Yeager will be presenting it by video link, I presume he's too busy to come to Aust whilst looking at all the properties that have come onto the market since the bank redeterminations.
Blue Ridge, probably not the best time to be selling assets, however if the money can be deployed to better uses - why not.
They still don't disclose the location of the EF leases. They say it's in the volatile oil/condensate window with expected 70-80% liquids. Most maps of the Eagle Ford show 3 windows: Oil (black), volatile oil/condensate/wet gas, and dry gas. The map in the presentation seems to have divided the "oil" window into Oil & Volatile oil, with part of the oil window shown as grey, yet the cross section is based on a line drawn in the yellow section (they label condensate). A bit confusing, obviously the 3 windows aren't clear cut zones, however the 70-80% liquids is the important bit.
What is also important is how far East or West the leases are, as the depths of the shale & the thichness vary, which impacts the economics. My first thoughts were that further north into the oil zone would be a better location, with further research it would seem the volatile oil parts are also considered a sweet spot. These parts produce light oil & the reservoir has enough energy to not require artificial lift. Volatile oil has a higher gas charge than black oil making it flow into the well bore more freely.
As carpenter mentioned, 50,000 barrels a day in 5-6 years time, $700m value at todays prices, what if oil returns to it's norm around double todays prices? or more? This is why I have always maintained this is a long term investment. Remember too this is just a small project & they haven't even started yet or used the $500m facility. It wont take people long to realise the value this management team can create.
FDM Price at posting:
6.2¢ Sentiment: Buy Disclosure: Held
