GulfSlope Energy Inc (GSPE)

[Gspex]

We long termers should keep in mind that Gulfslope has only scratched the surface of their play potential. There are Canoe type prospects all over the shelf. As far as the subsalt play, Gulfslope has been hampered by a lack of money to buy better seismic data, reprocess existing data, and acquire leases. Having some production income or even just the income for getting well permits will make a huge difference. The existing seismic image constitutes the biggest risk for most of Gulfslope’s prospects. It can definitely be improved but it will take money. Better data might also show that there are more/better prospects on unleased acreage. The company is really in the very opening stages of exploiting a potentially huge, very low-cost resource.
We should also keep in mind that the Delek deal only affects a small part of a very large play. Once Gulfslope gets a jumpstart with a little income they can work on prospects not tied up with Delek. And they will get 100% of those, rather than the 20% in the partnership. I can’t believe people are not buying an ultra cheap stock which has such huge potential. Shorting it in the belief that Gulfslope will go under is a really dumb move.