I didn't get chance to read it unfortunately- but as I'm not a geology expert, it's doubtful I would have fully understood it anyway.
I know that traditionally speaking, hitting the 'basement' is normally seen as the point which drilling should be stopped, because of a risk/reward basis that says the rocks below are very unlikely to contain commercial hydrocarbons, plus the fact that granite is hard to drill through.
Perhaps it's different here, I'm not sure. The only other drilling that has taken place in Georgia recently to the best of my knowledge is that of Frontera (AIM: FRR). They haven't had any 'basement' problems, flow-rates have been more their issue, but they have found commercial hydrocarbons (the challenge now for them is getting good flow rates).
It's not really a great example though as their block is quite some distance from ours, even though it's in the same country. Likewise though I wouldn't try and extrapolate results from Korea or other areas to this basin- the geology to my knowledge can change quite substantially from one area to the next (see the Falklands for an example of this- RKH hit oil on their first drill, yet DES failed to find anything after 6 drills, and their licence areas are right next to each other).
Bottom line is no one can really know until the results are in. There's been no drilling past the basement in our blocks, so it's impossible to say what might be found. My gut feeling is that it would probably be better for investors if the rock they have encountered is just volcanic rock, not part of a 'basement'- but that's just gut feeling, not fact.
Next update will be interesting to see how far they've managed to drill thus far.
RRS Price at posting:
15.0¢ Sentiment: None Disclosure: Not Held
