Good Morning,
I expect to hear from Shoal Point Energy next week in regard to announcing their first identified drill target and projected start date. From several discussions, I've learned that there exist multiple very rich targets to choose from in the Pawnee Sandstone formation. There are also targets identified that were not expected going into the seismic shoot.
If/when we hear good news next week with targeted drilling slated in December, SHP could turn into a very exciting stock in the early new year! The two week decline that we're in has completely cooled off the overbought status of the stock. Weekly RSI went from 85 to 53! Yet selling volume is thin.
Two out of three holes have historically hit for Shelby Resources, our partner, over the past decade and a half. Shoal Point has the cash to drill a second hole if needed, which is nice insurance if they hit an uneconomic well on the first go. However, Shelby has NEVER had a dry hole on the first shot after shooting fresh seismic! So the odds, although not a guarantee in the oil business, look exceptionally strong that SHP hits on one of the first two wells.
That would ensure this is scalable and most, if not all, of the funds need to keep drilling new targets can come from cash flows! I believe if they have success early, we'll see .30-50 cents per share in Q1 2020 and a continued steady rise during the year.
Add on weakness! I like any chances to accumulate under .22 CDN/.17 on SHPNF now that were are so close to putting a drill in the ground. This quiet week, just prior to action starting for SHP, is a good chance to top off positions nice and steadily at good price limits. Adding slowly now is our chance because, I have a feeling, that when the stock turns up again in earnest, it is going to fly, and be tough to try and chase.
