What was the explanation for the K4 failure? Yes but that is not...

What was the explanation for the K4 failure?

Yes but that is not a play proving risk, which is what everyone wants to mitigate here.

I don't personally care if it's not a play proving risk - it's a risk to the share price, which is what I care about. When you're assigning a valuation you used a risked NPV or EMV, and corporate risk definitely needs to be a part of that. For instance if Jaws fails for drilling reasons but geologically the play is still viable, and STX is forced to raise money in a very negative market sentiment for a re-drill, it doesn't affect the COS of the play but it certainly affects the EMV of a Strike share, which is what ultimately gives us shareholders our value.

So if we are 30% COS now then it could be 45-50% or more after the horizontal has been drilled and cased successfully, whereas the completion of the entire vertical well probably only added 2-5%.

Yes, I agree - and the vertical was one of those corporate risks I'm talking about. There was no real play de-risking done by the vertical, it primarily a financial risk in case the rig fell over, and we avoided it because the drilling went perfectly.

But you're right, de-risking is a staircase, but an uneven staircase - some steps are much bigger than others, and the announcement that tells us they've successfully run casing in the horizontal will be a very big step up.