You have to remember, these brokers seem to have the game plan of being in it for the short term. They want to push the story down people's throats and get the SP up pre spud, then sell off into the hype, whilst maybe holding a decent position for the luck roll. With the T/O scenario, they lose half their immediate upside and have to live with the fact the odds are better for the longer term side of things. But this wouldn't fit in with their high risk high reward part of their portfolio. Like we have discussed before, this clearly changes things for a JKA holder as it introduces more risk, which means they might want to lessen their exposure.. Well these brokers would see this as derisking and lowering the payout of their position, which does not fit their criteria for their investment choice.
PVD aren't just a one shot hit, but a two shot hit.. They have 2 fully funded wells which should cost around $60 - 75m each, if I remember correctly. They'll have a share of about 350mmbls NET to them on a success case. The main factor here though is the play they're going for has not been proven and its very risky due to this. Mind you, the company is valued at around $85 - 90m so this is incredibly cheap considering they have other backup projects. It certainly is worth the risk just like TPT. What it comes down to is how much you value a proven hydrocarbon system. The siesmic looks absolutely brilliant, but we don't know if its just water down there in that reservoir.
JKA Price at posting:
8.3¢ Sentiment: LT Buy Disclosure: Not Held
