It is the effect of long term time scale. There are many shareholders that have held GDY for years and have kept holding through a series of major disasters, and who have kept on supporting in fundraising. How long do they continue to do this? The goal is very noble but realising the dream is now further away than it was 1 year ago, 2 years ago, and even 3 years ago. Yet they held on. The immediate specific goals are no longer identifiable. At this instant there are only some generalised goals of the same kind that GDY had 5 years ago. I suspect that many of these shareholders are saying, "I still believe, but I will put my money elsewhere until GDY actually gets it runs on the board." [N.B. I am not at all speaking for myself here.]
New shareholders come and pick up the GDY dream as if the (clean energy) world has only just started, and the sky is blue. It is not surprising that these people are puzzled. But history means something.
Old shareholders have spent vast amounts of time analysing and assessing the geological merits of the tenements, the practicalities of drilling, the vagaries of the motions of 4km long spaghetti like drill strings, the efficiencies thermodynamic cycles in power generating processes, costs of infrastructure requirements, etc. Lots of people here have contributed from their expertise. The learning has been great and most stimulating. That collected learning of shareholders could now probably run a geothermal company 'of their own' if only it could be controlled and directed! Of course our learning is 'after the fact' and we do have memory. GDY has learnt even more and consequently so has the whole geothermal sector, at our expense.
In that context it is sometimes hard to keep up enthusiasm in posting here or buying more shares when disaster after disaster seems to keep knocking the project down. I could enumerate the problems but that would be depressing old hat and my purpose is to provide a reasonable explanation as to why the SP has languished for the moment.
Is the present situation really so bad? Not at all. problems are understood and solved. The useful experience gained is immense. PTR has just completed its first deep well without incident. Thank you, GDY. Provided the appropriate alloy casing can be obtained in reasonable time (normally ~9 months lead time) there is no reason drilling cannot recommence. The geology of the four GELs seems to be fairly consistent.
The key requirement is to demonstrate that multiple fractures can be generated between a pair of wells. Since Jolokia 1 will have an inner liner they will probably want a new well to perform this experiment. Once the technique is established GDY can keeping sinking holes continuously, firstly with Rig 100 and later joined by their super duper second rig. Each rig should in principle produce about 3 wells per year.
Does GDY need the 1MW pilot plant? My view has always been, “What a waste of effort and resources, but the pollies want to see a light globe switched on.” However, now that the grant is in the pocket the need is only to keep faith with the residents of Innamincka.
To re-enthuse investors and to stimulate confidence GDY will have to be very specific in what it will do next, when it will do it, and actually achieve those intermediate goals. Shareholders have the AGM and the investor briefings next week in various states to thoroughly quiz management on such matters.
Juke
RNE Price at posting:
86.0¢ Sentiment: Buy Disclosure: Held
