Ann: Borba and Production Update, page-53

Very disappointing announcement today based on the positivity in the previous announcements and the GJ podcasts.  The selloff was severe but was an over reaction imo when the following catalysts are considered;

WELL TESTING

The well is not a duster (yet), testing is to commence on the Kione shortly where there is 92 feet of log pay, with potential upside to 137 feet of pay.  Initial indicator are that there is good permeability and a gas pipeline is nearby for early production.

“The likely test zone in the Kione has porosity up to 23% and exhibited filter-cake buildup on caliper logs, an indicator of permeability for the flow of natural gas.  Based on the gas shows and regional production experience the Natural Gas in Borba 1-7 is expected to be mostly methane. A tie in point to a nearby gas pipeline will facilitate early production from Borba 1-7, should production testing prove to be successful.”

OIL PRODUCTION

Oil production is exceeding expectations with a rising oil price

“SGC’s share of oil production from Red Earth and Alberta Plains Assets in Canada continues to exceed expectations and is now over 420 BOEPD; first revenues to be reported shortly”

“Oil and Gas prices have increased significantly since the decision was made to acquire interests in the Canadian production assets”

OTHER OPPORTUNITIES

Currently assessing other opportunities to substantially boost production

“SGC and its partners actively assessing other complementary oil & gas producing assets in Canada and California that would substantially boost production”


Based on this it is a buy from me but completely understand if some punters cut their losses today and moved on to other opportunities.