Drilling results were not stellar and the stock fell about 25% on the day they announced the results. This is a natural gas company with 2 core areas. On the one they have been having good development success. Drilling very expensive wells, but rates of return seem to be very good. Have grown production up to about 1700 BTUs a day so on a run rate basis, that produces about $25 million of cash flow, so the stock is trading at around 4X cash flow. Market was disappointed on the initial drilling results from another area which was an untested Montne trend where they were pushing the fringe of the boundaries. If it had worked, it could have been very, very exciting. They couldn’t test the wells because of the sour contents. This means they need to retest after breakup by bringing on better equipment. Even if they get a productive rate, the cost to produce sour gas is much more than sweet gas, about 4 times. Cautious on the name as the risk is too high.

Quite impressed with this company. Large land holdings of about 7200 acres in the deep basin. They continue to drill out excellent results out of that play.