Some good news for NWE as late. If you are buying for the first time, this is not about the short term prospect, rather, consider what it means for the longer term.
A basin full of gas next to a high priced market and infrastructure is a very exciting prospect. Very very exciting in fact, and much of the euphoria on here is very justified.
There are lots of downsides that people should also be considering in the short term to try and protect themselves and their monies. NWEs prospects are going to require capital and they are pretty light on in that dept. The drilling they are undertaking is a risky operation - equipment failures or procedural mistakes can be costly and a lot of capital can be pissed up the wall in a flash with no real result. You can have a look at OEX and SSN for two great examples on the ASX that have recently been eaten by some bad wells. Importantly though, it may not change the prospects of the basin (could actually improve them) but it might provide a substantial opportunity to jump in more when they raise cash or the price tanks because people are bored waiting for phase 2 of the result.
For those of you that wish to jump on me for saying "whoa, take it easy", I guess I would say I have been disappointed and excited many times before, but its the endurance and calm approach that has always got me over the line - not the race to the queue.
The traders are all over this one at present, but will be gone soone enough. Watch tomorrow for some people packing up shop.
Look at things right this second in Europe - sentiment can spin on a dime. Draghi 'disapoints'. He hardly disappointed at all, he never had any tricks up his sleeve, he just thought it would be cool to say something confident and the market took it and ran with it.
Softly softly approach will win the day imho.
SF
(pottermore, I thought the recent crash in gas price was on the back of a warmer than normal northern winter which was not able to absorb supply)
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