I have been wondering what will happen if this RNS was to state that let's say they have got 200m of net pay and it is gushing. First thing that was coming to mind was the fact that security threat would increase both at this sight and the next, the transportation of the rig to the second sight would possibly need much more security possibly become a nightmare. Secondly if the intention is to sell HRN to the best bidder after the second drill what advantages will HRN benefit from regarding their SP if they announced a gusher. Their SP was $1.60 the night before the RNS and the warrants would become exercisable if the SP stays above $2.00 for 30 days. These warrants would cost $1.50 and there are approx 50m of these. Bearing this in mind how far would the SP of HRN go above $2.00 knowing so many warrants of $1.50 will be hitting the market. I don't think many people would have been buying HRN at much above $2.00. HRN are in charge and a gusher announcement would have more or less been wasted. Everybody would have been looking at the SP of HRN being more or less stagnant at just over $2.00 and this would have had an effect on the SP of RRS and RMP. Now I'm not saying that this is a gusher or a duster but it makes sense to announce the final results of both wells together regarding exact net pay and flow rates etc. etc. together after the second well has reached TD and if their intention is to sell HRN after the two drills are complete and the area is proven then they definitely don't want to encourage security issues by announcing a gusher now. Therefore I never expected an update stating we have millions of barrels of oil not now anyway. One more thing that is bugging me at the moment is the fact that RMP have suggested that they will participate in the second drill. Why would they do that if this was a total duster.
RRS Price at posting:
10.5¢ Sentiment: Hold Disclosure: Held
