DB,
I think there is more at play than just guessing
Some of the SNE growth as we work forward will be due to 'reserves growth' in part, which is where at each stage of development the size increases - more info here
https://en.wikipedia.org/wiki/Oil_reserves.
More than this is the fact we are under a
tight hole policy, which FAR is quickly trying to work around.
Hence the 42% growth per FAR's update which CNE are still sitting on and haven't released to the public. (CNE are strictly enforcing this and there have been people sent home from the Athena for being loose lipped).
FAR is frustrated that CNE is not releasing detail on schedule and or withholding detail which the RISC approach will assist with, see the wikipedia article above for why this is important from a reporting / progress approach in FAR maximising the value to shareholders.
Separately, I just noticed Zacma's note around
Valentines and I want to make a
peace offering;
As a Valentines special - I actually believe that both PJ and I could be right simultaneously and if he stopped arguing and put his brilliant mind to work on unpacking the clues that FAR are laying down for us to work to, we could reach a middle ground.
The reality is that;
1. PJ is talking to the detail that has been
published to date and is in the public forum - and of course is right as to what we have been told to date and is very logical.
2. I am presenting what I think we can get to based on both reserves growth, but also based on the tight hole policy being lifted / clues that FAR has provided.
On this basis, I find it incredulous that my estimates around the growth in the FAN's are being criticised - I would prefer a more logical and scientific approach as to what I have done to reach the albeit lofty estimates I presented yesterday for the FAN's (BTW, I don't know how anyone could have misinterpreted if I was talking to a FAN, or all of the FAN's, all of my formula and workings was presented, I spoke to all 3 green areas being included in my working - how can we have 3 green areas for only FAN-1????).
Something else I should disclose as PJ very kindly did in the early days, is that I too have a personality profile and probably at no surprise to anyone on this forum it is a
ENTJ http://www.16personalities.com/entj-personality, with PJ as a
INTP -
http://www.16personalities.com/intp-personality, I think that anyone who bothers to read both profiles will conclude that what you are seeing on the forum is actually an intellectual endeavour playing out much to the benefit of all and sundry. What's the benefit? - you get to sit back and get a glimpse into thousands of hours of work and not have to pay for any of it;
A INTP summary (PJ) - INTPs are known for their brilliant theories and unrelenting logic – in fact, they are considered the most logically precise of all the personality types. Famous INTP's - Bill Gates, Ellen Page, Kristen Stewart, Albert Einstein, Rene Descartes, Blaise Pascal, Isaac Newton
Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.
Albert Einstein
A ENTJ summary (Me) - The underlying thought running through the ENTJ mind might be something like "I don't care if you call me an insensitive b*****d, as long as I remain an efficient b*****d". Famous ENTJ's - Steve Jobs, Gordon Ramsay, Harrison Ford, Margaret Thatcher, Whoopi Goldberg, Jim Carrey, Franklin D. Roosevelt and Warren Buffet. Something else about INTP's that may be interesting -
http://www.********/investing/gener...ersonality-type-tends-to-make-more-money.aspx *note the difference in the INTP.
"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."
Steve Jobs
The reality is that if you read and study both profiles, in a weird sort of way PJ and I actually need each other.
So focusing in on the workings, again for the record... Source - http://undervaluedequity.com/mobile/Estimating-Oil-and-Gas-Resources.html
The formula for estimating oil and gas resources is as follow:
|
Column 1 |
| 1 |
Recoverable Cubic Meters of Hydrocarbons in place (RCMHIP) = A x NP x P x RF x HS x SF |
A = the Area of the structure (in square meters)
This is the
maximum area that is expected to contain oil or gas, estimated from the visualisation created by the data from the seismic data.
NP = the Net Pay (in metres)
The net pay is an interpretation of the
average thickness (
vertical height) that would hold the hydrocarbons. Sometimes it is quoted as a net-to-gross ratio; then you have to calculate the net pay yourself (i.e. when the net-to-gross ratio is 1-to-15 and the depth is 3000 metres, then the net pay is 200 metres).
P = the Porosity (as a fraction)
Typical porosity of the oil or gas bearing sandstone ranges between 1% and 40%, with most
common levels at around 15% to 30%.
Permeability,
which is the ability of the hydrocarbon to flow through the voids, is also important but is incorporated in the recovery factor.
RF = the Recovery Factor (as a fraction)
The recovery factor is the proportion of oil or gas that is recoverable from the reservoir.
For oil fields typical recovery factors are between 10% and 40%, and up to 70%, while for gas it commonly ranges between 50% and 80%.
HS = Hydrocarbon Saturation (as a fraction)
Hydrocarbon saturation represents the proportion of
oil present with water (found in all reservoirs in varying levels of saturation). The hydrocarbon saturation is estimated by well logs (detailed records of the borehole) with
typical levels of 50% to 90%.
SF = the Shrinkage Factor (as a fraction)
The shrinkage factor shows the reduction in
oil volume recovered on the surface. The shrinkage factor for oil commonly ranges from
0.50 to 0.95.
For
gas the
Formation Volume Factor (FVF) is used,
which is the inverse of the SF. Due to reduction in pressure at the Earth's surface, gas expands from 50 to 350 times its original volume, depending on depth and composition of the gas. Hence a gas
expansion factor is used, changing the equation for estimating the possible recoverable cubic meters of hydrocarbons (gas) to:
A x NP x P x RF x HS x FVF!
In order to calculate the
Recoverable Oil in Place (ROIP) you have to multiply the RCMHIP with factor 6.29. The 6.29 factor represents the number of barrels of oil in a cubic metre.
By multiplying the RCMHIP by 35.3 the equation equals the number of cubic feet of gas (as used in gas reservoirs). Keep in mind that for calculating the
Recoverable Gas in Place (RGIP) you have to use the
Formation Volume Factor (FVF) instead of the
Shrinkage Factor (SF) in the formula.
The veracity of the assumptions in estimating oil and gas reserves can only be established once an exploration well has been drilled. The first confirmation will be if there are any hydrocarbons present. Testing of the reservoir will establish the quality of the reservoir (porosity and permeability) and the net pay zone. To confirm the areal extent of the reservoir will probably require the drilling of one or more appraisal wells.
Again, here is my workings for the base estimate;
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
|
|
|
|
| 2 |
Recoverable oil in place (ROIP) = A x NP x P x RF x SF x HS x 6.29 |
|
|
|
| 3 |
|
|
|
|
| 4 |
Area |
60000x10000 Metres |
600,000,000 |
|
| 5 |
Net pay (Metres) |
29 |
|
17,400,000,000 |
| 6 |
Porosity |
24.00% |
|
4,176,000,000 |
| 7 |
Recovery |
30.00% |
|
1,252,800,000 |
| 8 |
Hydrocarbon Saturation |
73.00% |
|
914,544,000 |
| 9 |
Shrinkage |
70.00% |
|
640,180,800 |
| 10 |
Barrels |
6.29 |
|
4,026,737,232 |
| 11 |
Billion Barrels |
|
|
4.03 |
I stated in my original post that we
don't know the porosity, recovery and hydrocarbon saturation.
But I think the above could be fair estimates.
PJ, I welcome you to measure the Area that appears to have Oil in the Feb presentation - bearing in mind this is meant to be the
maximum area that is expected to contain Oil or Gas. (the formula allows for shrinkage towards the outer extremes of the area etc);
I estimate a combined FAN (all 3 FAN's) area of 60km x 10km.
Secondly, Net pay - We know that FAN-1
has a net pay of 29 metres. But no Oil water contact (it will be larger also CNE state in the CMD that "the focus now is to develop geological models supported by seismic evidence for
improved reservoir thickness and quality away from this well, and that could be within the north FAN prospect itself, or it could be in one of the other fans which we map along trend."
Here is where it gets interesting, we of course have 3 green sections (and 3 FAN's) as per the release of the new diagram from last week, I will leave it to you to decide which FAN you attribute each of these sections too. Either way you look at it, the fatter green section (which I DID NOT use in my estimates looks to be twice that of what was there before hand which points to one of the FAN's being visually at least double that of the prior 29 metre pay which has been presented to the public to date, I was conservative and used 29metres across all 3). You could perhaps use the new green section for one of the smaller areas if you like to try and be conservative - I estimate these to be 10x10. The impact of bringing the greener section in will be that of pushing up and over my base estimate.
Porosity
As stated we don't have the detail. I don't believe it is unfair to use the 24%, but open to ranges. The most common range in sandstone is between 15 & 30%. (The average of the Jubilee find which has been used as analogue on multiple occasions is 21%.)
Recovery
Cath in an email from November 2014 stated apply an average recovery factor of 30% (fair assumption at this stage). We know that with EOR, this can get to as high as 70% for this sort of find. I use the 30%.
Saturation
With no Oil / Water contact, and with saturation being reduced in areas of high water. I think using the number stated is a fair if not conservative assumption at this stage.
Shrinkage
The Shrinkage is middle of the range at 70%.
Converting to Barrels
This is a fixed formula wherein you then multiply by 6.29.
All of my workings for simplicity and Q/A are here -
https://www.dropbox.com/s/fases06fjl64t2k/Edison research mockup 14-2-2016.xlsx?dl=0
I would invite you to use your brilliant mind to try and determine via this formula what estimates you get to, or anyone on the forum for that matter. I don't have a monopoly on opinion of the size of the FAN's or SNE for that matter when the tight hole policy is lifted. It would be great to have a few opinions of what we could expect. The thick green section below was a pleasant and welcomed addition to the family when I discovered it yesterday morning;
Let's see some valentines day bonding and some other interpretations of what the FAN's could have
- looking forward to discussing fact and objective calculations over emotional opinions.
Happy valentines day from the fat green section
View attachment 143507
(20min delay)