As we have seen the ability of Paul Basinski and the 88E team to hit targets with both the play modelling and exploration has been nothing short of astounding.
Imo this directly translates to market confidence in achieving :
* Future internal exploration targets : unconventional/conventional
Be they - Sweet spot spread determination over original/new acreage
- Best initial production profile targets/wells
- Potential conventional reservoir targets
* Near to mid-term play development
- Ice 2H
- 2D seismic data processing/interpretation
* Farmee agreement/s
* Longer term play development including :
- supply chain logistics
- Infrastructure est
WHY would I labour this point ?
Much of what we see at the speculative end of the market is about the
perception of what the market thinks the company can achieve.
Imo the initial stages of Icewine development have not only been about proving up potential at Ice 1, which is no doubt a large component of the targets, but also building market confidence in what the company can actually achieve and
how the companies future judgement of WHAT THEY CAN ACHIEVE, both in self set play targets and managing future play variables, is .
Given the success to date there is nothing to say that this TEAM can not achieve success in the forward aims and goals that they have set themselves and imo again I think even the 88E/Bex JV see it as crucial in this current depressed world economy and subdued energy market, to kick as many goals as they can at Icewine.
In the light of the above, its interesting to peruse previous recent presentations and theres a few things that really stick out, IF the company can justify whats presented.
In the Sept 2015 presentation :
http://88energy.com/wp-content/uploads/2014/12/Project-Icewine-Presentation-September-2015.pdf
we have these statements made :
• The more oil that can be accessed by a well bore – the better the potential well deliverability
• Internal assessment of HRZ shale productivity across the Icewine leasehold estimates greater than 1.4b barrels of recoverable oil
• NPV10: US$80 = US$2.7b / US$65 = US$1.3b (internal est.)
• Full field break even US$52 (internal est.)
• Exceptional porosity in HRZ - consequence of unique geologic history
• >13% porosity indicated on log data
• Exceeds the ‘sweetspot’ average in all other US shale plays
• As a result, resource concentration is estimated to be >50% better than in the Eagle Ford sweet spot
• High pressure reservoir with the right gas-oil ratio (GOR) results in lower viscosity (super critical phase) and thus higher deliverability – ‘sweetspot vapour phase’ (Edman, 2012)
• Proprietary modelling indicates resource concentration has a strong correlation to flow rate
Full Field Success Case Development #
Area (Acres) / 98
Gross Wells / 182
Well Spacing (Acres) / 80
EUR* per well (mmbbl) / 1.175
Total EUR (mmbbl) / 1,410
Important to note these are pre Ice 1 results and acreage expansion numbers/ Icewine play development. But its the last number in this table that's impressive.
However this obviously does not concur with the last DeMac IRR which put these numbers at around 200mbbls if memory serves.
Another thing to note is that it may well be that the well parameters may significantly change given the above expectation results at Ice 1 but that these parameters were already set pretty high !!!
SO WHERE DO WE PUT OUR TRUST ???
Isnt it about kicking goals ?
Can the company continue to kick those goals given the asset/s they have on this acreage ?
Imo the current market performance and resultant market capitalization says volumes for the above.
d.
(20min delay)