Ok, this is probably the hardest thing an oil can face.
When do you call it a dry hole. It could be argued that if you don't take it all the way to bottom you really don't know. At the same time, if you have evaluated the seismic and made determinations and they don't pan out, when do you call it. Well Buccaneer called it.
I'm sure they knew what that would mean back in Australia, but I am not sure Australia knows what that means in AK.
Here is a company that realized they had nothing and instead of sticking the State with more ACES rebates and prolonging the agony they stopped drilling.
This preserves their capital and is going to give them credibility to get their bonds back. They could just have easily cost the State more money.
Now the question is what happens now. The West Eagle project didn't have any reserves booked, they had never borrowed money based on it's success, so the overall picture of the company has not changed.
If Meridian is happy then the company continues as is. If they are not then all hell breaks loose. For those predicting the companies demise, it would take more than this to do that, unless Meridian wants to crater the company. I think not.
The trading halt does concern me though, why are they in a trading halt, unless they are out of money, but the overall picture doesn't show that.
Just wondering.
