Gulfslope is not a fair-weather exploration company. They have had more than enough discouragement over the last 4 years to throw in the towel. They never even considered it.
You should keep in mind that there is rarely a true dry hole or big discovery. By far the most common result of any exploration well is ambiguity. The industry considers the area where the Gulfslope play is located to be reservoir poor in the Miocene subsalt targets. This is based on poor geologic analysis, IMHO, but it has kept everyone except Gulfslope from taking the plunge. So if Tau at least demonstrates the presence of high-quality sands at the target levels, then it will be very positive for Gulfslope’s prospects, even if there is no field there. Well results are seldom cut and dried. The details of what the well finds have to be carefully analyzed over time to determine what was actually found.
I don’t think Tau will condemn Gulfslope’s play concept even if it is a “dry hole”. Finding the reservoirs there is critical. The well might also find other new information which will reduce the risks of the other prospects. A “dry hole” at Tau will undoubtedly tank the stock. But it won’t necessarily drive Delek away, and Gulfslope will plod ahead regardless. They have managed to convince one big oil company to test their concept. They can do it again, and John Seitz has shown that he will keep going until he is convinced that the play is a non-starter.
As far as the Gulfslope bear case, I know how to make a strong one. I don’t favor it, but I will give my slant on it here sometime.
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