First, a review of this particular line in the release:
"Dejour is now modeling Kokopelli for the next wave of development targeted for Q4 2013."
The series of releases from the company on its Kokopelli drilling program this spring have consistently and affirmatively detailed "ample gas shows, as expected." Translation = It's reasonable for shareholders to assume that production from the four-well program will be in line with management's "expectations." Basically, production from the four-well program is comparable to neighboring Bill Barrett (BBG) and WPX Energy (WPX) [I am not referring to WPX's "horizontal" well).
Furthermore, as we all know, the current, private drilling partner (fund) has the first right of refusal on the second drilling program at Kokopelli. Now, today, Dejour management has given a time frame and a clear indication of its plans to move forward with additional Kokopelli development later in 2013. From this we can deduce this much: The current drilling partner, also obviously aware of the progress of the current drilling program, has already likely told Dejour that it will commit to a second drilling program at Kokopelli. With this, there are two items of interest. #1, Dejour will have more favorable terms with which to negotiate the second drilling program. And #2, due to the WPX Mancos discovery well nearby, we know Dejour ABSOLUTELY wants to drill a horizontal (Mancos) at Kokopelli because of the tremendous economies of scale/total return and the incredible bump its overall proven, developed reserves could potentially receive if successful. So, the question is will the second drilling program at Kokopelli involve a horizontal or will it involve another multi-well vertical program, or perhaps both?
With at least one HZ drilled at Roan Creek over the next 12-15 months and should the company drill one at Kokopelli, if successful, and if at a fraction of the WPX discovery HZ, these two plays alone could be a game-changer for DEJ
Sentiment: Strong Buy
Harold, Read the 20-f from Nasdaq site under sec filings. You will see the operating agreement with Randall Kenworthy of Bakken Drilling Fund. Also see details on tranche 1 drilling Program and forward drilling plan with tranche 2 and 3 drilling program. Someone needs to help JTF as the agreement is 15 or so pages long.lol
Harold, great write-up. I'm going to speculate and say that it'll be an additional multi-well program with the drilling fund. The ones involved with the CA's they hint at make me think they're the ones that'll be pursuing our HZ's.
I'd be more interested in what's going to happen before June 30th than have those dreams about the next year. Can't wait to see how much cash they have Wednesday after the close. Mom bets the writing will be on the wall. !!! Anyone want to bet?
I would be more interested in seeing where they are in June. The 1st quarter may not amount to much, but the bigger increase in Woodrush production didn't occur until April. I think the 2nd quarter is going to be much better and the cash on hand at the end of the first quarter could be a reflection of them paying down the money due by June 30th anyway. One day you are concerned about dilution, now you are concerned about their cash position, and so on. You have a lot of concerns for a self professed non-shareholder mom. Why so much interest on your behalf?