Originally Posted by Thargor
Do you not feel at this stage that they've probably found something? Enough to take the gamble anyway, I'm pretty confident oil has been found and wont be derisking, Id be buying if I had any cash left. Just from the deals that are being done and statements from Landau and others and everything else I 100% want to chance it.
Possibly, but I wouldn't take much notice of internet rumours at this stage. It's too early, and a bit go before they reach TD yet. I've heard these rumours many times in the past with DES, AEX etc..
But the early indications of a 'working petroleum system' from the drill is encouraging and increases the COS. But I thought they knew this from the drills in the 1990's? There's a long way to go before any oil/gas is deemed as commercial - the quality of the oil, actual quantity, flow rates etc. Maybe a 40% COS is correct, but would have to do a bit more research on the wells drilled in the past by Amoco, Chevron and Conoco. Hard data to get hold of, and no commercial oil find was ever confirmed.
AOI/HRN are also very experienced and a good operator. But HRN are a one trick pony, and if it goes tits up, the stock will tank. Worth next to nothing.. They will drill the Shabeel North-1 well next, but if the current drill doesn't go to plan then market confidence will be shot.
There's also the political risks. ATM machines don't even exist in Puntland, it's that third world. Getting payments from the government - if an oil industry was ever formed - would be a serious concern of mine. Then there's all the other security issues to deal with, pirtaes etc.
But then there might be a shít load of oil there, who knows. HRN is definitively a better bet than RMP though. Not sure how much the Georgia assets are really worth to RMP.
HRN could indeed multi-bag if they find lots of oil, but not for me. 'Trap Oil' is more my play - a few free carries in the NS (more politically friendly) with many different drill prospects. But less potential upside than HRN.