The market does seem to have got this wrong. At the commencement of the drilling campaign on 3 May the SP closed at 58c. I am very surprised that after so many strong and +ve indicators that at least one of these wells will be a success that the SP is now trading 10c less at 48c. IMO the results have derisked the outcome but the market doesn't seem to believe it.
I put this down to the markets loss of interest bcos after nearly five and a half months of drilling we still don't have a reasonably certain result. The market does not yet believe that the chances of success have substantially improved. IMO AED is partly responsible for this outcome by the lack of detail released and the poor timing of the announcements as well as it's failure to explain early on why it delayed production testing Lukut-1. IMO the SP should be trading at more than 80c.
Based on the latest announcement from AED I think we are quite a while away from having a clear outcome of these two wells.
ANZ
AED Price at posting:
49.5¢ Sentiment: Hold Disclosure: Held
