Before I start, I would like to say that all of the information included below was compiled from publicly available information on the internet including the web sites of the various company mentioned. It doesn't contain any insider information. It is based purely on the internet research I conducted yesterday, followed by sitting down and playing around with a few thoughts.
The content of this email is not meant in any way to be an investment recommendation on any of the companies discussed. It is purely a sharing of some thoughts with the aim of stimulating some thought-provoking discussion.
Here is a diagram that I developed yesterday that aims to map out some of the relationships, assets sharing arrangements and some hypothetical thoughts on ROD and farm-outs etc.
Relationship Links - my thoughts / comments: ==================================
* Yilgarn – some directors have past employment links with Woodside and/or current directorships links with Rialto Energy
* Rialto Energy – interesting company – directors have past employment links with and/or current directorships and/or consulting services with Tap Oil (TedJ); Woodside, Yilgarn & Nido (LB), Woodside (CM), Grove Energy (GW & RD), plus farm-in partner with Tap Oil at Carnarvon Basin.
* Tap Oil – farm-out partnership with Rialto Energy (70% / 30%) in the Beagle Sub-basin of the Carnarvon Basin.. Tap Oil has also shown an interest in SC 59 in the Philippines.
* Grove Energy – links with Nido and Virgo Energy through their joint bundling of UK North Sea Oil Gas block assets in readiness for 2007 IPO.
* Woodside – no direct links at this point in time but several senior ex-Woodside employees are now with Nido, Yilgarn and Rialto.
* PNOC – shares Area 1 and negotiating a 50%/50% farm-out to Nido for SC 58. Past working relationship links between the two companies and Philippine Govt.
The following notes are a straight extraction from Tap Oil's web site and I have included my own comments in brackets - should be easy to spot.
Tap Oil & Carnarvon Basin - from their web site: ===================================
Tap Oil has interests in highly prospective permits covering in excess of 18,800 square kms (“gross”) in the Carnarvon Basin with participation percentages from 10% up to 100%. Rialto Energy is farming into their Beagle sub-basin acreage (70%/30%). As at April 2006, it as reported that Tap Oil had $100M in cash and was planning to execute a $40M drilling program in the Carnarvon Basin during next 12 months.
Woollybutt Oil Field (http://www.tapoil.com.au/pages/about.asp) - Tap has a 15% interest in the Woollybutt Oil Field located in the Carnarvon Basin west of Barrow Island. High quality, light, sweet crude oil is produced from the field using a leased Floating Production, Storage and Offtake (FPSO) vessel, the "Four Vanguard". Oil is currently produced from three subsea wellheads via a Disconnectable Single Point Mooring System. This facility is well located to be used for production from any other commercial discoveries at the Woollybutt South field or separate exploration prospects within the associated Production Licences. The knowledge gained from participation in the Woollybutt area gives Tap a sound basis on which to explore and develop other prospects in similar geologic provinces in the Carnarvon Basin.
Airlie Island Infrastructure – (INTERESTING) - Tap has a 10% interest in Petroleum Production Licence TL/2 which includes the mothballed Airlie Island production and tanker loading facilities. These facilities are strategically located close to a number of small oil and gas discoveries. A commercial discovery in Tap's surrounding exploration permits will likely underpin refurbishment of the Airlie Island facilities and may make development of these small oil and gas fields economically feasible.
Tap Oil’s Strategy (http://www.tapoil.com.au/pages/about_strategy.asp):
1. Mature production areas such as Harriet and Woollybutt areas, where new reserves can be quickly tied into to maintain cash flow.
2. High quality appraisal opportunities, where lower risk appraisal wells are drilled, and
3. Frontier areas, in the SOUTH EAST ASIA and Australia | New Zealand regions of interest.
(INTERESTING ==>) Tap is presently evaluating a number of opportunities that fit into the second and third categories above and the company is continually pursuing the acquisition of existing production assets to enhance the first category.
Further (http://www.tapoil.com.au/pages/operations_carnarvon.asp):
(INTERESTING -) Since formation Tap has acquired an extensive portfolio of acreage around infrastructure that allows early production of discovered oil and gas. The Harriet area infrastructure, the Woollybutt FPSO and the mothballed Airlie Island facilities provide strategically placed infrastructure to facilitate early production of oil and gas discovered in surrounding and adjacent exploration permits.
(INTERESTING - Dave Whitby mentioned at the AGM that a lot of his experience has been GAS related.)
Tap has been steadily acquiring additional high quality acreage within the Carnarvon Basin and continues to apply a strategy of acquiring and reprocessing 3D seismic in areas near strategic infrastructure. Application of new techniques in processing of the data and thorough interpretation of these data has enabled Tap to continually add discoveries near the producing infrastructure. Fields have been developed rapidly. (INTERESTING - Starting to sound like R.O.D.)
Tap is using some $30-$40 million each year for its exploration effort. Much of this expenditure has been in the Carnarvon Basin. In 10 years since its formation Tap has drilled an average of almost 10 exploration wells per year.
(Nido could certainly use some of these $$ for drilling in the N.W. Palawan if they decided to partner.)
Additional 3D and 2D seismic will be acquired or reprocessed in the search for new prospects. New concepts will be tested, and discoveries appraised and developed. Tap will also participate in bidding for acreage which has been gazetted by the WA State and Federal Governments for application.
(Thought for discussion – I wonder whether Nido is thinking of doing this also – perhaps partnering with Tap Oil and maybe Rialto Energy?)
The Barrow Island oilfield has produced 300 MM bbls oil since it commenced operations in 1967 and is expected to recover a further 100 MM bbls through secondary recovery techniques.
(Comment – sounds like R.O.D. technique might be able to help here)
Since listing in 1996, Tap has had an excellent success rate for discovering both oil and gas and this has confirmed Tap’s view of the high prospectivity of the Basin. During this 10 year period, Tap has participated in the drilling of 99 exploration wells which have resulted in 45 oil, gas and/or condensate discoveries which have been commercialised or are considered by Tap likely to be commercial in the near future. This exploration success rate of 49% is well above the industry norm of 10%.
(Comment – I like the following statement “ … likely to be commercial in the near future.” – might be suitable for R.O.D.?)
Most of Tap’s producing oil and gas fields are centred around the Varan*s Island production infrastructure hub, an important strategic facility to Tap. The Varan*s hub comprises substantial facilities to process both oil and gas for delivery to customers.
(Comments – sounds good to me – helps to keep the costs down)
Tap Oil has an active drilling program planned for next 6 to 9 months – their web site lists what they are planning.
PNOC in talks with 3 firms on Palawan oil search Posted: 3:42 AM | May 27, 2006 Abigail L. Ho Inquirer
PNOC Exploration Corp., a unit of the government's Philippine National Oil Co. (PNOC), is negotiating with two foreign companies and a local one on possible farm-in agreements in two petroleum exploration blocks off the western island of Palawan, PNOC Exploration president Eduardo Mañalac said.
Australia's TAP Oil Ltd. and Sweden's Lundin Oil Ltd. are discussing entry into Service Contract 59, which covers the West Balabac exploration area off Palawan, he said.
"They're looking at the data. We're at the early stage of discussions with these firms," he said.
Local firm Nido Petroleum Philippines Pty. Ltd. is negotiating entry into Service Contract 58, which covers the West Calamian exploration block, Mañalac added.
Nido Petroleum will likely have a 50-percent working interest if a farm-in agreement is made, he said.
"Nido negotiations with PNOC for possible farm-in are well advanced," Nido Petroleum said in a presentation posted on its website.
Nido Petroleum is "fine" with PNOC Exploration, Mañalac said, noting that the two companies have a partnership to develop a petroleum block in southwest Palawan awaiting formal award by the Department of Energy.
Energy Undersecretary Guillermo Balce has said the department should be ready to award the PNOC-Nido contract soon.
NDO Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)