Morning all and a Happy 2016 to all contributors on the FAR forum. Some great reading this
morning, particularly in relation to those dastardly "thin sands", included, discounted or
otherwise completely left out, whichever may be the case
.
PJ may be getting a bit pedantic but I have certainly been guilty of that over time in relation
to a few points that I couldn't seem to let go of....and this particular one re the thin sands would
certainly qualify as a candidate if ever I saw one. When you have 3 sources of information that
are not exactly co-ordinated, with differing degrees of emphasis placed on certain words and
different bits of critical information released by one party and not even mentioned by another, it
does become overwhelming at times....particularly in relation to some of the "nitty gritty". I don't
think there remains much doubt as to the overall big picture however. The big picture will
hopefully get a lot bigger after the flow test results. I don't put anyone on ignore, that is my
preference and I appreciate all posts. Anyone who takes the time to post should be read, good
or bad. As far as "valuations" are concerned ,at a static point in time, PJ's tables reflect what the
market is currently saying.....although at a 2C of 330mmboo and POO @$37 the market seems to
be running away from your valuation of 0.054cps?? I have my own "valuations" and I am very
happy with 8.3cps at this stage of the cycle, considering where sentiment & POO is at this stage
and the fact that no RESULTS have yet been released to at least CONFIRM what we all think we
have. The way the SP is trending at the moment, my thesis for an overshoot of the SP v your tables
PJ and my own are looking good!!! Short-term its looking good. The market will do as it wishes, however I have always felt better having my own valuation in mind at any point in time v what the
market gives me. Each to their own. Suffice to say, when the SP dipped below 7cps AGAIN, I at
least thought it fair value to add some more, AGAIN
. I tend to agree with your analogy PJ of
FAR perhaps becoming a "holding company" for the commodity OIL.....at least for the next 6-9
months, providing of course that we are in fact holding a commercial asset. I see oil struggling
big time into the 1st half of next year { a thesis that I have held for 12-18 months now at least}. If
that be the case, then we may have the absurd but opportunistic situation of buying shares in FAR
at similar or even lower prices than today AFTER having CONFIRMED a commercial asset. It is
not what everyone would want to hear I'm sure....I would prefer of course that the SP spikes to say
10-12c after SNE2 and POO just continues to climb all the way to June 2016 with the SP at say
20-25cps+ PRE T/O. However, should the above scenario play out I would be happy to consider
FAR as a holding company for oil and would add to my position again. Anyway, enough of
speculation, forward plans and "valuations". Apologies for rambling.
Whisky, once again,I seem to have missed or forgotten that in all the reams of differing
information released at different times by different parties over the past 12 months. Mobility
data is mentioned here for SNE which of course relates entirely to permeability. Even though
pressure data/regimes and porosity may be good, there is still no guarantee that the
moveability or permeability of said oil will be satisfactory, although of course, with the other
parameters confirmed the odds of high permeability is increased. It is nice to see that the
mobility data confirms the other parameters. Of course again, RECOVERABLE 2C of 330
would not have been entertained if permeability didn't come up to scratch....still would
have liked some MD's though from a technical point of view. I have tried for the life of me to
retrieve the source for the BEER formation and the almost throw away reference to permeability
in that said formation. However, it was mentioned that there was high permeability there also,
even though no 2C was given or any por/sf figures etc. I think it safe to assume that that no
"tight" formations have been encountered yet in the wells we have drilled. The geology, anoxic
climate conditions at the time etc , together with available data gathered over the last 12 months
trend strongly to confirming the models postulated!
Aqua, nice posts this morning mate, particularly in relation to OOO's AGM reporting. I went
back over my own reporting of the IP here in Perth in May 2015 with the emphasis on those
damn "thin sands". I will try not to offer my own interpretations, slant or predictions of why or
how they may add to overall resource numbers, other than to regurgitate what was said back
then and what has transpired since.
It relates to recovery factors being used, the "flat egg" theory, as well as the thin sands....all
3 of which are hoped to ADD to the initial pre-estimates of 2C 330mmboo for the SNE reservoir.
I had opined previously that perhaps a RF of 25-30% was being applied to SNE in their recoverable
estimate of 330m, in which about 1bboo would have to be in place. CN said they were applying a RF
of 30%, in which case I said that the STOIIP would have to be therefore about 1.1bboo. "Yes, that's
about correct....at this stage" she said. Now, as I see it, the overall recoverable oil can be increased
either by the "addition" of further thin sands not included OR an increase in the deliverability of
CURRENT thin sands that have already been included OR a combination of both OR failing both
of these options and INCREASE in STOIIP with the RF remaining the same at 30% or higher.
"Thin Sands" ;
"The 36m net oil pay from SNE is contained in the thicker sands". That was how I recorded it
right or wrong, no mention of any thin sands being incorporated in the 36m net. There are a
" lot more interbedded thin sands not included in the current map/schematic. The JV believes
the numbers thus far for SNE are conservative..the thin sands and how they "work" is important.
These thin sands above the OWC will become our predominate producer as we step out further
EAST...read SNE3. A few points ;
1. These thin sands we are analysing now {back in May 2015} could increase volumetrics by 30%.
A recent remark some months back alluded to by Whisky and others states something along the lines
that recent well analysis of these thin sands have produced excellent reservoir quality...TICK.
2. It was mentioned that COP have had great success in producing from thin sands as little as
10cm thick in some of their reservoirs. Well, with our parameters around por/perm/rf etc, i see
little chance of this being any different with this reservoir....or at least the odds would appear to
be in our favour in light of 1 above.
3. A 30% increase in volumetrics on the deliverability of these thin sands would see 2C increased
to 430mmboo alone.
Flat Egg Theory ;
Lower Bell will be used to test this theory. The theory being that the current seismic seems to have
been "pushed down" over the top of SNE as the canyons on the sea floor may have had the possible
effect of compressing the current seismic. They hope that with reprocessed seismic and depth
conversion that the area above SNE will "pop" out or expand from the current "flat egg" picture
that is being represented. ie. The SNE reservoir may be considerably deepened. There may be
more than 1.1bbooip. Let's face it, at a P10 of 670mmboo, assuming a RF of 30%, there is a
10% chance that we have over 2bboiip at SNE. I suppose you can massage these preliminary
numbers any way you wish but Lower Bellatrix in particular should get a good handle on the
ACTUAL STOIIP. If you assume that the flat egg theory is proved correct after Lower Bell then
the P10 of 670mmboo recoverable could be a P50 chance. This together with the 30% increase
in volumetrics from the thin sands could see SNE alone deliver close to 100mmboo NET to
FAR from SNE alone. With comments from CN that RF could increase to 40-50% from the
currently used 30%, should ALL the stars align, it is not hard to see SNE alone deliver greater
than 100-150mmboo NET to FAR. We await the numbers.............
Apart from imminent results from SNE2, the real story lies with SNE3, Lower Bell as to the
real extent and deliverability of SNE. A giant in itself that could deliver the above mentioned
numbers in TIME to FAR......the value put on these numbers will of course be dependent on
the market and the POO at the time. At $7.50 IGV for 150mmboo of 1C/2P would give 30cps
for SNE alone. A lot of data, sentiment and POO of course over time would determine the
value put on these numbers if they were to occur. The potential indeed.........
So, once again, we have more than a few strings in our bow to potentially realise that P10
of 670mmboo. The next 6 months should reveal the full extent of the prize.
To the more immediate results of SNE2....... of which of course the above analysis
would pale into absurdity and delusional thinking on a grand scale if results were not
up to scratch. Assuming pre-drill expectations have in fact been met as reported. We have
the highest part of the oil column, together with maximum net pay, what would constitute
a poor, average and good result in terms of a flow test, assuming we are at the guts of the
structure, under natural reservoir conditions????
Will this give us a ROUGH indication of the number of producing wells required over the
field {assuming SNE3 and Lower Bell deliver later} at this early juncture? I realise that more
wells would perhaps be required in the thinner sand reservoir sections as well as more gas/water
injection wells in this part of the structure v SNE1,2, however SNE2 should give us a good handle
on the deliverability on the "bulkier sands" of the structure.
If you want a field to eventually deliver 100 000 bopd then I would assume from a layman's
point of view that perhaps a figure of around 5-10 000 bopd would be considered a great result
from SNE2? That is under natural reservoir conditions with no gas/water injection. I would
think with a result like that you may be looking at only 10 producing wells with as many water/
gas injection wells to deliver 100 000 bopd over an extended period, before natural decline set in.
Also, I think that the overall flow test number reported will be one number only. It will not
be broken down into different flows at different choke levels. I know you are taking a break Ya,
but perhaps you may like to comment on the above scenario? Not trying to play guessing games
here as to actual flow test numbers, but more of a feel as to what would constitute a poor, average
or good result for SNE2 going forward to SNE3, Lower Bell.
Ok guys, sorry for the ramble. Been a while since I posted and wanted to get it all "out there".
Not long to wait now.......he says again.
GLTAH
(20min delay)