We will start a new series. It’s not something we enjoy but it has to be done. Some of those who short InterOil do not only do so illegally (that is, using naked shorting), but they also distort the truth. A lot of that distortion we see on a daily basis on the message boards. It’s quite astonishing. The first ones dispel a bizarre and quite nasty theory that had gained some currency on a few boards.
There is a wealth of distortion so it’s not a terrible tall order to report and document these on an ongoing basis. We will post them on a regular basis and accumulate them on a page. Someone has to show this.
This guy, who calls himself ‘Bostonkenmore’, is one of the worst offenders, no doubt about it. He alone has already provided a rich source of distortions and lies, some of which we will show you here. Here is the first one:
Didn’t measure gas pressure
- “The DST tests have been short and haven’t tested the pressure of the well.” [Bostonkenmore]
So, according to this guy they didn’t test the pressure of the well. It’s simply wrong. Go to any DST results and what will you invariably see… measured gas pressure. For instance, the latest results from DST#4 at Elk4
- At DST#4 it is “Reservoir Pressure at 7,549 feet (gauge depth) 3,697 psia” [InterOil Elk4 drilling update no.9]
When I pointed this out, he reacts, well, with another lie:
Instead of coming up with some sort of explanation how he could have written that they don’t measure the pressure (which is in every single DST result), he argues that they haven’t done ‘extended’ testing.
- “They didn’t test it over an extended test.” [Bostonkenmore]
This is actually something he has argued quite a lot before. It’s plain wrong, but let’s get into it some more, because it’s not something he came up with, but a guy called Jaxson905 who wrote extensive reports on the ‘Value Investors Club’. Here is a quote from that Jaxson905 write-up
- “when you drill a fractured reservoir, you often have very high initial flow rates (as the fractures drain and oil/flows very quickly to the well) but the wells then “can collapse to zero over dinner” (as one of my geologist friends likes to say).” [Jaxson905]
So far for the unsubstantiated and sourceless nonsense, now the facts:
- Elk1 DST1: No pressure depletion was observed from surface pressures throughout the test and subsequent build up. (The test took place between 22-4 June 2006) [from presentation Elk1 Mid October p.15]
- Elk DST2: No pressure depletion was observed from surface pressures throughout the test and subsequent build up. (Test conducted to 16 October) [from presentation Elk1 Mid October 2006 p.15]
- Elk 1 open hole test ran a couple of days, only 4psi pressure depletion during flowing [from Elk Final Technical Presentation Dec 28 2006 p6]
We’re also almost sure that the next, and last step at Elk4 will be an extended well flow test after having cleaned up the skin and using a bigger pipe (both of which have limited the gas flows in the previous DST’s).
It’s funny to see to what lengths people go to distort the facts. But there is a whole lot more, stay tuned.