As I said earlier, insider traders got wind of the news release and reacted accordingly. I originally thought it might be too shake out shares because of positive News upcoming. I was sadly wrong... This 1Q news release is horrible for many reasons:
a) well is now going to cost ~$180MM USD or roughly $0.25B CAD... or like 25% or Fronteras market cap.
b) because of cost overruns, CGX now owes Frontera more money... again. They give up 33% of working interest to drill this Wei well and couldn't put in contingencies to protect themselves from cost overruns. Mind boggling how utterly useless these folks are!
c) this "all star" drilling team is proving to be a joke. More lost time on Wei-1 and a sidetrack needed. Maybe senior management should have paid a pretty penny to steal folks from Exxon or Total instead. These current drillers have costed CGX/Frontera a ton of money and it's clear they cannot model the Guyana basin and associated subsurface challenges accordingly. Better qualified talent is needed!
d) absolutely no remarks on how much oil bearing oil was actually encountered in the different units. Could be 5m or 100m, no one knows. Great way to install confidence!
e) why in the hell they remark "are yet sufficient to underpin commercial development" is beyond me. If they are sheepish to say how much net pay they have encountered, why in the living hell say something like this? Again, trader's probably saw this statement and pushed this stock down. Like with Kawa, poor messaging resulted in a plunging of the share price and this current messaging does neither company any favours.
f) frontera somehow manages to post a net loss for 1Q. No wonder they trade at such a low PE ratio... they can't drill big wells within budget and can't net profits in their day to day operations to offset exploration costs.
End of day, least they are still drilling and hopefully this Santonian over the next 1000ft is the big one. In the meantime, it's clear CGX and Frontera is run by morons who cannot even do basic things correct.