Have to say, I find it interesting when faced with two possible thread headings, so called "supporters" choose the one with the most negative "tone"?
One of the interesting aspects of posting on HC is the constant...and often ongoing...subliminal inference peddled to all and sundry via the rolling subject headings.
People feel on edge about their stocks, with each other even...or at the appearance of a single seller...and don't even realise why?
lol
KEY is investment grade...however we are early days of the discovery process...and by that I mean, "discovering" how good an "investment" it will be...wealreadyt know they have discovered something significant!
After a couple of weeks of flow testing...and I suggest reinvestigation of seismic, with approriate adjustment for the lower GWC...we may well see a preliminary "guesstimation" of the target field size?
Perhaps a P1 number for the individual well recoverable reserves...and a P3 for the likely target field size?
Knowing KEY, it will likely be a conservative affair, but Aminex may force their hands here?
On this issues, there appears to be a bit of a push to lift the profile (and price), of Orca at present, with the odd report doing the rounds suggesting it is undervalued by some 100%...I have heard Aminex is also trying to lift their profile.
Anything these two do, not only lifts the profile of the Tanzanian offshore...but by stealth, impacts the wider coverage of KEY.
Interestingly, Orca will always be discounted somewhat due to the locked in "reserved gas" they must supply to the power stations...this same discount need not apply to others in the region.
With this impediment, based on some 450bcf of proven reserves, the company is being valued at some $480m...or just over US$1/mcf in ground.
They are currently averaging some US$3.60 or so per mcf when the safe gas (US$2.20/mcf) and industrial gas (US$11.50/mcf), is ombined according to volumes of each sold...the average as I say is about US$3.50
All the above numbers are rounded off...I am going by memory here.
Anyway...the point being, given Orca are being valued at just over US$1/mcf for proven reserves, based on receiving just $3.50 or so on average for their gas, the potential for KEY to receive 3-4 times this amount clearly supports the vew for higher in ground gas values being applied.
So what has this to do with today's trading!
Absoltely nothing...which of course is the point!
We are just seeing trading patterns forming here...nothing more...the only question of course is which one will transpire for KEY?
Long termers need not worry...short-termers however can stress as much as they like.
A good result for them might see a 36c+ close tonight, supporting a weekend hold and kicking off a run from the gates on Monday...DOW willing?
A bad result for them would see a dead in the water close tonight at or about 32-33c..and similar low volume, non commited trading around these same numbers for a few more sessions, if not weeks, just as was the case in the 20c line after the first spike.
A lower close (say 30.5c or lower), however would close the gap and open the gates for another run next week, in which case one would want to hold over the weekend...or at least buy from the break on Monday!
In the end however, these are all just patterns...and all ultra-short term...so whilst some will scrap about for the exact bottom, or break, or whatever, I suggest there will be a large goup who will simply look on from time to time, content in the knowledge of where she will eventually end up.
Nothing we see on screen right now...up, down, or in between...will impact the gas in the ground, or the extraction thereof!
Speaking of which...I wonder what the gas will be doing over the weekend...I bet it wont be stressing over the share price?
lol
Cheers!
KEY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)