Thanks for the post BS - The downfall started at the end of the...

Thanks for the post BS -

The downfall started at the end of the Poseidon program which many consider the downfall of Karoon and the trust of the value of the stock. Many consider this a failure, but the field results were positive.

Many consider "plug and abandoned” negative. All the wells from Poseidon and the current drilling in the Browse Basin will not be reused.

Consider the great list from B S along with the impression left by the Poseidon drilling, and I think this may be the reason for the current Karoon Stock price.

I am a long time holder of KAR but I cannot see the share price getting back to the teens soon even with positive results of the next two wells in the Browse.

There are many reports. Here is two to consider.

Bob

THE SIDNEY BUSINESS HERALD 2/5/10
EXTREME share price volatility was the order of the day for high-flying Karoon Gas as the market got its first chance to respond to uninspiring results from the latest test of its Poseidon gas discovery in the Browse Basin off Western Australia.

Karoon shares initially plunged 32 per cent to a low of $4.51 yesterday as investors digested the lacklustre results from the much-vaunted Poseidon discovery, announced by Karoon (40 per cent) and its partner, the US giant ConocoPhillips (60 per cent), late on Wednesday.

The stock rallied during the day to a high of $6.35 a share but another selling wave took it back to a closing price of $5.91, a fall of 75¢, or 11.2 per cent, on its previous close of $6.66.

Karoon was at $12.10 in July when enthusiasm for the discovery and its potential to underpin a liquefied natural gas project was at its strongest, with Karoon talked about at the time as being the ''next Woodside''.
Results from follow-up work at Poseidon have raised doubts about that sort of upside. Analysts at EL & C Baillieu said the latest results from Poseidon were disappointing and had raised ''doubts about the size and commercial viability of the field''.

The broker slashed its share price target for the stock from $9.30 to $6.21.

It said in the absence of a more positive outcome from the next well on the Poseidon structure (Kronos 1), Karoon shares would be under pressure until the company accelerated its Brazilian oil exploration program.

Macquarie Equities said that a significant cut in Karoon's estimate of 7 trillion cubic feet of gas at Poseidon was a potential problem given the commercial threshold for gas projects in the Browse Basin was high.

But it noted that Poseidon 2 was always an aggressive appraisal well on the flank of the reservoir.
Macquarie cut its Karoon target from $8.50 to $7 a share.


THE SIDNEY BUSINESS HERALD 2/10/10
Latest testing of the much-vaunted Poseidon discovery by ConocoPhillips and local junior partner Karoon in the Browse Basin off Western Australia has not produced the big confirming flow of gas to surface that supporters of the high-flying Karoon have been waiting on.

But Karoon insists that results from the follow-up to the Poseidon discovery well have not damaged, in any material way, its pre-drill estimate that Poseidon could contain as much as 7 trillion cubic feet of gas in the Plover reservoir - enough to rank it as a potential liquefied natural gas project.

Karoon announced the latest test results from the Poseidon 2 well after the close of trade today.
The stock was suspended pending the release but has nevertheless weakened from more than $11 a share in early January to $6.66 a share on Monday in response uncertainty about initial results.

Poseidon 2 discovered a new gas zone in the Montara formation but a drill stem test was inconclusive, with Karoon believing that "communication' with the formation was not established in the zone tested.
The partners will test the zone in a new area.
Meanwhile, brine present in the zone tested in the main Plover formation restricted the gas flow to a nominal amount.
"The Poseidon 2 well has met the objective of testing the extent and quality of reservoirs down dip from the Poseidon 1 discovery in a thickened Plover formation," Karoon said.
It said the position of Poseidon 2 about six kilometres from the discovery well was always risky if it was high gas flow-rate that was sought.
The crest of the greater Poseidon structure will next be tested by the Kronos 1 exploration well.
Karoon said it had the aim of confirming commercial production rates