Once again good post. I agree share price drop was fully warranted. Given a market cap of roughly 40mil before the announcement, I would have expected a 10 percent drop at least given the 4.5mil equates to that.
I agree too that any cost over run dents the amount of the 60mil grant going to petratherm. And yes at this pace of underestimating costs they will probably blow the grant on over costs.
However at present this does not effect the other JV partners at all. Their costs are fixed. TRU will still need only 75mil with the grant no matter how expensive this well becomes. The grant is only applied to the demo plants post HEWI, thus this well will only change the economics for petratherm and not the JV partners. So it will not reduce TRU and BPT expenditures thus not making their decision any different if key economic assumptions are met.
So I believe this is a big blow to petratherms balance sheet and but it will not effect whether or not the JVs decide to proceed and thus the demo plant.
PTR Price at posting:
36.2¢ Sentiment: None Disclosure: Not Held
