this is exactly the confirmation I've been looking for. Clearly after long consideration, both partners believe the shows are encouraging enough to run production casing, which further derisks the well.
Strike is a producer already with cash and production backing the current SP unlike a lot of other wildcat operations.
At 45cents upside with minimal downside (sentiment from a P&A would cut 4-5 cents off the SP short term), you are looking at a 10:1 Risk/Reward ratio with improved probability of success on todays announcement.
Pre drilling, ''The joint venture partners have achieved a 1 in 2 success rate in exploration drilling of similar ?Wilcox Plays? in the onshore Gulf Coast.''
With a pre drilling probability of ~50%, we are now in a much better position given the confidence of the team to run production casing.
It is hard to see a better value ST play in the O&G sector right now.
STX Price at posting:
18.3¢ Sentiment: Buy Disclosure: Held
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