Nothing gets the market more excited than pictures of flaring when flow testing.
There is a lot of unknown's with MK2 as in its not being drilled for geo information, its being drilled as an appraisal well and therefore one imagines it is being drilled where they believe the thicker sands are. Up dip from Mk1 and straight.
Volumes, pressures, types are all important but the sample to surface will shift the sp no doubt. Good flow rates will drive it to another level IMO. Sample to surface is most important but long term its about volumes and flow rates but that won't be squared away properly until multiple wells are drilled, having said that a great flow rate from this test will get the attention of the big boys I have zero doubt.
There is a motza to be made with power generation on its own completely moated from world spot prices for gas with a land based market on the doorstep.
As for how many to offload, I won't buy in to that, but for me personally I will look at how many wells are planned, I posted my thoughts on this a few days ago so a lot depends on what the plan is. If they announce MK2 + out East or shelf edge or both the market expectation will be, and SM has stated once these basins are uncovered COS rises to ~ 80%, that a discovery will be booked out there which will dictate my plan to some extent.
IF its only MK2 there will probably be an opportunity to trade a few as the inevitable drop back always happen after the good news but as I posted above if they are moving off straight into another drill this will be lessened to some extent IMO. So in short once I know the plan I will make plans for pre drill based on that.
There is so much to look forward to its hard for me to see a scenario that we won't be at much nearer a $1 than 12c in the next few months though unless something goes horribly wrong.
1. MK2 and formal discovery announced.
2. Possible/probable well outside of SG4571, which has to happen before June 2024 and no better time than straight after a discovery/flow test announcement IMO.
3. Extended lease discovery?? With luck, but I'll take 80% COS every day as a bet.
4. Massively overlooked IMO, is the carbon project, which only adds to any discovery and SM has hinted at a large expansion of this project and a spinning off of this business which makes my mind race tbh. There is massive potential here as we hurtle towards net zero. There will be companies lining up to get carbon credits.
I think IVZ is the biggest no brainer on the asx atm. We basically have the discovery with a sp of a wildcat drill........which is being called an appraisal well! I doubt that has ever happened in the history of O&G drilling.
IVZ Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
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