Hi Stoss,The China drilling knocked Petsec around and then the...

Hi Stoss,

The China drilling knocked Petsec around and then the profit warning in the quarterly didn't help. The company does need a better investor relations policy, no doubt about that.

But funny thing is when you ring them up they are quite happy to answer questions. Ross Keogh in the US has been particularly helpful to my understanding of what the company is up to.

Fact is there is no market interest in Petsec you only need to look at the last couple of week's trades. Bulk of the shares are tightly held which leaves a small band of traders who move the stock up and down.

PSA's US presentation tomorrow morning our time and news that G1 well is producing might spike some interest but fact is that what PSA does is the GOM is not that well understood in our market.

It suffers from operating overseas, not having any broker sponsorship (probably a few out there still licking their wounds from the past) and doing little to promote itself locally eg. why present in Good Oil Conference in Denver and not in Perth at the end of the month.

Other thing is that nat gas prices could be a bit weaker going into the shoulder months unless there is some really hot summer weather in August.

Lastly the fabulous result PSA had in the first half last year was due to two things unexpectedly good production from the first West Cameron wells completed which came on stream just as nat gas prices were going thru the roof.

Petsec should have a great second half this year and with reserves and revenue increasing per share story is still a very strong one. Even the first half wasn't too bad with daily production averaging some 12 mmcf a day and that is with wells down for recompletions or repairs and no Ship Shoal.

But it would be helpful if they could be a bit more forthcoming with news. For example why didn't they tell us which wells at West Cameron were down for extended periods in first half; why did we have to wait to the quarterly to learn that Ship Shoal was not producing; why not tell us the drilling program has been put back a couple of months unless they can find a rig to replace the one they originally contracted.

And why not explain to the market what the dd@a provisions mean, as I understand it all the West Cameron costs will be brought to account by the end of this year and so all next year's production will be money for jam. But then how many sands do we have left to produce at West Cameron?

Its a pity the Conference in Denver doesn't have a phone in facility so we could ask some of these questions. I can understand people's frustration with the stock particularly as it is so far off its year highs but all I can say is hang in there, it will rebound, the fundamentals are too strong for it to do otherwise.