my reply to bello

haven't posted here for ages but made this post on SS which bello challenged me on

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"Sold the lot over the course of today and yesterday - I am a hopeless seller and averaged less than I should've but happy nevertheless

One point about the whole saga I would make is the shameless ramping on that other site hc - I pity the poor newbies who took it all in - hopefully lessons will be learnt albeit the hard way
there were posts that had it all - valuations based on the 120mm figure instead of the 15 - 20% recoverable, some that didn't even account for the fact that INP only has 75%, some putting $30+/bl on it, coming out with SP estimates of $5 or more - and lapped up by the unaware who put quick greed in front of working out facts for themselves"


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This is my reply to her challenge which I post so that more facts are known. Please don't take my advice blindly either - if Juniper does perform well over the next few years, then I was wrong and I sold too early
- do your own research and make your own decisions



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"Bello,

Have followed INP since 2004 and saw you on hc flying the INP flag

(by the way you say I'm downramping - I thought they were great buying when they were 20-45c as per the last few weeks, but is a sell at anything like these levels now)
- I've never ramped either way on these forums as those who know me on other boards would attest - the market is a weighing machine over the long run, so what I or any forumite says has no say in the long run share price - what got me on the subject of ramping, was some of the silly statements all last night which judging by the early morning spike today had sucked in a lot of the greedy/unwary/newbie types and they are now holding shares originally for a trade which will have to be classed as err.. 'investments' for the future.

Why I sold out

- they have never flow tested Juniper (which in itself is a worry/uncertainty etc, but the fact they decided to develop Flax 1st when Juniper has clearly a greater OIP suggests they have little confidence in the tight reservoir)
- why did an outfit that knows what they're doing like Vernon Falconer decide they didn't want any part of PEL103 anymore, selling their 65% stake for a lousy $8mil? (this is before the latest Flax drilling but after the huge columns in Juniper were logged) - the whole PEL103 thing came to a standstill because VF didn't think spending anymore was worthwhile
- don't lose sight of the fact that the 120mm barrel figure is mostly Juniper - if it doesn't flow then what?
- an area of 120 sq km in a tight reservoir requiring fraccing means lots of wells and lots of $
- after all the you beaut reservoir they've hit, they are still only saying middle of next year for 1000bopd (and they have never done things on time)
- if they hadn't thrown in the biggest onshore Aust field comment, the price would not have reached almost $2 (and then with a comment about all the bankers keeping his phone running hot wanting to finance the needed capital, I begin to wonder why Ross Wecker needs to say these things)
- cap raisings and the threat of them rarely give any upside to a share price

A couple of your specific quotes


QUOTE
I would call the 15% recovery rates as out of date downramps



I said 15-20% and not a downramp just fact - go back and read about Flax/Juniper - given they have better reservoir than when those figures were given but as I said it doesn't seem to have increased expected flow rates


QUOTE
they referred me to Tirrawarra field run by Santos



on the same theme really and ahh yes they've been using this line in their presos going back years - hasn't helped their flow rates in comparison and if they ever did pull out 30% it will be by 2030+ (discounting cash flows after 2015 = zero)


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assuming one of the largest oil fields in Australia can produce a minimum 4000-5000 bopd sometime




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I honestly don't think the $4-$5 price tags are ramps



well, I'll just say best of luck

I honestly hope INP goes well for you and will keep an eye on it myself but gut feel tells me to take the $ now (and isn't it great that we have a thing called a market, to accommodate people with opposite views) - may well be the biggest oz oilfield but it's going take years to get it out and a lot of $ to do it - doing my dodgy back of envelope stuff, I'd say we're about where we should be now but wont be surprised at any upside or downside things to come"