New Position: Lottery Ticket With 12x Upside Potential

1 day until the catalyst. A 1% portfolio position with asymmetric upside and a single binary event tomorrow.

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This is a little different from what we usually cover.

I came across a special situation that I think is worth flagging - not as a core position, but as a small, asymmetric lottery ticket. I’m sizing it at roughly 1% of the portfolio. If it works, great. If it doesn’t, the damage is negligible.

Here’s the quick version.

There’s an oil and gas producer trading at an $85 million market cap that generates roughly $250 million a year in EBITDA and sits on over $1 billion in proved reserves.

The stock has lost 85% of its value - not because the wells stopped producing, but because the previous management team structured a financing deal so badly that it’s on the verge of triggering massive dilution.

Those executives are now gone. A new CEO with a serious track record has stepped in. And there’s a single deadline - tomorrow, March 26 - that determines whether the toxic overhang gets resolved or the dilution gets worse.

If the refinancing works, the stock could re-rate 7x to 12x from current levels based on what the company actually earns and owns. If it doesn’t, the downside is real - but even under full dilution, the per-share asset value still appears to sit above where the stock trades today.

That’s the asymmetry. A 1% position where the downside is capped and the upside, if things break right, is multiples of the current price.