Yes, I agree you would be crazy Trouser. This is just my...

Yes, I agree you would be crazy Trouser.

This is just my thoughts and not to be construed as advice.

From reading the forum it would appear that most:

·are assuming the 16% chance is not accurate or simply not been updated with the latest info

·more will be found than stated

·investors are prepared to pay a premium now for what will be discovered in the future


Can’t say much about the first 2 points as who knows. It’s possible for more or less as this is the mid range expected estimate. Being a Wild Cat there is more chance that they may not have interpreted the seismic correctly e.g. FAR initially got their interpretation of Seismics wrong and the field spread further than expected. They recalibrated after a few drills and managed to get 11 out of 11 successful drills.


The last point depends on the sentiment for a sector and any hype that may have been created by the CVN drill. Management have been busy spruiking the potential for Namibia for a few reasons:

·To support the SP. They need to ensure the price stays high to ensure that any success translates to a higher CR price after a successful drill. Evaluating a field is expensive and you will need to raise to stay in the game. Do not assume your JV partners will be doing you any favours, they will be doing their best to remove the asset from a cash strapped partner. Management will need to raise to protect the company.

·I believe there is a nearby lease where you need to get a farm in partner. They will be doing their best to get the partner to farm in for a free carry. The more interest in the area and the better hope you have or retaining a decent %. FAR managed to do this in the Gambia by farming down 80% to 40% and getting a free carry. PCL will be trying for similar. More interested parties and the more chance there is.


Things to assume:

·There will be periods of inactivity. It takes a while to plan drills. Assume it will take longer than you expect and that the SP will drift in those periods between. Some will use the spikes up to sell down their shares and get a Free Carry. People never quite pick the High or the Lows (or we’d all be rich)

·Assume the institutions will get interested if something is found. They will not be looking to buy at a premium but start playing games to shake the shares loose at a low price. They will figure time is on their side and holders will lose interest.

Good luck. The games begin in earnest once you actually find something. A good management team will be able to negotiate the pitfalls and everyone seems to be confident in their management so that's a positive.