PSA 0.00% 4.1¢ petsec energy limited

market is a funny thing...

  1. 1,317 Posts.
    The market never ceases to amaze me, a company (PSA) can announce the drilling of a low risk, high reward well in prime acreage (GOM) and its share price drops!!! And another company (AYO) can announce the drilling of a rank wildcat, Yesiltepe, and its share price goes up 40 cents during the drilling.
    It will be interesting to see what the market does when the results of West Cameron 352 #14 are known. This well and its immediate successor #15 have the potential to add at least a couple of years reserves to West Cameron production and answer some of the criticism of the stock that its reserves are weak. In other words if these two wells are successful, PSA could pull a net 5 bcf out of the ground for the next three to four years.
    I think the company is partly to blame for the fact that its present healthy financial position is not reflected in its share price. Its answer to miningnut's query about the release of half yearly profit figures is an example. PSA more or less said to mn that the market can work it out for itself, it has no intention of telling us how much it made!!
    I suppose a company that has received the sort of shellacking that PSA must have received in the late nineties as its share price dropped through the floor boards must be a bit sensitive to the media and I suppose one can't blame them for preferring to announce solid achievements rather than hoped for outcomes. But just imagine what the share price could be if PSA decided to do a presentation to analysts of its current activities of the kind AWE or Amity do on a regular basis.
    Does anyone know for example the full potential of Vermilion to PSA other than those of us who listened carefully at the May AGM and know something of the history of the area. West Cameron has got PSA solidly back on its feet, Vermilion is going to make it a substantial producer and money spinner.
    Lets hope the next two wells are solid achievements and the announcements confirming same are appropriately treated by the market. The new wells are targetting two sands with 5 to 8 reservoirs. If they can pick up a couple of lower reservoirs like the two that produced so bountifully earlier in the year from existing wells and gave PSA its very healthy March quarter production figures then the revenue figures for Q4 will exceed anything we are thinking is possible now.
    And just finally nice to see the price of Henry Hub gas back above $US 5.00, that too will not do PSA any harm. I bought some more this week.
    Cheers JBC in Wales
 
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