Well spotted DD. It stands for Geological chance of success not 'cosine'.
Quite complex to discuss on HC, so simply put there r 5 key variables that u focus on (the usual gamut of trap, seal, HC maturity etc). Together with that, u then use a factor depending on how good the seismics are. The product is GCoS or CoS (translates to Risk factor, loosely).
Some of us have been quite bullish abt O2, simply b'coz it flow'd gas 40 yrs back. However this time around they will 'air drill' it & it should flow commercially IMHO.
A 50% GCos is extremely high & means there is a very good chance of encountering gas in the well.
So that 1 TCF of Undiscovered Gas Initially In-Place (UGIIP) with its 50% CoS is good enough for Ooraminna prospect, thats b'coz they know O#1 had gas. And on top of that u need a 60% recovery factor for gas & 35% for oil.
- 2 tcf *50% CoS*60% RecFac *100% CTP's share = 600 bcf recoverable gas. (note 48 bcf = 1ton LNG, if CTP decide to go down that path like the recent BOC-BG Chinchilla deal)
- Multiply that by say 50c/GJ as the initial IGV (ie $300m)
- Divide $300m by shares on issue to work out its Risked value/sh.
Note if the discovery is commercial then the 50% becomes 100%, i.e. derisked & the value/sh will b much more (so work the above by replacing 50% with 100% & shares on issue)
Question is how soon can CTP commercialise Q2 & who's the buyer? It's been sitting in the Desert for Eons!!!
CTP Price at posting:
8.5¢ Sentiment: None Disclosure: Not Held
