We now approach the contingent well phase of the current program and its bound to raise plenty of comment on the FAR forum.
The very name tells you they are contingent on what has gone on before and whats needs to be done going forward, so are being done on a well by well basis, I think Ooo has mentioned the JV are making decisions around the fourth well and possibly others most likely this week...
The take away from Ooo's conversations are two fold , one regarding loss of momentum and the other around the huge volume of data plus new 3D coming that needs to be waded through to make decisions on future wells. At some stage they will need to take a break, have a cup of tea and decide how best to move forward while digesting the data they have...there is no point in gathering data unless you are going to use it to help make future drilling decisions..
Some of the decisions or factors will be..
As mentioned use the data to advantage.
Making use of the avaliability and proximity of the ORA.
Taking advantage of slashed drilling costs.
The oil price.
Is SNE big enough to proceed with a phased program on SNE alone.
Do they stick with the original plan of a 3 year evaluation of the entire leases.
Do they do both at the same time.
Do they need anymore appraisal wells to plan for phased program begining at the heart of SNE.
What effect does this have on FAR.
loss of Momentum, certainly a loss of drilling momentum but news would still be coming in.Although drilling may stop for a while, increased resources will continue from SNE 3 and likely BELL 1 also a chance of reserves..
3D news on the JV and also DJ leases and futher down the track decisions on DJ.plus a possible DOC...
Cash requirements, a break in drilling means a break on drilling expenditure so time to see what we have and look at options, we still have to fund what remains of the contingent program regardless.
My preference at this stage would be to drill two more appraisal wells in SNE or one in SNE and one exploration well in Sirius, then sit back and see what the JV and the data come up with. Those two wells would very likely be enough to get a DOC on SNE IMO and would fit in with CN,s thoughts on a possible DOC in the third quarter ...
As for FAN, for me its a project to look at later and instead focus on the upper shelf, it still carries considerable risk as to the quality of the reservior in other parts of the field and due to its more complex nature and different types of oil may not stack up in the desire for projects that can perform in a low oil price enviroment , so happy to avoid that possible risk in the meantime...
Anyway just some radom thoughts as we rapidly approach the end of the firm 3 well program..
Cheers Whisky
(20min delay)