unfortunately I had to leave on Monday and only returned this morning. Will only be able to look in on a sporadic basis today, as I'm very busy on a project. But here are a few definitions of "discovery":
A discovery is one petroleum accumulation, or several petroleum accumulations collectively, for which one or several exploratory wells have established through testing, sampling, and/or logging the existence of a significant quantity of potentially moveable hydrocarbons. In this context, "significant" implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in-place volume demonstrated by the well(s) and for evaluating the potential for economic recovery.
Another:
Prospective Resources can become Contingent Resources once a well is drilled and a discovery is made. According to PRMS, a discovery requires that the collected data establish the existence of a significant quantity of potentially moveable hydrocarbons. The most definitive evidence of this is a well test that produces gas to the surface from the shale. However, this may not be possible if the shale has very low permeability or must be dewatered. In this case, a suite of other data, including laboratory desorption of the cores, gas kicks from the mud logs, evidence of thick organic-rich shales from the logs, and well tests demonstrating that the shale has produced gas from the same interval in nearby leases, will be needed to assign Contingent Resources.
And this one:
The NPD (Norwegian Petroleum Directorate) defines a discovery as one petroleum deposit, or several petroleum deposits collectively, which have been discovered in the same wildcat well, in which through testing, sampling, or logging there has been established a probability of the existence of mobile hydrocarbons (includes both a commercial and a technical discovery).
Last not least:
Not all accumulations that meet the criteria of a "discovery" can be commercially developed in a timely manner. Even where the discovered accumulation is large and flow rates are substantial, there may be some contingency that prevents development and hence classification as "reserves". Example contingencies include: lack of available market, lack of current producing or transportation infrastructure, environmental or legal constraints.
I don't think we have a lack of available market, LOL.
Important is the next sentence from OBL ann 29NOV11 page 4
Please note that the Company never intended this well to be open-hole production tested as this procedure is not permitted under the drilling and completion approvals issued by the WA Department of Mines and Petroleum. The Backreef-1 well reached its Farm-In drill or drop objective of 1500mRT on 24 October 2010 thereby satisfying the earn-in requirement of the Backreef Play Agreement. On 23 November, 2010 OBL announced it had moved to 100% ownership of the Beneficial Rights to the Backreef Area (Figure 1). Importantly, it was also the first exploration well ever to be drilled within the Kimberley Downs Embayment area (a natural syncline between two carbonate platforms � namely the Blina carbonate platform and the ancient coastal carbonate platform) within Production Licence L6 (Figure 2). Investors should also note that under the terms of the Backreef Play Agreement dated October 2008, the Backreef Area Titleholder, Buru Energy Limited, has the once only right to Back-In on Backreef-1, if this well is declared by OBL as a Discovery as defined under strict and formal SPE Guideline definitions. Once so declared, the Titleholder then has 90 days to elect to Back-In by repaying OBL 90% of all drilling and completion costs incurred for an undivided net 30% interest in the Discovery. "
Smart fellows our management. The legal bit with ARC was already settled two years ago.
Definitely worth to stick with these guys.
I am looking forward to very happy times. :)
OBL Price at posting:
2.6¢ Sentiment: ST Buy Disclosure: Held
