doh

Missed the chance to grab some in the teens. Unbelievable buying opportunity. XJO appears to have support at 4540. Will be interesting to see if we bounce off from there (if we get there).

Looking at the reports yesterday, let's put this performance in perspective. July to Sept was probably the worst of the natural gas price cycle with spot hitting a rock bottom of around 1.50 in August, but has since bounced back sharply to be around 4.40. So in a quarter where the price of their main asset was hammered, and they can still produce positive cashflow of over 1.3mn on margins of 66% (78% if including the state tax exemption), this is one very profitable asset they are sitting on at Rayburn! And this is something that I have repeatedly emphasised in the past about the wonderful attributes of Rayburn - high flow rate + low maintenance (opex) cost = high margins even when spot price is depressed. Imagine what their margin is now that spot has rebounded over 150%.

Other key points:

* 4 well drilling programme onshore gulf coast to commence Dec 09 (targeting 220BCF net to STX)

* 3 well CSG programme in PEL96 to commence in Jan 10. Drill rig contract being finalised now, site clearance and approval being carried out now

* Close to potentially acquire some asset in the US, to be announced possibly within 4 weeks

Gotta love this market some time - full of crazy irrational people. And it is often from those that we make the bulk of our money from (especially those who parted with STX shares at 9-11c).

618