a balanced view

OK to be clear - I am a holder and am bullish about GDN.

I am also someone who got burnt on GDN before and am cautious this time around. I am also freeriding GDN atm. Banking a fair profit thus far.

So where are we at.

Personally I expected the lower Barker to be tested late last week. Fair enough there have been a few bit changes which have delayed the inevitable.. and has driving the SP down 15%. Over-reaction? Who knows.

There are a few views on GDN atm.. my thoughts that they are:

1) One may feel that things are beginning to fall apart. GDN have always reported that they have been ahead of schedule. Everything has gone to plan. And out of the Blue... we start to have some delays. Not major (that we know of), but delays nonetheless.

Things to ask yourself. Are they concealing anything? Are these 'bit changes' a mask for something more substantially wrong with the well? But ofcourse keeping in mind that they are 4kms down and 'small issues' take some time to resolve.

A good point was made the other day about the -ve's attributed to daily updates. When an update is not given, we assume something is wrong. Or they have not found any gas. We get into the mentality that GDN must find something every day to maintain the SP.

So how does this translate on the market:
What we are seeing is a little sense-check by the market. People taking profits. Traders getting burnt and selling at losses (notice volume has decreased dramatically today). All in all.. this is a good stable period where traders realise that the 'quick buck' is not so 'quick' as it has been in the past few months with GDN. This can only help GDN maintain a healthy SP before she hits the lower barker or alkali gulch.

2) The other view is that they are being much more transparent this time around. Offering detailed and 'no BS' straight to the point updates as information comes to light. Long have gone the days where we were left hanging weeks on end with no updates as they try and free the drill string from the casing !!

Progress has been supurb up to date, with understandable delays as they are now down 4km and CANNOT afford to set a foot wrong. And they have not (according to ann). All delays to date have been minor, and are part of the drilling process. No STUFF UPS have actually occured yet. No lost drill bits or strings.. no damaged casing and the well is functioning great. Patience is the view.. but painful as the SP falls in the ST. However as quickly as it falls, we know that when positive news is out.. all those who dumped will have to get in at a higher price. And there will be many.

3) The final and although remote.. could very possibly be true (although I doubt it). Is that they are creeps that are hiding the fact that they have stuffed up big time and blaming the delays on drill bit changes.. whereas they have actually significantly impaired their drilling efforts. I say this is unlikely because the company does not make the drilling decisions.. they can merely report what they are told.. and I do not believe they are foolish enough to blatantly lie as the workers on site and contractors would not turn a blind eye. Also the SP will probably be at 15c if this was the case.


Do share your thoughts.. but just going through what most people are probably thinking.

Personally I think they are doing great. I believe we are suffering from being fed daily information in the past.. and expect GDN to find gas every single day !

24 hour trips to change a bit is annoying, but in the grand scheme of things.. insignificant. If the gas is down there.. they will find it. The team so far have not dissapointed, and these past few days to be honest are understandable. I commend them for having the guts to be honest and updating us as regularly as they have with news of these minor delays. They cannot offer any more other than these updates.

However I do understand the concern over the fact that there has not been an announcement yet today. If they had entered the lower barker (they really should have by now), and discovered some gas zones.. one would expect that they would announce something today.

This leads to a couple of possibilities:

1) They have found nothing yet in the lower barker. And thus cannot report anything to us. However still drilling and will hit the alkali gulch soon, and will report once they do.

2) They had to replace the drill bit again because the button bit did not perform as expected. Or drill rates are very slow.

Either way I'd expect an announcement tomorrow or later today. And eventually.. they WILL HIT THE ALKALI !!