Hi Norbert,thanks for sharing your thoughts. None of the brokers...

Hi Norbert,

thanks for sharing your thoughts.

None of the brokers have yet come up with much and a couple seem to still misunderstand the situation. There's not much to try to analyse so far, so it's understandable.

Citi have guessed that the find so far represents 30-100 mmbbls and Ivor Reis of Patts suggests 65 mmbbls, the midpoint of Citi's guess. Given that PBR's Piracuca's find of > 550 mmbbls is only 35kms from Kangaroo-1, it seems likely to me that it would be economic to pipe even a 65 mmbbl Roo-1 find to Piracuca. Such a minimum outcome would be worth roughly $1 per KAR share on a NPV basis.

The big unknowns are:
- how realistic is it to hit 200 mmbbls, or even up to the spill max of 350 mmbbls, in the adjacent Eocene structure? If we can extract these volumes, we can have our own recovery system. KAR forecasts $14.40 per bbl NPV at $90 per bbl oil, so 200 mmbbl reserve is worth $2.9 bill or $1.9 bill to KAR NPV, or $9 per share. 350 mmbbls is worth $16 per share.

- how realistic is it to hit hundreds of millions of barrels in the other Brazil prospects? We have Piracuca with massive reserves in the Campanian and Santonian sands but apparently none in Roo-1's Campanian. But both Emu-Cassowary and Bilby are targetting Eocene sands with E-C having 8 zones of interest, including two Santonian at maybe 800 m deeper than Roo-1 depth.

So I can't really answer your question, except to say it seems likely that we have a minimum value addition of $1 per share so far and still could have an extra $10, $20 or even $30 per share if everything went right.

Our friends in Canada are more bullish that we are. Let's see how they react tonight.