OOO
Beautifully set out old boy. Some comments as per your invitation ;
SNE on all preliminary parameters appears to be a beautiful, straightforward reservoir. Textbook
being the comment from CNE's chief geo. A gas cap overlying an oil leg with good water pressure
from below, porosity at a beautiful 24% with a high oil saturation figure and excellent, consistent
pressure regimes--textbook indeed.
The Thinner Sands ;
At the Perth IP, CN hoped that these sands could possibly add 30% to the existing 2C of 330mmboo.
COP has had great success in recovering oil from sands of 10cm or less in some of their reservoirs.
We are JV'd with the best in the business. I note from the last Q that ;
This includes thin bed reservoir sands that,
recent detailed post well analysis has indicated encouraging reservoir characteristics.
Well, no real need to put out that statement but I'm thankful for it. Appears at least to be on track
to DELIVER. Imo, there will be NO upgrade of current resource pre-drill. The drill bit will have
to prove those thinner sands, amongst other estimates also.
Bellatrix ;
2 for the price of one. The ability to prove the "flat egg" theory and widen the SNE reservoir
towards 3C of 670mmboo and maybe even beyond, as well as hopefully proving a "new play"
within the Cenomanian reservoir v SNE, Sirius & Soleil {Sandstone reservoirs}. If proven this
will really ignite the SP as the remaining shelf prospects will be more in the realms of reality
rather than hope. I fully concur with your reasoning re ; first 2 appraisal wells very low risk,
so why not roll the dice on this exploratory well with 2x the potential. CNE rates Bellatrix
around the 80% COS mark {which in my conservative view is quite mind blowing from such
an experienced operator} v FAR's estimate of 50 odd %. So, no doubt, CNE would have argued
strongly about this being the first exploratory well.
FAN/BEER ;
A 500m oil column. I know, I know, complex with many intervals of API. But that's 500m of
oil with no identified OWC as yet. Those Turonian source rocks have been analysed and the data
reveals prolific and mature source rocks, no doubt with high TOC levels. 500m oil column may
very well be the first of many down there in the deep. I have no doubt they have spewed out
billions of barrels of oil. I remain confident in the traps both at this level and on the shelf to capture
a good deal of it. Source Rocks being the first step of course in defining a World class oil field.
FAR SP ;
Yes, disappointing but not unexpected. Not much news, POO, probable delay in spud by a month,
faltering world economy and markets etc etc etc. However, for those committed, 6c or possibly in
the 5's, provides in my view, an outstanding opportunity some 2 months out from spud,
REGARDLESS of the bloody POO. Each to their own, but I bought another parcel @6.4c today,
with further orders in the queue down to 5.5c.
THE FUTURE ;
I can only hope the POO {Brent}is around the $50 mark somewhere when we appraise the field.
I doubt very much it will be higher than the 50's. I also doubt very much it can get into the 30's
within 2 months. Regardless, we have no control over it. My general belief that has held since
the GFC is that this whole stinking edifice of a world "economy" would come crashing down
under the weight of manipulation, money printing, etc etc. It has taken a lot longer to implode
than I predicted {such is the power of the money men at central banks and a command controlled
Chinese economy}. However, there are not many chairs left in this musical game, and not many
{if any} bullets left to fire. I trust that the charade can at least be kept going another 6 or so months
until we complete our 3 well A&E program. POO @ $50 or greater, a successful A&E program
that delivers about 60-70mmboo net to FAR of 1C/2P/3P resources and a buyout that can at
least reflect said results and the future "potential" of a de-risked new oil province. Of course, a
buyout under the above scenario will definitely be greater than the current SP of 6.4c
.
A shame really that the POO and world economy is where it is, particularly if we achieve great
results over the coming months. I would have been quite happy to keep on holding and
investing in FAR for some further years into the future as we further de-risked and built up
even greater value. Alas, if things pan out as a lot, including me envisage, then we may have
a stranded asset, or be forced to sell out at a price way below the fields potential.
Still, that is only medium term speculation on my part. First things first. The next 3-6 months
will tell the story. We have waited 12 months. If you bought in the 6's before the discoveries,
you still get 6's today, AFTER we found that bloody hard stuff to find in the first place. Whilst
there is still risk with appraisal, the odds are way better than the price being offered pre-discovery,
regardless of all the lousy circumstances we find ourselves in currently.
The reassuring thing for me at least, albeit perhaps macabre, is that we will be put out of our
collective miseries whichever way, sooner rather than later.
GLTAH