I called Peter Strickland today in an attempt to increase some understanding of the company, its prospects and the thinking.
Let me start by saying he is a very professional and easy to talk to. this is what asked and answers (not verbatim as i was taking notes) that I got. Nothing naturally was confidential so I will outline the facts here.
1. I asked what Belait target had 9 million barrels for first well were old presentations had 1-2 million. answer - old presentation was based on 2D seismic, 3D seismic has shown bigger structures. He estimates a P%) level of about 4 million barrels per target. That's big for Taps shares on issue 2. I asked how they define risk when they define low , moderate etc (belait is low risk) he said low risk is between 33-50% chance of success. Rig is locked in and some of the mobilisation costs have already been paid for. 3. I asked about the Phillipines block and Exxon info released to market. he said the majors and specifically exxon have a tendency of not to release too much info until they have got to development stage. Due to their huge size, these finds and that material so their disclosure obligations are a lot lower. Based on the two wells he believes the are has alot of potential
4. Tap is in farm down discussions for Zola and Phillipines, he believes may farm down of 1 possibly 2 within 2 months. He was clear to point out this was not a done deal but that he was confident
5 I asked about WA351 and timing. he explained that JV need to relinquish part of the block, so BHP are going through the process of surgically removing all the areas they don't want and keeping the good prospects. he really likes this block and he wont be famring down, it is a relatively shallow area and has a very high chance of success above 50%. He said Hess have made 9/11 discoveries and they are drilling another 4 wells. Like Exxon Hess haven't revealed too much. he met with Hess exploration manager but was not given any data on prospect size
6 Bass Basin permit, Origin's recent discovery at Rochopper was very encouraging as what was meant to be a gas field has also found oil. Oil didn't flow due to depth of well however Taps well will only be 1500 meters under the sea floor and the shallower the well normally the better the reservoir quality. there was another oil find near by, didn't get details. this well is also firm for 3rd quarter
7 Harriet JV targeting 10 million barrels - 3rd quarter, he mentioned the field was discovered in 86 and was meant to produce for 5 years, and they keep finding oil. So my take is we are likely to have some reserve additions there, maybe 1-2 years of production
8 I asked about whether he would consider a Capital raising in the future to drill more prospects. He said not necessary as their cash flow this year will be above their entire spend. He said the aim is to increase the SP so they are keen to restrict shares on issue until they have a discovery that needs development capital
Finally he said company is in a very health position with really good propects - that we already know
TAP Price at posting:
$1.00 Sentiment: Buy Disclosure: Held
