People seem to think para #1 and #2 were a failure? But does 9BCF of discovered reserve sound like a failure to you (refer to 1 Feb2010 GDN announcement)?
SSN spudded Ripsaw #1 last week, with a POTENTIAL reserve of 1BCF. And GDN already have 9BCF in the kitty... thats not including para #3.
6 gas shows in para #3 and at these levels ... with casing fit-for-purpose.. it looks like GDN may have found the way forward and a successful one at that. It may have taken GDN 3 wells.. but if they get there with para #3... there is nothing stopping them from drilling another 20-40 wells and producing 5+mcfpd ... thats economies of scale for you. The beauty of huge acerage and proven gas in the Ismay is that you just have to find the best way to extract the gas that is already proven to be down there.
Para #3 is extremely promising in that it has these significant gas shows which para #1 and #2 did not experience. It shows that the 3mcfpd achieved from
I think Social Investments (debt funder) is breathing a sigh of relief. Remember they are the ones who provided the $5m debt facility (2.5m upfront and 2.5m drawdown upon agreement) to fund para #3. GDN were able to sell the golden eagle prospoec to Social Investments for $5m.. in such a credit tight environment.. you'd think they would have put up a strong case for these funds. More importantly they didnt dilute GDN any further by securing this debt. Two positives coming out of this.. and a sign of where GDN is heading with a succesful para #3 well.
Para #3 was almost GDN's last shot before it capitulated... going down to 4c.. the market knew this. But it seems they may have pulled it off.. and investor confidence is only going to grow once para #3 is sured up and cash flow starts flowing in. Might take some time for the market to realise just how important the success of para #3 is to GDN.. but it really is a turning point... as the heading suggests.. a new era for GDN.
GDN Price at posting:
6.6¢ Sentiment: LT Buy Disclosure: Held
