Storm, whether you should buy depends upon the proportion of your available funds you plan to invest and your trading style (e.g., risk tolerance).
This is my personal view as posted on the "unbelievable" thread:
New Trader, for me the salient point is that GDN are parting with their U assets.
Much has been made about the value of the U float. One thing that annoys me about much of the discussion is how posters are hung up on $2.65 per share. Surely any novice knows that valuation should refer to market cap. The sp is merely a function of cap and shares on issue.
Anyone already invested or considering same should have read GDN's drilling updates. Whether you conclude it is a buy or sell depends whether you see the glass half full or half empty.
Imo those with a low risk tolerance will sell despite the increasing reward from the lower sp. They only want sure things and now realise that GDN aint that, and never was.
Others are willing to accept the risk associated with a speccy such as this and see the current sp as an opportunity.
To go back to my opening line, what I like about this U development is the fact that GDN are divesting their whole interest.
If management were going to use U to offset a poor gas result I would expect them to retain these assets. Then, when they have to announce that the well is a duster they could make a presentation showcasing all these other valuable assets, pointing out that life goes on for GDN without gas.
No, they are largely burning their bridges by making GDN more reliant on the gas result. They are turning the company into a gas play instead of a diversified explorer.
For me this exudes confidence on the part of management. They are not even retaining an interest in the U company post float. Even T4P (who could not be confused with a downramper) thought they would do this to perhaps string along some for an "in specie" down the track.
No, gas is it, and has been for some time.
Contrary to what some doubters might think, imo this jv could not have been hatched in the last couple of weeks. For me, management decided some time ago that they have a live gas producer on their hands and don't need a U prop.
I have come to the conclusion that GDN have a commercial find further up the well and Leadville will or will not improve the economics. What no-one yet knows is how commercial this well will be.
On this basis I topped up my GDNO today.
cosmos
GDN Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
