I think on days like today, it is important to seperate the facts from the noise. Whilst we would love to see a FP gusher, today's annoucement is not diabolical. As it clearly states "There is a clear unquestionable presence of hydrocarbons in the Fausse Point property as evidenced by the"numerous influxes of hydrocarbons whilst drilling the T.G.R. #1 well and the production test particularly in the deeper zone. There is also evidence to suggest that these hydrocarbons may be connected to larger hydrocarbon accumulations with the potential for a significant financial outcome."
My interpretation of this, is that FP1 was drilled to close to the salt dome, leading to the non-commercial find. Further efforts in the close proximity to this will hopefully lead to commercial results, bringing the existing production infrastructure into play. Given the track record of GGP management, I'm prepared to accept that the installed infrastructure is there for a reason.
Whilst communications haven't been top-shelf, the GGP management has runs on the board, a portfolio of high-potential projects and cash in the bank to take advantage of further opportunities.
My grandfather taught me many years ago the benefit of having the courage of your convictions and the outsize rewards that come from holding your nerve when others lose their's.
Fundamentally, the reasons for buying into GGP haven't changed and the global economic recovery will place upwards pressure on oil and gas commodity prices. I remain convinced that in 12 months time this will be the low-water market for the company.
GGP Price at posting:
1.9¢ Sentiment: LT Buy Disclosure: Held
