'sundance closes on new partner, page-18

Illiquid,

I may have misinterpreted what you had said. An announcement of increased resources probably wouldn't spark a 'massive' run on SDL, but such anouncement would be a signal for the astute investor to buy, because I think that is what is holding up negotiations at this point. Surely there would be enough people in the market who would realise the significance of finding this extra 100-150MT DSO for there to be a price rise of some sort? The significance of course being than with the increased tonnage that all of the CAPEX and price modelling scenarios would be more reliable.

Of course at this point the major hold back is funding, but, in my opinion, that funding won't be forthcoming until the CAPEX and prcing models are based on reliable information. For these things to be based on reliable information, SDL needs to drill further and sure up more DSO resoures. If I was a company looking to partner SDL, I wouldn't be signing any deals until I knew that the CAPEX and price modelling was reliable.

I agree that patience will be the key now. I'm in a good position where I can afford to leave my holding in the bottom draw and see what happens come November - January with new drilling results. I think if anyone is expecting any more announcements on partners before DSO resources upgrades that will come from the November drilling (fingers crossed), they are putting the horse before the cart. It's becoming more and more likely that whoever is talking to SDL has said that they want some certainty on DSO numbers before signing up. Remember the first 10 years of DSO production is vital, as it helps dramatically cut the CAPEX payback period due to higher profit margins.

On the flip side of all of this is, if you expect that the DSO exploration target will be reached, with the domino effect being possible partner signatures, you can use this time to keep nibbling away and building your holding. The best time to buy SDL is when the fire is out of the stock and there might not be news for a few months. A lot of people have a sook and sell their holding, and day traders exit the stock also. If you look ahead at future events though, and are confident that the outcome of these future events will help secure partners, now is a great time to buy in cheaply.

Just a side note, the DSO exploration target only includes Mt Nabeba. It does not include any estimates from the Meridional outcrop that extends from Cameroon south into Congo, nor does it include any possible DSO from Mt Letioukbala.