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Goodrich Petroleum Part 2

In general, I try not to return to ideas that I have written about before. It strikes me as a bit lazy; I mean I have already done the research that prompted the initial call and you, dear reader, are probably looking for new ideas, not old ones. Sometimes, though, a situation changes, or appears to, and a previously talked about stock becomes an opportunity all over again.

Such is the case with Goodrich Petroleum (GDP). I first talked about Goodrich in a piece you received in the April 4th edition of Oil & Energy Insider. At that time I identified the stock as one of the best plays on the continuing shale oil boom. GDP closed that day at $17.11 and then went on a tear, peaking at $29.60 in June.
 

If you took my advice then, I am sure you were quite pleased with a 67 percent profit in 2 months, but if you did and are still holding on I am equally sure that recent news and subsequent price action has you worried…don’t be. In fact, now may be a good time to add to that position and for those that missed the chance to get in on the action.

The news that caused the recent drop was Goodrich’s announcements that their last two completed wells, Nunnery 12-1H-1 and Beech Grove showed “disappointing” first day production of 815 and 740 Barrels of Oil Equivalent per day (BOE/d). For comparison, the two wells completed before that, Blades 33 H-1 and Lewis 30-19H-1 yielded around 1200 and 1450 BOE/d. I understand that…




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