Major re-rating underway, thanks to the somewhat more up-beat commentary from the Company in the last announcement.
As always however, many of the retailers tend over-trade such opportunities, only to end up making much less than if they had simply adopted a more distant, sit and hold view...and by this I mean beyond 10 minutes...lol
Of course a trade is a trade, but we also need to recognise the odd stocks which offer much more, such as CEL.
I shake my head when I see people buy such a stock, then instantly think of selling out...unaware of what they are sitting on. This approach will prevent them ever enjoying the runs we see in stocks like SFR, FMG, PDN...or dare I say CEL?
There is risk here of course, there always is, but this well has already upgraded their entire Texas ground position, particularly the results of historic drilling, many of which hit hydrocarbons but were deemed "non-economic"...formation damage?
The current drill suggests this may well be the case...if so, then there is no telling what CEL maight be sitting on here, especially the Conyon Sands which are prolific producers but generally less economic per well than the deeper target formations in the area, which are also being targeted in this well.
Perhaps the reason the Canyon Sands have previously been considered of lower economic attraction is the restricted production due to formation damage on previous wells?
Wireline logs will give us all a clue shortly.
Meanwhile...the market is having a play with this, or should I say, the market is having a play with the retailers.
This will pass.
Significant value here...still...in my view.
They should be through the sealing shales now, and about to pull out and run wireline logs before running casing...we may well know by Monday next week what we have in the upper zones!
Of course, we still have the primary target to hit!
Cheers!
CEL Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
