to me, that is a nowhere strategy. proving up reserves but not having a plan to utilise them.
Fast forward to a year or so from now. Put yourself in a negotiating room with BG. You say I want $5/GJ for my GSA. They say no. What do you do hotshot, what do you do?
You have nothing because you have done nothing but jamn yourself in a corner.
Oh well, you do actually have SOME options, they are:
accept a much lower gas price because you must (have I mentioned how capital intensive drilling wells are and how dillutive it can be to bring them on prodcution??)
you tap the market for some more funds, more dillution
you tap the market for some more funds to help monetise your reserves, which is even more dillutive and takes considerable time wreaking havoc on your sp
the best option however is, you generate a bidding war for your assets. I dont think it is very savvy considering it is a completly uncontrollable destiny
When you compare the current path management have chosen above, I think it is very evident that this is a great strategic move in building a position to deliver the best to holders for the end game.
I have already said I agree that opening the register is a bit of a sucker punch to the faithful. But its your destiny and your control. In the time you have sat here bloggin, you could have opened a position at another brokerage and bought in as well.
Cheers,
SF
BOW Price at posting:
$1.34 Sentiment: ST Buy Disclosure: Held