$Elixir Energy Ltd(EXR.AU)$ Just revisited this oil and gas company. The share price corrected 18% yesterday after the company made an announcement of its testing result.
If I had not known better, I would have thought the test results must be bad to trigger this drop. I had digged out the announcement and noted that unexpected gas surge during the test resulted in instability in the test. As a result, the company planned to use different tubing string to contain this unexpected surge in gas flow. To do that, they need to shut in the well to prepare for the new test, resulting in a week's delay.
Market hates uncertainty, resulting in the big correction yesterday, continuing into today. The correction appears strange, at least for me. Unexpected gas flow surge to me is a great result on its own! Although unstable it might be, the implication is also strong gas flow. Am I missing something?
For an explorer, this is probably market reality. With a market cap of only $181M, the participants likely consisted of mainly small retail investors and speculators alike. To be sure, there are big supporting shareholders like $Omega Oil & Gas Ltd(OMA.AU)$ , its very own neighbour. However, the influence of small speculators likely magnified the outcome here!
Of course, with the testing still to come in a week, nothing is for sure. Market might also have priced production worthy success for its current test. If you believe that oil and gas still has a role to play in the new economy, there's still plenty of play left in this...
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- mizzle·58 minutes agoTOPI added on that 18% flush too lol. Unexpected gas surge sounds bullish to me — only real risk is the extra week spooks weak hands again?LikeReport