AKK believe the result of Pathfinder proves the field to be economic and will bring the well to commercial production. At a rate of 350–400 BOEPD the market will want further evidence of the 30-60-90 flow rates and to see what decline curve the well will produce at. The Niobrara and Bakken wells in the shale plays have significant declines from their IP rates but it will be the EUR which will ultimately determine the value of the project.
You would expect they have learnt a lot from the first well and use the technology into the second to enhance the performance and flow rates. The market would also need to see other producing wells within the 11,500 acre project and if successful would re-rate AKK.
There’s a lot to be excited if you are a long term investor but it may take further time for the company to de-risk the entire project. If they were to do a JV as RC has alluded to could add substantial value, free up cash and increase the pace of the project.
Cheers Matsim
AKK Price at posting:
2.5¢ Sentiment: None Disclosure: Not Held
