Although I am not the best at conveying my investment theories and ideas (due diligence) on paper for everyone to read, (they do exist, but they rotate through my head too quickly to write down in time and in a coordinated way), one thing I do excel in is finding information, which then can be easily saved, referenced and shared. That is what I have done below, shared information about analogous sister projects to KTJ (literally connected to the same PSCs at one point) so that everyone can read at their own pace, and understand why KTJ will almost certainly go into production and generate significant cashflows.
You’ll find that KTJ sits squarely in the middle of both analogous projects (literally and figuratively), sharing water depth with one, resource type and size with the other, capital expenditure between the two, oil grade, production rate, discovery timeline, players involved etc. There’s a couple of easy things we can do with this information, we can make a comparison between these projects and our own and then use that to justify an expected outcome for KTJ. We can also look at the statements FDR make about project (timelines, supportive government, production rates etc) and see if those things are realistic and have happened historically with the other projects. Spoiler: they have, a quick example would be the Kitan timeline of Acquisition, Exploration, Development and Production only taking 3.7 years, that is incredibly quick and it justifies FDR’s production timeline, i.e. it’s a real world example, right next door to us, utilising the same development concept, same number of wells and possibly even the same FPSO (Glas Dowr).
Anyway, if you are interested or invested in the Timor Leste project, read on.
KTJ Project
License: PSC-19-11
Operator: Finder
Contingent Resources: 22Mmbbls (Project 2C Gross)
Reserves: 16Mmbbls (Project) (Expected)
Year Discovered: 1996+
Location: Bonaparte Basin | Timor Sea | 550km NW of Darwin
Acquisition Cost: US$0.38bbl (Cost per Bbl. 2C Resource @Fid)
Equity: FDR 76% | Timor Gap 24%
Royalty: 10% (5% Timor Leste | 5% ENI/Inpex)
Capital Expenditure: US$270M (Expected)
Water Depth: 400m
Oil Grade: 53d API
Peak Production Rate: 25,000 – 40,000bopd (Expected)
Total Field Production: 16,000,000 Barrels (expected, Source: Research Report)
Production Revenues: US$1.2B (expected)
Field Life: 10 years
Notable Events: Alliance Agreement and Fast Tracked FEED with Schlumberger. FDR production forecast estimate equals to AU$1B revenues in first 18 months. Bluewater Glas Dowr (See Kitan info below) offering vessel and engineering to FDR
https://wcsecure.weblink.com.au/pdf/FDR/02955354.pdf
Analogous Projects
Buffalo Oil Project (1999)
License: WA-260-P
Operator: BHP
Contingent Resources: N/A
Probable Reserves (): 20Mmbbl
Year Discovered: 1996
Location: Timor Sea | 560km NW Darwin
Acquisition Cost: Unknown/NA
Equity: BHP 50% | Canadian Occidental 50%
Royalty: Unknown. Presumed 5% to Timor Leste
Capital Expenditure: US$88M in 1999 (US$170M in 2025 terms)
Water Depth: 30m Wells, FPSO 300m
Development Wells: 2
Oil Grade: 53d API, 120 GOR
Peak Production Rate: Between 40,000 - 50,000bopd (depending on source)
Total Field Production : 12,495,863 Barrels
Production Revenues: US$374M (US$668M in 2025 terms)
Field Life: 3 Years
Notable Events: BHP agrees to sell half its equity for US$38M (Adjusted) in 2001 after majority of field production expended. Schlumberger part of engineering and construction management team for topsides
https://www.offshore-technology.com/projects/buffalo-field-timor-sea/?cf-view
https://www.laohamutuk.org/OilWeb/OTD_FS/Buffalo.htm
https://www.laohamutuk.org/Oil/Project/Buffalo/CarnarvonBuffPresApr2018.pdf
https://www.tandfonline.com/doi/pdf/10.1071/ASEG2001ab099
https://gulfnews.com/business/energy/bhp-sells-buffalo-stake-to-interoil-1.435811
https://www.tandfonline.com/doi/pdf/10.1071/ASEG2001ab099
Kitan Oil Project (2011)
License: PSC JPDA 06-105
Operator: ENI (40%)
Contingent Resources:
Probable Reserves ():
Year Discovered: 2008
Location: Timor Sea | 550km NW Darwin (JPDA)
Acquisition Cost: Unknown
Equity: ENI 40% | Inpex 35% | Talisman 25%
Royalty: 5% Timor Leste
Capital Expenditure: US$1B Est
Water Depth: 350m
Development Wells: 3
Oil Grade: 53d API, 120 GOR
Peak Production Rate: 45,000bopd
Total Field Production: 26,906,980 Barrels (Calculated from ANP Annual Reports)
Production Revenues: >US$2.7B
Field Life: 4 Years
Notable Events:September 2007 Woodside sold its 40% share in the contract to the Italian company Eni for USD$23 million (US$44M), and Eni took over as operator. Bluewater Glas Dowr FPSO Engineered for Gas/Liquids and leased for project. Full Acquisition – Discovery – Development – Production time of 3.5 years.
https://www.offshore-technology.com/projects/kitanoilfield/?cf-view
https://www.laohamutuk.org/Oil/Project/Kitan/10EniKitan.htm
https://www.laohamutuk.org/Oil/Project/Kitan/EISOct10/EniKitanWebpage.pdf
https://www.inpex.com/english/news/english/news/assets/pdf/e20111011.pdf
https://www.publish.csiro.au/ep/pdf/AJ12050(Notable similarities to KTJ)
https://timor-leste.gov.tl/?p=2746&print=1&lang=en
https://www.eni.com/assets/documents/eni_australia_2016_eng_ese_web_pagine_singole.pdf
https://www.youtube.com/watch?v=MkQ9u20jE4I
https://www.laohamutuk.org/Oil/PSCs/ANP/ANPAR2011En.pdf
https://www.laohamutuk.org/Oil/PSCs/ANP/ANPAR2012en.pdf
https://www.anp.tl/wp-content/uploads/2022/08/FINAL-Annual-Report-2013-ENGLISH.pdf
https://www.anp.tl/wp-content/uploads/2022/08/Annual-Report-2014-rev-English.pdf
https://www.anp.tl/wp-content/uploads/2022/08/RO-Annual-Report-2015-ENGLISH-FINAL.pdf
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