Fair call Cosmo, although Kfan in previous posts sums it up for me--poorly executed and he
did raise the point {which I had considered as well} that there is no "loan facility" as such
as I am aware available to CN through FAR.
"Elephant size discoveries" still do not translate to Elephant size commercial quantities of
oil. Therein lies the palpable risk that we are ALL exposed to, until proven otherwise.
Even though I remain confident of our chances on the shelf in particular, it would perhaps be
beneficial {in hindsight} to review the hype & positive slant put out regarding Tullow's discovery
in French Guinea some 4 years ago.
Zaedyus discovery – TLW found 72m of net pay in three sands with all reservoirs filled top to base with oil (no oil water contact). Tullow encountered 39m of net oil pay in the main Zaedyus fan, which was in-line with predrill prognosis, which we assume was in the Turonian interval. This compares to Jubilee where we estimate an average net pay of 50m. TLW expects that the net pay will thicken downdip as the well was drilled on the apex of the fan. The areal extent appears to be around 3x the size of Jubilee – Tullow stated that it was a couple of hundred square kilometres although measuring the prospect size off the TLW map suggests it could be >300sqkm which compares with Jubilee that is 80sqkm. Therefore even if we assume a lower net pay for Zaedyus, we believe that the field could be double the size of Jubilee which is ~800mmboe, versus TLW’s P10 pre-drill estimate for Zaedyus of 700mmboe. We are now carrying Zaedyus as a 1.5Bboe field, with a 75% chance of geological success (still appraisal risk) and an 85% chance of commercialisation (political risk, well deliverability risk).
This extract sounds eerily familiar to our synopsis of our own recent discoveries. Subsequent
appraisals of the above "discovery" failed to produce commercial hydrocarbons. If all promising
discoveries turned out to be commercial we would all be taking out bank-loans prior to the
result being confirmed. I have a considerable amount of my own capital invested in the outcome,
but no bank loans as yet.
GLTAH
FAR Price at posting:
7.3¢ Sentiment: Buy Disclosure: Held
(20min delay)