Hi macky,If I was going to do anything in SC54a it would start...

Hi macky,

If I was going to do anything in SC54a it would start with Lawaan - that is a big pinacle reef and it is as low risk as you will find due to the similarity to the other pinacle reefs which have been drilled.

The development plan would be to drill the well as a subsea well but from a jack-up, this costs a little more but allows you to take the jack-up rig away and leave the well to be produced to an FPSO - this was a major failing in the Tindalo plan, they had to keep the rig to support the wellhead (surface tree) and the production equipment AND had to have a tanker to store the crude - quoted spread was ~$250k/day. FPSO rate would probably be around $100k/day or less. They also did not have the ability to drill and tie in additional wells.

With a success case a standard well test could be done (burn the produced oil - 2 or 3 days) and the well left suspended with a horizontal subsea tree in place ready for production.

In a failure case you would move to Yakal and do the same there (as a back-up with no risk of finding oil).

Engineering and planning for both cases (Lawaan and Yakal) would be advanced as far as possible without major capital investment and at this point (wells in the ground and tested) I would go to the market to raise whatever additional funds were required to get the FPSO over the well and producing.

The wells themselves are circa $20 million dollar wells. The trees may be another $2million (refurbished trees fine - nothing fancy). The remainder is funded later (but soon after testing the well/s) - at a guess $10 mill in capex and installation.

Even if you get .75 million barrels at 5000 bopd average and keep $60 per bbl after taxes and costs you'd make some money at Yakal. If Lawaan is a find you make huge $$

The reason for the big number cost fo Tindalo is that the seismic, well cost and rig hanging around costs are in that number. Well cost say $20 mill then the completion when they came back would have taken 15 days at least - say $7 mill. The rig must have been hanging around for at least 120 days after production stated (doing nothng but providing a platform for the dry tree and separator) - 120k/day x 120 days ~ 15 mill.

All the above is not of course 100% thought through or accurately costed - but that is somthing that NDO should be doing...

p1000