As the then CEO of Mcdonalds said to a commerce student many years ago when asked by the student about the poor operating performance of Mcdonalds,you dont understand our business model we are not in the hamburger business we are in the real estate business.
So it is with KEY.Do they understand their business model?The Cyrene#1 was well worth a shot as it cost little $500,000(hopefully)and it was a double chance with the goldwyer and the conventional target.If the conventional had been successful then KEY was on its way as there are other lookalikes there,but that is history and it will be left in a funding deliema down the track.
Key is too hopelessly now underfunded to be operating in the harsh,underdeveloped canning basin.Even BRU and NSE who have large cash reserves are underfunded.NSE is using its funds up quickly and it will need to have a big success soon.BRU is different as it has proven up a lot of gas and the oil at Ungani but it will need a partner to develop the infrastructure to exploit it,hundreds of millions.
When I read the other HC threads of BRU and NSE the speculation is rife about takeovers or major shale companies buying in with huge amounts of money or majors circling and yet it is absent from the KEY thread.
KEY alone has a 70% interest in EP448,8500 km squared of which 2500 square km is in the condensate/gas window of the goldwyer supposedly,plus all the rest.
No one can tell me if any huge financial transactions go through in the canning basin that KEYS market cap of $5million today wont be very substantially higher.
If I was advising Kane I would say you have done a superb job as operator of the Cyrene#1 but dont let it go to your head and think you can drill holes all over the place.Take time out to smell the roses,look for a farmin partner for the Waugh#1 well,to reduce our commitments,do the minimum on our tenements as possible,wait out the storm with the share price,close up the shutters,do not dilute the shareholders any more at these ridiculous prices and let the big players do all the heavy lifting.
You might find by sitting on your hands and preserving shareholders money and the price appreciates to 8-10 cents after further financial interest by the big shale players in the canning you will be seen as a genius.
KEY Price at posting:
1.3¢ Sentiment: LT Buy Disclosure: Held
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