Yes momaka...the prognosis is positive indeed. But I fear that there are too many 'investors' in this stock who are actually FIFO gamblers who don't really know what they are buying and how to interpret the news. As such they are ripe for the manipulation you refer to.
The announcement of today and the forthcoming IRR are case in point. Yes we had a very positive announcement today with good implications for potential flow rates and decline rates. And the IRR will combine all the data from ICE#1 with available data from previous wells and studies and make assumptions about the applicability across the broader acreage. It is unlikely that they won't come up with a very impressive number....which IMO is anything above 1 billion barrels recoverable. Nothing to be gained by expecting a bigger number at this stage. If it is then so much the better, but if not it is still excellent news. I hope that enough people 'holding' realise this, but I fear not.
However, whatever number they come up with it is just a number for 'Prospective Resources'. Prospective resources have a nominal value per bbl applied to them, but that nominal value is not the end game for this company so it should matter very little. Again, I bet most FIFO gamblers don't get this.
What does matter is the conversion of that 'Prospective Resource' to 'Contingent Resource' by 88e and most likely some partner/s through ongoing appraisal work - ICE#2H and at least a further 4 wells. Then we will know whether what appears to be an almost certain success in geological terms will also likely be be a commercial success. If still positive at that stage, then our resource position will get a genuine and positive re-rating in terms of value. But that means being patient for another 12-15 months minimum before ICE#2H results start 'talking'. We know the FIFO gamblers won't be up for that unless there are other announcement flows to be speculated on. Will there be enough other news flow to keep enough volatility for the day traders to exploit?
How far the company takes it down the appraisal road before T/O, or whether they go beyond (again with partners) into production and the further massive re-rating of resources into 'Proven Reserves" with P10, P50 and P90 ratings is a discussion for a later time. A much, much later time.
However, it seems that every announcement is being anticipated and then assessed in terms of Proven Resources.
Oh well.
88E Price at posting:
6.9¢ Sentiment: Buy Disclosure: Held
(20min delay)