I am by no means a shale gas expert however, I was under the impression that Dart Energy recently paid $42m for OGIP of ~4tcf in the UK.
Assuming Lucas' internal estimate of 200tcf is correct, on a comparative basis this values the Bowland shale at >$2b.
Blind Freddy knows there is a large amount of political risk surrounding fraccing and shale gas extraction in Europe. IMO the UK government cannot afford to place a moratorium on shale gas fraccing as it needs the resources, the taxes flowing from said resources as well as the jobs and wealth creation.
It should also be noted that that Bowland is not the only jewel in the Cuadrilla crown. It holds licenses in the Netherlands, Poland and Hungary.
Hungary is already producing at Ba-1X and the Hungarian gov is a partner which hugely de-risks the play.
I disgree strongly that big money is "years off". IMO it is highly unlikely that AJL/ Cuadrilla will be a producer of gas in Bowland. They will true up the resources (OGIP, flow rates etc) and pass it onto a major for a sizeable ROI.
Lets not forget the impressive trackrecord that management and Campbell have for delivering on their investments:
Gloucester Basin invested $26.4 sold for $259 (IRR 112%)
ATP651 invested 5.1 sold for 98.6 (IRR 148%)
This is my 2cents.
AJL Price at posting:
$1.16 Sentiment: LT Buy Disclosure: Held
