Yes Phil,
I remember the 17c, I initially bought @14c pre-Kora. MC and dilution since then of course tell
the real story.
Well well well, and I thought drilling & trying to discover oil was exciting, albeit uncertain. COP
{no pun intended} the current scenario..
WPL ; " We didn't buy the asset, we bought the subsidiary that owns the asset. You can't PE a
company".......Geez, I ain't no lawyer but that's gotta be rich in the extreme. Ok, well, you have
the company and we'll retain the asset, how's that grab ya. Really....
No idea what's going on here really. Were FAR caught napping, missed the pre-empt expiry line
and now are just playing a dangerous game of poker, with a nothing hand. Were they well aware
that PE had started ticking but had no major backer/finance in hand by the time PE expired?
Did they lock in backer/finance AFTER the PE had expired? Are they in fact right that the PE
clock had not even "started" yet? Who knows, all I have is questions. Still, makes for the most
interesting time since the 1st appraisal results at SNE2.
On another note, more to my area of interest, is the recent recoverable portion of oil, @17% rf, as
outlined by Cairn in their half yearly.
17% is indeed a lowish figure in the context of what we know about the parameters thus far of
the known reservoirs within SNE. Sure, I do acknowledge that the upper reservoirs are thin and
we have no connectivity tests over the field as yet and Cairn, as we know, and which I appreciate
and prefer, are conservative to say the least.
In the same vein, take a look at the STOIIP @ August 2016 by Cairn... 2.74BBoo to arrive at recoverable
2C of 473mmboo. I remember back at the IP here in Perth some 15 or so months ago now, where
CN was talking about the possibility of exceeding the then talked about rf of 30%. What will
transpire will transpire of course. Now, IF FAR are using {at this stage} the same rf figure of
17% to arrive at 2C recoverable of 641mmboo, then their estimate of STOIIP stands at 3.775 BBoo.
Which ever way you cut it, 3.775BBoo STOOIP is some amount of oil, WAITING to be recovered.
I also remember at the time of the IP that I hoped FAR were using the low end of say 25-30% rf
to have arrived at their 2C at the time....if I remember correctly, and i'm sure it was revealed, it was
a 30% rf they were working on......the appraisal of the thin upper reservoirs since then, have
probably curtailed the rf used by FAR since then, as it has obviously for CNE.
In short, and at this stage, I would much rather be sitting on this low rf of 17% with a larger
STOIIP, than an unrealistic and over optimistic high rf with less STOIIP. The facts we do
know that would ordinarily lead to a rf of 20-30% in similar reservoirs in other fields are ;
1. Very good porosity 18-26%
2. Gas Cap and clearly defined water table.
3. I would say "high permeability" also..no official figures given, yet CNE did refer generally to
high permeability some time way back. Don't ask me to remember when or where but I did see it.
4. 32 API that is obviously on the lighter and flowable side.
Now also, it has been confirmed by CNE that 1500m horizontal laterals will be used, primarily
on these upper thin reservoir sands. Not sure whether their 17% rf has already taken into account
the upside of this method of drilling.
What we dont know of course is the connectivity between the reservoirs. If that comes up trumps,
and in light of the above, 17% rf is emminently beatable imo. Once again, better to be sitting
on a huge STOIIP @ low rf at this stage. One can always try and improve upon the rf or be pleasantly
surprised to the upside. STOIIP is STOIIP, it's there or it aint. A worse rf than 17% down the track?
Well, connectivity would have to be non-existent, the sands would have to be compartmentalised
like swiss cheese and porosity would have to nose-dive from current stated levels for that to occur
imo.
I would personally bet against a lower rf than 17% and would argue a better figure is achievable..
25% rf would put this field @ 2C of close to 1BBoo if the STOIIP FAR is using is in fact 3.75BBoo
at an rf of 17% for their last update of resources. Would I bet on the outcome of the current dispute
and how it may play out?... Not in this lifetime.
GLTAH
Expand
(20min delay)