Martin,
1 out of 15 is a very, very old number. The last decade's advances in geophysical technology have improved that to something like 1 in 8 for rank wildcats (i.e. new basin, no well control) and up to 3 in 4 or better for development wells. I do not know the details of the properties on which the company is drilling, but I would think that there has been some exploration and perhaps even past production in the vicinity. You cannot judge the success or failure of this technology until these facts are known and analysed. Question: are you going to assume that in the event of a commercial discovery (emphasis on commercial) that the success was due to EMSounder? Or was it a result of a proper analysis of all of the available data? Until you and the other investors in IMMM have the details of the geological model and of the economics of the situation, neither you nor anyone else can make an informed decision regarding the efficacy of this technology. For example, IMMM could announce a 'discovery', with the well producing, say, 100 barrels per day. If the well costs are high, the well may never pay out. Pulling another number out of the air, say 1000 barrels per day, would be a reason for cautious rejoicing. Then you must see how the flow rate holds up over time. If it's down to 100 barrels a day in 3 months, you have a problem. If it's at 950 barrels after 6 months, break out the champagne. But then you're back to the problem of cause and effect (above). The difficulty is that a technology such as this is difficult to prove or disprove, as there can be no control group. Each well is unique.
Disclaimer: I am not an investor in IMMM in any way. I have posted here in the past and do so now solely in the interest of sharing a bit of knowledge about the realities of the oil industry. Finding and producing hydrocarbons is both my profession and one of my passions. Best of luck to all of you in your investing endeavours.
Mike |
