I think FP#1 has created something of a conundrum for VIL and GGP.
The drilling actually intersected the targets they were after, but at the bottom of the well they stumbled upon something completely unexpected. Unfortunately they only hit the edge of this zone and initial flow rates indicated are not that flash. Can these initial rates be increased? Time will tell I guess.
Now if we consider that each well has a given radius from which it will produce then if we are on the edge then perhaps the possible production will possibly be effectively halved.
If the companies can get further evidence that they have in fact intersected the edge of a large regional resource as has been hinted at in their reports the decision in my view becomes.......Do they drill FP#2 targeting this resource and if successful then plug the current zone they are testing and move further up the first well to test their original targets.
With the current downward pressure on gas prices, if there is oil on offer in their original targets I'm sure that would be enticing to them.
Remember, VIL have the major share of FP and I would be very surprised if VIL go chasing other projects at this stage given their limited resources on the ground in the States.
I think we are only in Chapter one of the FP story and it is still unfolding.
If you think I'm wrong please feel free to shoot me down.
DISC: I hold GGP
VIL Price at posting:
3.7¢ Sentiment: None Disclosure: Not Held
