Now that last weeks rush seems over, it is time to focus on those things we can see and evaluate. Here are my theses:
1. ADX' farm-out will hit new dimensions on share price
If you have a look on the speaker programme of last year's APPEX regional in Istanbul, you will notice that Paul Fink's first speech is called "Prospect Forum - Four X-large exploration and appraisal prospects offshore Sicily Channel, Tunisia and Italy - Paul Fink - ADX Energy". For most of us, one of these "X-Large" prospects certainly is Kerkouane/Dougga with its 500m+ gas column, as it was presented on AAPG. Another one should be Lambouka/Pantelleria. But there is always one or better said there were two missing: CR AX and the Elissa field. I believe, that Kerkouane and CR AX combined in a farm-out package would be the ultimate goal for every major. As Fink said, CR AX is only continuous to Kerkouane, they're of the same type. But what about Elissa? I also strongly believe, that Elissa has Dimensions beyond Dougga or Lambouka. Well, there is surely much room for speculation, but when they shot their 3D dual sensor pics or movie, why isn't there any information about Elissa? Elissa is on every presentation, so I guess it has much potential. But how much exactly? ... IMHO a major should try to get stakes in all of them. It makes sense, since they're all adjacent to each other and discoveries or fields along the boundaries could be assessed easily from both sides.
1.1 The more valuable the name of the JV-partner, the more this will leverage ADX' share price. I think this is pretty much obvious. Many of us think about Shell as a partner in the first. But if you have a look at their long list of difficulties, faults and misbehavior in company history, you should wish for someone else. I would like to have Genel at ADX' side, or GDF Suez (a friend pointed at them recently; thanks to him). Both of them are interested in the Mediterranean, but Genel has already stakes in the same area as ADX. And they are on a growth course. Nothing less than the vision to become turkey's no. 1 oil and gas supplier in 2015/2016 drives their efforts to find new (regional) prospects and to enhance their existing ones. From my perspective, this would give the sp an enormous boost. The best thing is, that Genel's CEO took part in Istanbul as a speaker. His speech was just before Fink's.
2. The Parta seismic will accelerate ADX recovery
This is of really big importance. ADX suffered much because of SD. Too much, if you ask me. We don't discuss whether it was or wasn't fair. We all know what happened there and even if we're shareholders and love our money, it was only right that the share price drop happened. But now that many have reckoned with ADX, it is time to re-evaluate the properties. And Parta plays an important role in this. The farm-out may took some more time, but shareholders want to see if ADX is working. They want anns about progress, developments, anything - just to stay in contact with the ADX-grunts in the field. Even a blog would make it here. It is all about trust and confidence. And Parta is the key. We know now that they identified several interesting parts within the license, where it is advantageous to investigate more 3D. For me: a good sign. A sign of working in progress... a confidence-building measure.
Conclusion: ADX Energy is on the threshold to new heights. But they still have to win shareholder confidence back. And I think they are taking the right steps. The last weeks are in my opinion of very important nature for ADX in general. I guess there are at least two interesting parties related to the farm-out. And I appreciate it, that ADX doesn't want the fragile and time consuming negotiations to be disturbed by any idle party-rumors and keeping it secure behind closed doors. Thursday's rise in share price shows us all, that there is still a huge interest in this company. Many people will load up if ADX announces some sensitive news reagrding Parta and the Sicily Channel. This time it could be much more than 30 mil. in volume. One last hint: open two new windows in your browser and compare the speaker lists of the last APPEX Regional in Istanbul and the coming one in London.
And for ADX, if they read this: you should be aware by now (after thursday's trades) that there are many people watching your steps closely. Most of them still believe in you. Like me. So hold on, be strong and continue to build a successful oil and gas company...
Best regards, Oki-Wan 2.0
ADX Price at posting:
2.5¢ Sentiment: Buy Disclosure: Held
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