Summary of ROG and why it is INSANELY undervalued, page-3756

MAV01
THIS IS A LITTLE OF WHAT HE POSTED.





How is Net Pay Determined – A Quick Petrophysics LessonDisclaimer: I'm far from an authority on petrophysics, I just know a bit more than the average bloke.In the most basic terms, two factors are needed for a hydrocarbon discovery. First you have to find a reservoir rock (usually sandstone) with enough porosity (empty space between rock grains) in the rock to hold a substantial volume of fluid. A porosity of 0 means there is no empty space, whereas a porosity of 0.1 means 10% of the rock volume is actually fluid filling empty space.Secondly, you need to determine the fluid in that reservoir rock is a hydrocarbon, not water. This is done by determining the Water Saturation. A water saturation of 1.0 means all of the empty space in the rock is filled with water, whereas a water saturation of 0.3 would mean 30% of the empty space was water, and 70% can be assumed to be oil or gas.Unfortunately, there is no way to directly measure water saturation of a reservoir short of cutting a core and measuring it at surface. The only way to determine it for the whole thickness of the reservoir is to try to calculate it based on other log measurements (some combination of Gamma-Ray, density and resistivity in most cases). The physics behind this calculation is complicated and way beyond the scope of this post, but the key point is it’s a long way from an exact science, so water saturation calculated from well logs are really just a ballpark estimate.Now, net pay is just a term that means both of these factors are in place. Porosity (Av Phi in the table above), and Water Saturation (Sw above) need to be calculated based on well logs, and then the thickness of rock that has a porosity ABOVE a certain cut off AND water saturation BELOW a certain cut off, is defined as net pay.But here’s the thing. What cut off do you use? The short answer is it depends, the person doing the analysis needs to make a decision. Changing that number can make a huge difference to the amount of net pay.Back to ROGROG haven't aquired any new well data. So what have they done in re-analysing the existing data? They’ve changed the cut offs for porosity and water saturation that define net pay.The question is, changed them to what, based on what information or new data that ROG has that others didn’t? If only we could open the tab: Pay Cutoffs in Figure 3, we might get a better idea. But we can’t, so we have to take them at their word they had good reason to fiddle the cut offs they used.One other thing does jump out at me though. Based on figure three, the average water saturation across the whole 149 meter thickness of the Sawpit Sandstone is 0.735, so on average the fluid over that thickness is 73% water. In the net pay section, 42.82 m thick, the average water saturation is 0.679, so 68% water. So on average, their net pay only has 5% less water than the rest of the sawpit sandstone reservoir.What does this all mean?Basically, ROG haven’t made some incredible new discovery. They just moved the goalposts to get a better result. Did they have a good reason to move the goalposts? ROG hasn’t provided any details about this.A note on ‘Waxy Crude’