Some more observations on InterOil’s sell-off

We’ll have to see how long the little downdraft last, and how to profit from it..

So, here are some more observations:

  1. What is the worst thing that can actually happen? It’s testing that show there is no commercial oil leg at Antelope1.  Since it has already been shown that there is oil (it just doesn’t flow very well, low permeability, at least so far), the worst is that they’ll have to drill other wells to find better places to get the oil out. Somehow we don’t think that’s a disaster 🙂
  2. It doesn’t detract from the enormous success of the Antelope1 well already had, the 382MMcf/d gas flow and 5000 bbs/d condensates, all with the pipe just 1/3 open, the 2000+ ft of net pay, the 8.8 average porosity, etc. It’s one of the best wells in the world, no doubt. Nothing can detract from that.
  3. If the price gets lower still, perhaps because a combination of general market sell-off, or some more debenture selling or DST’s that show no commercial oil leg (we don’t expect news this week, but you’ll never know), shorts will have a last chance to cover at lower prices. We think at least some of them can’t be that stupid as to not to know that this will be their last chance, but we have to say, their stupidity continues to surprise us.. Any short covering will limit the sell-off though.
  4. For those that want to increase their position, it will be a good chance. Options especially have gotten terribly expensive, a second chance there would be highly appreciated by some..
  5. What kind of options? Timing InterOil’s development is not something we recommend, so go for the Jan 2011’s..

2 thoughts on “Some more observations on InterOil’s sell-off”

  1. Ooops, sorry people. Slightly repetitive (at least the first couple of points). All that beer and football…

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