With the testing under way at Paca2 in the next fews days I...

With the testing under way at Paca2 in the next fews days I thought this could be a good time to look at some of the other fields in the Sergipe-Alagoas Basin that are producing from the members and formations that are about to be tested.
At the start of 2007 Sergipe-Alagoas Basin was producing around 50,000 B/D of oil. In the second quarter of 2007 a new field came on line that is now producing around another 15000 barrels a day but details of this field are very sketchy and the only details that I have is that the JV is between ANP/Silver Marlin.
The Coqueiro Seco Formation / Penedo formation are not as wide spread discoveries as the Barra de Itiuba Formation but the Coqueiro Seco Formation / Penedo formation appear to be good producers when a discovery is made on them. But due to the shallow depths of paca2 it’s hard to make a comparison with other fields in the area and try to predict what the flow rates at Paca2 may be.
Below is a list of oil fields that produce from the 3 formations that are being tested.

But with some of the info that has been released on Paca1 we can start to draw some estimates.
Paca1 is producing from a 15meter pay zone (production area) in the Coqueiro Seco Formation (Morro do Chaves Member). We know that part of this pay zone at paca1 is either damage or has been concreted over during the reentry vase of the drilling program in March 2008. The damaged and concreted over parts are believe to be Aproxamently 6meters, leaving only 9 meters of the pay zone suitable for production. So effectively speaking we are only seeing about 60% of what the flow rates might look like at Paca1. If Paca1 was operating at 100% of capacity, using only percentages we should be seeing a production rate of about 100 b/d.
At Paca2 the Coqueiro Seco Formation (Morro do Chaves Member) is twice the sizes of Paca1 and lies between 306m and 336m making it a pay zone of 30meters. So for the Coqueiro Seco Formation (Morro do Chaves Member) I am just going to use simply maths and double it and make an estimate of 200 b/d from this formation alone.

Based on the info released on the Penedo Formation and the Barra de Itiuba Formation an the fact that these 2 formations are Sandstone reservoir quality and with oil saturation and porosity being higher than expected and the porosity in this area already being described as vuggy, my best guess is that we will see flow rates of around 600 b/d all up over the 3 sections.

Using these best estimates I get a fair value share price using a PEG ratio of $1.12 with a EPS $0.045 using a oil price average of $60 a barrel based on 330 production alone.

I have more info on 330, 430 and silver marlin on my blog for those that are interested
http://wwwaussieoilers-ciggys.blogspot.com/