i think people here are quick to forget the POO was at this...

i think people here are quick to forget the POO was at this level less than 3 weeks ago. Personally i cannot see the KSA wanting a lower POO with the upcoming listing of aramco but we shall see still plenty of reasons to assume supply will remain tight due to geopolitics . All in all i think we must not forget the breakeven level for SM#71 at ~US$20 a barrel so its very high margin oil we are producing. That being said we do need a clear plan from the company what they are going to do with the oil revenue, clearly it makes sense to repay the convertible note (not incur 14% interest) and if the SP remains above 5.5c so as not to incur dilution. Another few drills around SM71 cannot do any harm strike while the iron is hot if they have good seismic to target a field extension and better define the B65 oil trap which has caused the grief of late.

Based on my calculations on present oil production and prices we can afford to drill various prospects on SM71 now if they have the targets (to keep the rig at maximum capacity) and also to assist with the upcoming reserve report. The company needs to get some additional runs on the board, lets just hope they are lining up to immediately drill a target in VR232 (i presume BYE are all over the seismic this being located adjacent to SM71 - and they have substantially upped the JV offer for the block) assuming this is awarded in the next 3 weeks (noting the BOEM have maximum 90 days to make a call from the late march date) would be good to see a number of additional well options granted so they can drill other prospects in VR232 or SM71. How good would it be to find substantive oil warranting another production platform in the near term.