Malcy's Update

Cairn/Far

The SNE-4 well offshore Senegal has come in extremely well, a gross oil column of 100m and 108m of continuous core taken across the oil bearing reservoir interval with 100% recovery is exceptional and confirms all the findings of the previous wells. This appraisal was at the eastern extent of the field and confirms the upper reservoir sands of similar quality to elsewhere in the field. The well was drilled 5km to the east and down dip of SNE-3 and therefore confirms the field size which will continue to grow, they are setting gauges to allow progress on continuity which is most important. It seems that the reservoir model developed by Far has proved to be exceptionally accurate and gives them the edge when considering commerciality.

Whatever the operator says at present I am convinced that they will declare commerciality sooner rather than later, after all, as mentioned yesterday it looks like COP are soft selling all their exploration activities at the moment. Declaring commerciality would of course change its categorisation and I understand further complicate matters by transferring the operatorship to COP but they are still selling as we speak. I notice that a publication yesterday suggested that Total may be the bidder for this which would make sense not least due to colonial history and if were true I suspect that they would not be interested in only the 35% on offer from COP…Selling a dream asset like this smacks as defining not only the bottom of the market but the insensitivity of an oil major many miles away, time to take advantage of the folk from Bartlesville, Oklahoma…