Hi NumeraireAgree, the best time to buy is when sentiment is at...

Hi Numeraire

Agree, the best time to buy is when sentiment is at it's worst....if the underlying assets and business is good. I don't see capitulation has happened yet? Look at OEL, that is capitulation!

I don't believe the underlying business is bad but i don't believe the market fully appreciates how the latest GSA has been setup.
1. It only covers a partial amount of our production. Assets will be under utilised
2. We are being allocated a larger share of sales in the GSA in the first two years over our JV partner. Does this result in more imbalance? It will certainly result in a bad third year.
3. We are pumping less down the NGP. Before Jan-1, it was c40 TJ a day. Since then it has been mid 20's a day. Why could we not sign up more sales when there is a critical shortage of gas?

The farmout could / should be exciting but without firm demand for our gas, I don't think it's a great negotiating position to be in. We need further GSA's to commit 100% of gas production. We can then go confidentially to any farmin partner to say "look, see we are have demand for our gas"...otherwise they're just drilling holes for the sake of it. Expensive holes.

I'm looking forward to the March quarterly and hope to get some increased transparency and visibility then.

Three exciting things to look forward to:
1. Drilling program - H2
2. Range progress - H2 onwards
3. Dukas - 12 to 24 months away.