for me to buy shares at .12 cents or .17 cents is a gift when you consider the lowest PP this company has ever had was .35 cents.

My recommendation based on what I have seen the past couple of years..  Load up at these prices and wait for the announcement of the drilling program and the contract for a rig.  Sell half of your shares when the price jumps 3X and then ride the rest into the drilling campaign.  If they hit oil and the stock hits $2 (800M market cap) you have experience a 10X bagger on 50% of your investment and a 3x bagger on the other 50%.  If they do not hit you are still ahead 3x on the 50%.

But it will take time to get there.  The only wildcard in all of this is a buy-out whereby there will not be a chance to get back in.  The oil industry is experiencing many M&As lately and I cannot see why somebody would not take a shot at OYL for a buck.  If that happens those on the sidelines will miss out.  The chances of that are slim though as PRE holds 25% of the shares and warrants at .60 cents.  But then again, maybe PRE will take a shot at that price and control the whole area.   One never knows.

Next steps are the terms of the outstanding $11 M mentioned in November's MD&A, then a decision by Guyana on the Georgetown concession (the war between YPF Guyana (owned by YPF Argentina) and Repsol), and then of course some JV news down the line.  If they are going to PP then look for the stock price to jump back to .35 cents whereby PRE will get first option.  BTW, after the news today, PRE has 60 days to make a decision on whether to invest 50% to get 33% on the new concessions.  That was mentioned in the last MD&A.  So that news could come out to.

In the meantime, I am enjoying life and seriously placing this shares under my pillow and waiting for 2014.  Will drop by from time to time but am still very long and strong on this company.  Great to see the regulars still hanging around from time to time.  You know who you are.  We will make more money on this more at .14 cents than we could have at $1.  It is just a matter of being patient.

M1.