NEP is just starting to wake up as people realize that this audit is behind them. NEP hiring Earnst & Young to help them build sustainable US acceptable auditing practices was a great move to show they are committed to staying compliant. Many good China companies will go through the same exercise as they were simply not clear on the rules required for GAAP.
Today’s announcement is awesome, NEP is drilling 100 new wells for a new customer (not Petro China).
..however, NEP needs more than just drilling revenue. They need new leases with PTR and/or new wells outside of the current deal structure.
NEP needs the following to go into double digits and remain there;
- new leases
- they should pay a dividend, a stock buyback is okay for a booster but they need to do something for long term shareholders.
- better communication with their shareholders
Until they implement some of the above I think we will see volatility. I think we’ve seen the bottom when it re-opened, and it will be a slow climb back to $8.. but I won’t be excited until we see double digits, sustainable double digits.
So best wishes to all, as usual. If you see NEP in the 4’s it’s a highly probably trade to the 5’s and above!