Any oil show is great news. This is the type of thing that was totally missing from the previous campaign, apart from when some one spilt some engine in the sample.
The Stuart Range formation is the shale they drilled in Arck #1. But in Arck #1 is was a little under done. The well has found the same formation, only deeper, and it appears to have been cooked to the correct temp, thus the oil show/florescence. Out of all the targets they were aiming for, this was the most likely, and and certainly give confidence that they are finally on the correct path. Out of all the massive resource estimates that were given, ranging up to 200 billion barrels, less than 10 billion barrels was given to the Stuart range formation. Just to put things into perspective. Still a lot of oil, but it is Shale Oil, and they will need to be able to unlock it with the correct frac procedure.
For the record, this is not conventional oil, that would need to be in sandstone or limestone, and held in a trap.
As for prognosis depths. It is about 80 m high and the Stuart Range is about 40m less thick, but at least it is the ball park. As I have said before the Stuart Range has bee the most reliable, and it is great to see oil shows, now lets see if they can continue on that path, and find some shows in the Boothanna, and the biggest prize yet the area they know the least about, is the Pre Permian. That will be the clincher.
This result has partly de-risked the project already, If it can be repeated in the Pre-Permian, we may just get a few knocks on the door?
I probably should change my sentiment to a short term buy, as surely it should go for a run. I will wait for the latter results for longer term changes.
LNC Price at posting:
99.5¢ Sentiment: Hold Disclosure: Held
