General Thoughts, page-3970

Soon we will know more about the current prices of new discovered oil fields in the Oranje Basin, which can be used for PCL when the Saturn Turbidite is full with oil up to the spill point.



Courtesy of @TommyDeepwater on X$XOM $CVX $SHEL $GALP.PL $TTE $BP $SEI.V World's Largest Oil Discovery in >10 Years is Up for Sale (1) As XOM and CVX battle in international courts over the right to buy $HES 30% interest in Stabroek Block (Guyana), a ~40% interest in 9,890 sq km offshore block in Namibia (PEL 83) that produced the world’s largest oil discovery in >10 years is up for sale. Galp Energia’s first two exploration wells in PEL 83 produced a >10B boe discovery, Mopane. Galp is only a >$3B EBITDA company. It is too small to fund development of its 80% interest in PEL 83 and is looking for a larger partner to fund its development. While future PEL 83 development costs will require tens of billions of USD, these are >20% IRR investments at Brent $70/bbl. PEL 83 is one of the few scalable oil projects in the world, and unlike Stabroek Block, it does not have an angry neighbor (Venezuela) claiming it. There should be numerous bidders on PEL 83 and the following is only SPECULATION of whom they will be. (2) Before any additional discoveries, the Mopane discovery likely translates to 350k-400k bpd by the early 2030's, comparable to Diamondback Energy’s $FANG 357k liquids production in 2023 (current $40.7B Ent Value). Galp has confirmed plans to drill 4 new exploration and appraisal wells around its world-class Mopane discovery. Considering the additional 6 identified prospects north of Mopane, future production of 600k-800k bpd is within reason. (3) As Exxon and Chevron battle over rights to Stabroek Block in Guyana, the two are also likely bidders for PEL 83 given their excellent financial resources, deepwater experience and strong balance sheets. Chevron will begin drilling exploration wells in PEL 90 (adjacent to PEL 83) in 4Q24/1Q25. Exxon’s balance sheet is underleveraged and could easily be used to fund both Guyana and Namibia oil projects. Shell’s block in Namibia is also adjacent to PEL 83 and is likely headed toward development after its discoveries. Shell is experienced in deepwater, has financial resources and also curiously drilled the Cullinan-1 well in 2023, within very close proximity of Galp’s 80% of PEL 83. TotalEnergies has a large development ahead of it in Namibia following its Venus and Mangetti discoveries, in addition to prospects in South Africa it will begin exploring in 2025. Also considering Total’s Suriname, Nigeria, Angola and LNG project pipeline, the French IOC likely already has a full menu of capital projects. Angola-based Azule Energy (BP and Eni JV) could be an interested party after announcing a farm-out with Rhino Resources in Namibia shortly after the Mopane discovery. BP is potentially looking to replace reserves it lost via its Rosneft write-down in 2022. Other potential bidders include Equinor, Petrobras and CNOOC. (4) A potential PEL 83 sale would likely be a 2025 event, as Galp and Chevron drill more exploration wells in late 2024 and Namibia’s general election is in November. Namibia’s state-oil company, NAMCOR, will likely retain its 10% interest. Custos Energy also owns 10% (Sintana owns 49% of Custos). H/T to Sintana for their investor presentations.