Well as foreshadowed ... We have had a touch on 1.3c which did not last long and the SP has bounced back up to 1.4c I expect we will trade mostly between 1.4 - 1.6c in the next couple of days.
I also mentioned that there would be considerable support south of 1.4c and it appears that this is the case with the buy queue at 1.2 and 1.3c swelling considerably every time a possibility of 1.3c trade might be in the offing.
Now we have the standoff, which will last a day or 2 in my estimation before we creep back up to 1.6c ...I think a close at or above 1.6c will be the start of the new up-leg. If you are of a view to top up then my advice would be to do it at the latest between 1.6 - 1.7c to maximise your gain before the buying starts to accelerate away..
1. We have a experienced Canadian Oil/Gas company who have farmed into BKPs tenements in the Georgina Basin
2. An independently accessed target of recovery in excess of 11 bill barrels of which up to 4.8 bill barrels may be recoverable. These estimates comply with Canadian N151-101 Standards of reporting
3. Hydrocarbons to be extracted via Horizontal drilling of "hot" Shale deposits (a process common in N.America but 1st time in Oz).
4. They have Id'ed drill targets and expect to start drilling in the Feb 2011. that is at earliest 3 weeks at latest 7 weeks.
4. They (the Canadians) have around $50m in cash to spend.
5. Mcap of BKP (undiluted) is approx $24m at 1.3c
6. BKP own 25% of (EP 127 and EP 128) comprising approximately 31,750 square kilometres (7.85 million acres), in the Southern Georgina Basin. So potential for upside is available.
7. There is some infrastructure in place, a major north-south pipeline runs to the west of Baraka?s permit areas and connects the Amadeus basin gas fields with Darwin. The pipeline parallels both the major north-south Stuart highway and a major railway line. Secondary roads cut through EP 127 and EP 128, and connect to major highways and the previously mentioned railway.
So ...
My expectation is that the price will rise much higher than 2c in the lead up to the spud of the first well. If they hit what they expect with the 1st well it's anyone?s guess how high the price will rise but the ascent will be dramatic and steep ...
Finally thought, if they find only 1% of the 4 bill target they will be extracting some 40 mill barrels of oil. Not insignificant given the prevailing price for a barrel of oil.
All is IMHO DYOR.
(Source: BKP ASX Report entitled the "Ryder Scott Report on on Potential Oil Resource Estimate" released to the ASX on 13th Dec 2010)
BKP Price at posting:
1.4¢ Sentiment: Hold Disclosure: Held
