Today's press release, brief as it was, is rather typical of the sort of release Petsec has put out in the past.
The company doesn't give estimates of flow rates. It can't. It doesn't production test because flaring of gas, at least in the GOM, is forbidden and the company knows any way that the sands are commercial.
Wouldn't Orchard or Nexus like to be in the same position!!! PSA will tell us in due time what the flow rates are.
The company might have told us how many sands it was targeting so we could see whether the two sand intersected represented 100% success. Maybe someone should ask the company. If they are your typical GOM sands, which is I think how PSA has described them then they are in the vicinity of 5-8 Bcf gross.
It would also be helpful to know at what depth the sands were intersected and whether or not they or similar sands have been produced previously. If these are totally new sands at depth then maybe the reserves are bigger than we think.
Today's result augers well for the next two wells. The second won't be at target depth until the end of February. So obviously the targets are at considerable depth.
As someone said on this thread today's result is a helleva lot better than 17% of nothing. But it is more than that it is an example of Petsec's low risk highly profitable and successful strategy. And when you look at what other Aussie oilers are doing in the US none are getting anywhere near the sort of flow rates that Petsec has achieved.
Once today's well and the second Vermilion acclerated development well are on line, PSA should be producing 30 mmcf a day. That's huge in anybody's language.
I think the continued sell down of the company including through a broker who was recently responsible for a positive recommendation, is a bit hard to understand.
Perhaps the 2004 profit result is overhanging the market. Maybe someone just needs the money. It happens. My bet is that once the 2004 result is released and out of the way, the market will focus on 2005 which should be a bumper year. I partcularly like the look of that St James Parish acreage.
One of the advantages of being successful and having a big exploration budget is people bring projects like that to you.
PSA Price at posting:
0.0¢ Sentiment: None Disclosure: Held
