You have some thoughts similiar to mine, however I am not so pessimistic on the gas. 1 Pavo. I too thought when it was discovered (with low gas) that it might have made sense to produce it first, reducing the size and/or delaying the expensive gas handling for Dorado. Given that they have not rushed to appraise Pavo they obviously don’t see it like that, probably because of very good information or understanding that we don’t have. 2 Dorado gas. Firstly non-emergency flaring of serious amounts of gas has been forbidden in all half civilised places for 30 or more years. My understanding is that gas reinjection is necessary to get the high liquids recovery from the reservoir that they are counting on, therefore there is no way around expensive gas handling at Dorado. Given so much gas handling expense is required from day 1 I am inclined to expect to see value in early gas sales (albeit some must be reinjected). 3 Gas pipeline. Yes this is a head scratcher for me too. I struggle to see that a 400 km pipeline to VI would make sense. Maybe they are looking at another option as well. Sometimes unattractive options are persued through study phases in pursuit of a deal on an alternative option with another parties infrastructure.
I am reasonable comfortable that we appear to have a rational pragmatic partner in STO with a relatively nearterm market for the gas. I can’t see there not being substantial value for us in the gas.
EL
CVN Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
(20min delay)