RE:Boo Boo and KAY BOB...Well I am not an oil historian but I will offer my best answers and I have nothing better to do as oil goes back down to $45.
1)Leduc was discovered after 100 or more dry holes the previous years so that was a big surprise. This issue is that this was the first well at depth. The other holes just didnt go deep enough.
2) the leduc structure is well defined as there were many many many wells drilled into it and thus allowing for perfect knowledge and modeling. No one knows what the Bannock creek structure is. Of course you need structure and reservoir rock quality to make things work. Remember that Leduc shot oil out of the ground when they tried to DST it.
3) From what I know they failed to get to depth on the previous efforts and finally they got to depth on their last try. Not sure why it cost $3 million other that the site is in the middle of nowhere and SMI is not an oil company. Their drilling guy is not familiar with drilling in Saskatchewan so that could also be a problem. And certainly Stan knows nothing about oil....so three trys I guess.
4) Lost circulation can happen anywhere and can easily happen in a low pressured, high permiable zone like a sand or gravel seem where the fluid goes out into those zones rather than back up to surface. A big problem as you run out of water or mud to drill and you are not cleaning your cuttings out of the hole. Very easy to get stuck in the hole. Big trouble but experience usually gets you back on track.
5)Why not walk away because this is what they are doing. To abandon this (publicly) after spending millions would mean $0 share value and the end of the going concern. No more SMI or job for management. They are trying to salvage something here. I guess. Calls for speculation.
6)Just the fact that they are not producing, getting revenue and attracting $ and/or partners with outstanding results leads me to believe the have nothing. No land grab going on etc. etc. A hint or a discovery by their reports, but oil stained rocks do not pay the bills. Oil coming out of the ground and to the refinery does. My conclusion is Black Hole.
Hey that was kind of fun.
And I would never be a director of this company.