greenearth energy

With the major pullback across the sector, it will be interesting to watch the debut of Greenearth Energy tomorrow (ASX:GER).

It is stated on their website that only $10.03M of an intended $20M IPO was raised. Will the company be able to sustain the IPO price of 30c, or will the shares be sold down to exploit the relative weakness built into the SPs of other GEO stocks?

If I were to make a guess, I'd say it will be a lacklustre day for GER, but well worth a peek if anyone is trading tomorrow. How much of the IPO support was based on the assumption that it would list into a post-HAB3 sector that was awash with speculative cash? The delays for GDY could not have created a more awkward listing environment for GER.

That said, our own position as GDY investors is no less awkward - with the knife-edge conversion decision ensuring that many options will go un-excercised. Has anyone heard news regarding how the suspension plug was dropped, and why the drop occured despite the significant care that GDY have invested in the drilling process?

Systemic or not, this plug could compromise the $9.6M sweetener that Origin have offered if the proof-of-concept phase is completed by the end of March.

Tuesday should be interesting. It would be nice to see a bit more disclosure, and a means to ensure investors that the flow test can be completed without similar issues (I'm picturing a sub-orbital plug at the end of an enormous HAB3 geysir, or, less dramatically, another dropped plug). Like the sheared drill stem, there does not seem to be any major technical challenge in retrieving the dropped plug, but we need to know where we stand.

Cheers