Whilst we are waiting lets recapProven Oil c. 30 API here and...

Whilst we are waiting lets recap

Proven Oil c. 30 API here and good gas flared

Very heavy mud used to counter balance big pressures and open fractures during drilling.

Production Tests 4 weeks ago had an average of 400 barrels with a peak of 1,700, even with all the mud in the open hole.

Next was the attempted 2nd Production Test using acid stimulation, and the tool to do this got stuck with mud still down there ... and that cost us 2 weeks.

Up to last week, the mud was still causing problems but every day that goes by there is less and less mud with c 20% of the drilling fluids returning to the surface contain oil.

Now we are back, but I suspect the test strategy has changed. I think we are back to a normal Production Test without acid (which I think they are about to start). Then it will be the real test with acid, providing there is no danger of equipment getting stuck again.

IF TESTS GO WELL
Then we are all VERY happy, target 100m barrels and Jacka and Cooper to get $7.50 a barrel ($10 is the going rate in Tunisia, but I think with this wells history $7.50 is more realistic), so Jacka gets $112m or c 0.33 a share.


FALL BACK STRATEGY
The fall back strategy is not to endanger the hole (get more equipment stuck), so that Dragon can go into small scale production, which will clean up any reaming mud and then later to use acid extensively.

And of course Dragon to buy out Cooper and Jacka, more than likely on a deferred consideration, payment now of c $20m ($15m for Jacka’s the costs so far + $5m) and $1 payment per barrel produced in the future.


This will fund Nigeria et al and looks like Genel will recommence operation is Somaliland shortly.

But what is looking very clever now is TANZANIA.
There is a new $600m cash oil company called Delonex, desperately looking for assets in East Africa.
http://www.delonexenergy.com/

I believe Delonex cannot get anything in Ethiopia, Uganda, South Sudan or Kenya (even with an office there), everything is gone or its too complicated (expensive strings attached like finance a pipeline / build a refinery).

Jacka’s block in Tanzania has a very good road to it, easy access and the nearest coastal port is only 200 miles. I think we could see a very nice farmin here.