Change of Discussion

I haven't much( or new) to say, but sick of the tit for tat.

There has been some suggestions on here of late that K2 is somehow not up to scratch.

Both KAR and PRE have clearly stated that this is a commercial find. There is also more oil than originally forecast, albeit in a more complex reservoir. Updates to follow after further data analysed. Obviously the more oil the better and Kar need another find to put the icing on the cake and go to production. Possible Joint production with nearby fields should open up further possibilities for commerciality at lower POO and provide field longevity.

" Macquarie's view is KW's bad drilling result isn't the end of the world for Karoon Gas, the analyst shaved its price target by 7% but nevertheless keeps the stock at outperform. Karoon's highly-anticipated Kangaroo West well in water off Brazil's coastline didn't find anything, meaning the company will have to consider drilling more wells to firm up the commercial viability of the earlier Kangaroo discovery nearby. "With cash backing now at A$2.64/share, the share price is now entirely discounting Kangaroo as a commercial discovery. "

" UBS slashes its price target on Karoon Gas to A$3.00/share from A$4.25 after its Kangaroo West well offshore Brazil disappoints, however, keeps its buy recommendation ahead of the next well in the campaign, Echidna. That well has a 43% chance of success, and, while not targeting as big a resource as Kangaroo West, could help firm up the commercial viability of the earlier Kangaroo discovery. UBS has valued Echidna at A$0.53/share. "Results in Kangaroo to date indicate the field contains more oil than expected, but reservoir complexity means that more appraisal will be needed before the commerciality box can be ticked."

Echidna is next roll of the dice, as the cash , helped enormously by a weak Aussie dollar, slowly diminishes. Karoon is in serious need of some further drilling success.

Levitt-1 unlikely to be at a stage for an announcement in the second quarter, so if Echidna dry, then no possible sp stimulus till June qtr. Pressure must be mounting at Mt Martha.

Have to say after the Erwin Furburger and Kiki shenanigans, I thought about his statements of investing in other assets ( they would be worth half by now) and decided that the Santos drilling campaign was worth the risk. Someone ask me that question again if Echidna comes up dry. I will be voting for a bargain asset purchase from now.

Given KW duster, I can see no likelihood of a takeover now. Levitt-1 gusher could be a possible catalyst, but unlikely in my view. Cash still attractive though( but no assets) and don't forget there is still up to US$200 mill outstanding from Origin, although that won't be anytime soon.