Recently two groups of people were presented with the data collected at SNE and FAN. One group flew business class to London. The other arrived on a tram driven by Warwick.
The first group included some of the world's pre-eminent oil geologists and operators. The second group made their tram-driving leader look like Einstein.
The geologists pored over the data for months, comparing with like structures elsewhere, examining line after line of log wire data, discussing, debating, undertaking scenario analysis and running geological and financial modelling.
Wacca's mob took one look at the pile of paper and adjourned to the pub to down a few pints and have a bet on the dish-lickers.
Weeks later, the companies employing the geologists met again to weigh up the recommendations before them. All faced huge challenges to allocate their scarce capital in the face of the biggest industry downturn in decades. COP had been flat out selling assets and slashing its exploration budget. Cairn faced a double whammy from hungry Indian tax collectors, duster disappointment and a plummeting oil price that threatened to downgrade developing assets into which they had already sunk a fortune. FAR, the unsung geological heroes of the JV, were pretty well at the mercy of their bigger partners. A thumbs down from either and it was pretty well game over.
By this stage Wacca's crew were at Manangatang trots, hoping to win back their shirts on the last.
Back in London, it was agreed: the Senegal data was compelling. The two existing discoveries comprised a commercial certainty and a near cert with massive upside. Four of the eight plays had not even yet been looked at. Wherever they looked at the data, it seemed, there were excellent prospects of even further discoveries. The hands went up, hundreds of millions of dollars were committed and the planning began.
Wacca's whackers were planning, too. Planning to ... planning to ... Oh well, one of them would surely think of something soon.
Now you 'investors' out there: Which of these groups are you backing to make the right call? Come on now, your prosperity depends on your answer!
OOO
FAR Price at posting:
9.7¢ Sentiment: Buy Disclosure: Held
