It's been a couple of weeks since my last update, so there are several items I'd like to cover. First, there has been quite a bit of selling in ADNY stock recently. I want to be clear that none of these sales were done by management or other insiders. There are a lot of reasons that someone might get out of a position other than fundamentals around the stock. I can't speak for them, but our plans are to continue to develop the E&P business and otherwise maximize shareholder value through our other assets.
Which brings me to the sale of our drilling rig. For those not familiar with oil & gas drilling, a quick primer on drilling economics is in order. Drilling rigs are designed and rated for specific depths. The deeper the rating, the larger the rig. Larger rigs consume more fuel and require larger crews to operate. The thing to understand is that whether a rig is drilling at 500' or 5,000', it still takes the same crew and similar volumes of fuel. So a rig designed for 5,000' costs significantly more to operate than one designed for 2,000'. This makes it much more expensive to drill a shallow well with a bigger rig than with a rig rated for a depth closer to the planned depth of the well. The wells that we are drilling on our current leases were too shallow to efficiently drill with the rig we had, so when the opportunity arose to sell the rig for a good price, we did so.
Look for an acceleration of the operational tempo through the summer. Thank you for your confidence in our team and stay tuned - things are getting exciting now!
Best,
-Shannon
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