It remains a mystery to me (and others) why the share price remains so low when we are now drilling (reducing the "boredom/inactivity discount") and with such significant de-risking having occurred (most recently, Halliburton's involvement in drilling the horizontal).
There are only two explanations that I can come up with (which have been mentioned many times before on this thread):
1. Everyone who wants a position has got a position. Also, the significant frustrations over the last few years have left many (who have sold out and know the potential) a little scarred. We won't see them re-enter until after the results are clear.
2. The overhang from the last SPP. It seems crazy to me that someone would sell below 7 cents when we are so close to a company changing event. I can only explain this decision by speculating that one of the 'sophisticated investors' that bought into the last SPP still haven't offloaded their position and have a policy of avoiding drilling risk. i.e. they participate to make a quick 10-20% by selling in the short-term and avoiding the drilling risk. But in STX's situation, they were unable to unload everything they wanted above 7 cents (their break even) and, now, with drilling getting closer and closer they are now willing to accept a little under 7 cents just to minimise their exposure to drilling risk, which will be realised for good or bad in the the next couple of months.
Its the only way I can make sense of the languishing share price, despite a healthy O&G sector in recent months, and other companies proving the horizontal techniques being used by STX can actually work.
I suppose if the above is correct, this suggests anyone setting on the sidelines have a unique opportunity to buy in cheaply.
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