Thursday, 3 March 2011
Xciting times ahead?
In short, the Company has proved up a huge new heavy oil field in the North Sea and is completing a technical report to turn this find into 'proven' reserves. That will then allow it to raise the finance to develop the field. The size of the find is likely to be between 170mn and 250mn barrels of oil.
This week the company said the report was complex and important and instead of being ready in mid-Feb to early march it will be ready at the end of March. Now, AIM being tradersville, this has caused a 25% sell-off in the shareprice. Yet there is the prospect of a material upgrade in just a few weeks time. It is a great opportunity. As it happens today looks like the end of the major selling phase has come to pass and there will be a small push up. Perhaps tomorrow will confirm whether this is a bump or not. Either way the share could go as high as 600p on the news but is more likely to get stuck in the mid-400 - still 50% from today's prices.
(N.B. CU owns 15,000 shares in XEL)