Shares of China-focused unconventional gas explorer,
Frack testing will now proceed as originally planned, but the practice will have to wait until the spring or at least until after the Chinese New Year in February. The company’s second well, ZJS6, is progressing well and is currently at a depth of 800 metres with a target depth of 2,320 metres. Wireline logging of the well is scheduled for mid to late January.
Leyshon’s shares have retreated below the 15p level where we first advised buying them. While we haven’t written off the company’s project just yet, we see the company’s cash backing of 10p per share (after taking into account well costs) as a potential support level for the shares. We continue to believe there could be value here but for portfolio purposes, we are selling the remaining half of the shares (we said sell half at 28p before initial drill results came out). At 14p, sell.
Last IC View: Hold, 21p, 28 November 2012