I believe you are interested in understanding why the trading in Gulfslope is so weird, because you evaluate stocks by the financial numbers. I’m afraid in this case the numbers tell you nothing. In the case of Gulfslope, unless you have some insight into the nature of the exercise you will never invest. You say you don’t like to ignore the numbers and assume that Seitz will make it ok. But pretty much every Gulfslope investor is someone who is betting on John’s very specific vision. They are almost to a man/woman people who are friends or family of John Seitz or one of the GSPE employees. Yes, it is a public company, but its public face would send the average investor running. So essentially there isn’t any normal investment activity in GSPE. I would imagine most of what goes on is programmatic and carried out by bots.
This will all change once Gulfslope does what it is supposed to do, which is explore for oil by drilling. But for now, and for the last five years, the company has been more theoretical and potential than real. Since it is such a strange beast, ordinary analysis doesn’t work for it. If you hear that this ex-CEO of Anadarko has a missed play on the GOM shelf that could be hugely profitable, and you believe he could be right, you buy the stock as a rank, win-all, lose-all dice roll. If you don’t hear the inside story, you never get involved. It’s John’s concept, he’s the one who started the company, and until he gives up, it will stay alive. That’s the unusual truth, and it is why the trading doesn’t make any sense, and is largely irrelevant.
The Delek deal was huge, because it makes testing the concept on which Gulfslope was founded possible at long last. So, what happens now? Canoe doesn’t test the concept, so it would be nice as an income generator if it is a producer, but a dry hole there won’t kill the company. Tau does test the concept, but it is only one test, and the play concept won’t die because of one dry hole. John is proving to be very determined, and I am betting he won’t give up until several deep wells come up disappointing. He has apparently pared the expenses down to the point where he can hang on indefinitely.
Current stockholders might as well hold on and see what happens over the next year or two. If the concept holds up, Gulfslope will be huge. If it doesn’t, it will evaporate like the dream it has been up to this point. Who wouldn’t want to have a little skin in the game and see how it turns out?
