Guys. Yesterday's announcement was simply about managing expectations. The drill is roughly on time (albeit probably 10 percent slower than best case) and there are no known (or disclosed) problems. History (A1) shows us that caution is warranted. I would much rather this approach with A3, than a cowboy approach that restricted or ruined the chances for testing to be conducted properly and fully.
There are three events on the near horizon for us (news items that may impact the share price):
(1) resource upgrades from McDaniels. The company has already flagged "upgrades", so this is a scale issue only. Pay zones were identified to be around 6 times the original estimate, so the McDaniels uplift will be between 1 and 6. EvoCap previously valued "1" to result in a Block 9 value of around 19 cents, so you can do the maths from there. Assuming that the multiple is 2 or higher, we will see some sort of SP re-rate, particularly once the company re-affirms its multi-pad U1B plans (the problem there being is that they will want to know what Marti holds first, so they may use cautious language when taking about 1B as Marti may outpace the upper sheets). A good problem to have. The EvoCap valuation will take about 2 months at a guess (not that it actually takes 2 months, it's just that they seem to have a lag in reporting).
(2) Recommencement of A2 production. This appears to have been suspended although there is no external / formal announcement. Maybe a cautious move (perhaps the admission that the U3 faulting is not in line with expectations made them more concerned about possible impacts on U1B until the case much lower? - just a guess). Alternatively, the lack of storage or contract has restricted storage capacity (a theory that I think is more likely: why pump stuff out if it just sits there: just leave it in place for the time being and save on costs). Sounds reasonable. But an update from AP would be nice.
(3) A3 results. These aren't just at final TD. Sone initial results out of Alameda core testing will come in the coming weeks, and although these are not DST they will certainly start to warm up the market (the "pre-show entertainment", if you will). The first DST is in Marti (and then progressing back into Alameda) so we will know soon enough what Marti holds. History - and that's all we have to go on - has Marti to be a higher pressure zone with higher API (there is stacks of research out there on this so it is not a point for sensible argument). The higher BOP used in A3 confirms the company's thinking on this, and they acknowledge that A3 caution must be far greater than what was used in A1. Don't repeat the previous mistakes: simple as that.
These "events" will start soon. February (maybe) for McDaniels (March at latest), March for Alameda core samples, April maybe for something from EvoCap, and April maybe for DST news from Marti. And ongoing after that. Whether or not we argue and bitch and complain about 3 or 4 days makes no difference: we are entering a "heavy and important" news period for MAY.
For the immediate share price: we seek to have built a base around 5.8/6.0. This area is a precious base level and with no dilution seems to be a sensible launch pad. When and how it moves next, we don't know. But as anticipation grows, so too will interest, volume and price. Already we are seeing a weakening offer side and low ticking by those trying to rebuild longer term positions: all positive signs. My personal view is that it looks "right" to start creeping higher right about now (just instinct, nothing else).
So, for my money: settle in and enjoy the ride. The next few months will be interesting - and, if my predictions are right - very rewarding.
All we actually need is patience. The rest will happen when it does.
Enjoy the ride.
Regards
Kit
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