TA is useless when there is good news!Remember that positive news always wins over TA any day of the week. Its when we are not expecting any news that TA is important. We should get news about the 4th well early next week and possibly get testing results for well #2. To me the share price movement today was due to momentum traders who don't know the story and don't hold over the weekend. I think that we will fluctuate between .47-.60 (might fill gap at .47 where I will put a bid for more) until news is released and then its either off to the races or down back to the high 30 cent range.
For what its worth if the well can flow 2MMcf/day assuming the joint venture can NET $3/Mcf the well will generate about $2M in profit a year (50% belongs to PXM). Estimating the cost of the well at $1.5M (including tie-in) the well would pay for itself in less than a year. After that its all profit. If the gas price goes up or if the well can flow more gas then up goes the value.
Originally I was going to sell into this rally but when I saw the flow from 1 zone in the first well I thought it would be worth seeing if the 2nd well which had more pay zones in the same sand (25% porosity) will out do the first. I have my money on it!
GLTA