You would think something catastrophic happened.....First two production wells at test equipment max flow rate.
The risked NAV is $3.55 cents according to RBC so we are now trading at 73% of NAV despite the major part of the 2P reserves (Stella) showing 40% more production on test than expected and much of the 33 million 2P will be converted to "producing reserves". As mentioned the capex is a measly $35 million incremental for this year which is paltry.
What will happen to the share price is the thrid well comes in at 10,500 boepd? Well that well result is just three months away. IF that occurs then all it is then is a fully derisked waiting game as Stella is100% derisked and we are just waiting a few more months for the FPF-1 to catch up.
Oil E&P stocks move differently:
Take Bankers which is a major holding of mine.....really all they have to do is just keeping drilling 40 very cheap horizontal wells each quarter and the production growth is highly predictive. The type of problems are micro in nature and can be mitigated in fairly short order.
Ithaca is a totally different beast......production is off shore, wells are extremely expensive and the production equipment is massive on surface and the sub sea systems are wildly expensive and fraught with execution risk (above and below surface). The production growth is very lumpy as opposed to small incremental....Ithaca is major incremental because you have to spend a ton of development capex ( close to $1 billion for Stella). But unfortunately with these highly complex developments come a very high likelihood of finding what Ithaca management is finding.....weather, equipment that requires an upgrade afterall and the resulting postponements and as far as base production, the uncontrollable shut ins of operated and non operated fields. Just a way of life for the off shore E&P as opposed to a on shore massive resource field developer like Bankers.
There are pumpers of INA on Investor village that talk about how INA is a better investment that Ithaca. Well INA has done zero in the last twelve months and Ithaca is up considerably. Maybe this year INA may out perform Ithaca.....I hope so as so far it has done NADA.
IF a persons cannot take the Norh Sea E&Ps as investments because of what I just mentioned, than maybe try an onshore field developer.