Very true, although I see some of the usual pumpers are actively pumping it already. Holders should not read too much into this announcement. It in no way suggests Venus has economic reserves, and this is why PH2 were careful with the wording:
A successful flow test at the Venus Pilot could result in conversion of a material portion of the above contingent resources to saleable gas reserves.Weasel-word qualifiers like "could" are the most important words that shareholders need to focus on when reading statements like this, and as Andy Bee knows, we've seen this many times before. Another deja vu moment. Take a look at the following 2019 spin announcement regarding Windorah, which typifies the techniques used by RLE to continually milk shareholders via multiple cap-raises. Release only positive news. At every chance, talk up the
possibilityof success, while not mentioning the (very low)
probabilityof success:
https://*********.com.au/maiden-reserves-horizon-real-energy-gas-sales-interest/- Real Energy (ASX: RLE) edges closer to booking maiden reserves
- successful flow testing
- continuing to gather data and other reservoir parameter
- wells appeared to be performing well
- has received strong interest from several commercial buyers regarding the potential sale of Windorah gas
- has now called for formal expressions of interest to sell up to 5 petajoules of gas
- Our Windorah gas project is very much on track with a number of commercial developments progressing concurrently
- The company already has a memorandum of understanding with Weston Energy to supply about 3PJ of gas per annum over a five-year period
- Real Energy inked binding deals with Santos (ASX: STO) and Beach Energy (ASX: BPT) to link Windorah with the gas majors’ gas gathering network in the Cooper Basin
- lodged an application for a pipeline licence
- the company is also seeing “significant interest” from a number of groups to provide funding to build the pipeline.
- Real Energy is in discussions with groups interested in providing debt finance in respect to some or all of the expenditure required for the pipeline and associated infrastructure
After reading multiple "spin" announcements like the above over several years you would think that you were onto a winner. Unfortunately, (and if you've done your due diligence you should already know), Windorah was (is) a dud that resulted in huge losses for shareholders. The wells did not flow freely enough to make the resource economic.
Venus may go the same way, so don't count your chickens before they hatch. Ignore all the hydrogen MOUs and joint venture spin for the moment; they are almost meaningless without certified reserves. Consider what will happen to the share price if Venus's resources cannot be converted to reserves. That is the gamble you are taking here. If you've done your DD and you're happy to take that gamble, power to you. If I was investing I would allocate funds based on
probability of success, not just potential success.
So that's my "de-spinning" of this announcement. I don't really see anything new here (dewatering of the well is "as expected" for the coal seams in this area), on the other hand, there is nothing negative mentioned either, so that is a positive in itself. I still consider the price to be expensive
given the risks, so my sentiment remains a sell, and I'll reconsider sentiment if-and-when PH2 report stable gas flows from the well.
(20min delay)