With recent Ice 1 data coming in and his comments re Paul Basinski's accuracy with his BEX model at this project I'm going for the latter.
Here r just some excerpts.
“I think this is better than just a good punt,” Wall told industry media at a recent company briefing.
“We’ve got 100,000 acres (272,400 now !!!), we’ve got this unconventional play that Paul put together that he has been working on for six or seven years using the same methodology he used to identify the best acreage in the Eagle Ford. And at this stage, this looks better.”
“To me, that is very compellingand we’ve had independent third parties look at this and they can’t poke any holes in it. We think there’s a billion barrels here.”
“I have looked at a lot of projects and there are enough people out there that I have made enough money for that trust me when I say this is exceptional and unique…I’ve never seen anything else like this before.”
Its also interesting to reflect on how they have responded to Conoco's knock back of Icewine.
"Basinski convinced Wall of the major liquids rich opportunity at Icewine which has had the ruler run over it by supermajor ConocoPhillips.
According to Wall, Conoco passed on Icewine because they were already the largest oil producers in Alaska and, at the time, had their hands full with drilling the Eagle Ford."
At the same time, the ASX and AIM-listed company is searching for a farm-in partner to assist in advancing Icewine. Wall admits Alaska doesn’t have the infrastructure to currently support a billion barrel project. However, with Icewine boasting an estimated $55 a barrel breakeven price at Brent pricing, Wall believes the project ticks all the right boxes for a midstream player.
“Realistically we don’t think a supermajor will come in at this stage as the project needs to be de-risked for them,” Wall said.
“But a mid-tier like a Hillcorp/ Marathon type company could come in and say ‘we’ll spend $80 million for 51 per cent of your project’…and then we would go and diversify the company and get another asset in.”
“Plan B would be we go and secure a debt finance package for 75 per cent of the cost of the well (estimated at $20 million) and then we have a $5 million gap which we will then try and farm that out to smaller company.”
Well its history now that they have gone back to market and raised the drilling capital and drilled Ice 1 and are rapidly derisking the HRZ unconventional !!!
Not only this but as mentioned above, they have well and truly expanded their acreage to 272,000+ which when adding some positive 3D data that may indicate good conventional for a mid to large petro to start taking more of an interest.
I'm wondering if Conoco said to 88E
" You go back and increase the economies of scale and reduce risk in both the unconventional and conventional and we'll revisit Icewine"
Just interesting from the standpoint that 88e suddenly bought up that acreage even tho its well away from the TAP's and the Dalton. Implies to me that they are derisking the conventional on the large turbidite fans that can potentially hold large conventional reservoirs as proven up in the north west by Repsol.
A negative to attracting a farm out partner atm will be the sell off of Lower 48 acreage due to the low oil price.
Its obvious that with proven up production acreage in these Lower 48 states that potential partners will look more closely at the Lower 48 shale plays, and seem to be doing so given the transactions in a previous post.
That being said if 88E does show Icewine to be able to move to Ice 2 then they may be able to dangle a big enough carrot to attract a farm in partner that can fund Ice 2 and if they can prove good overpressure via excellent flow rates this may just then attract bigger money again by whatever means. If they went the financing route and kept it in-house they would certainly need oil to get back to a decent level before banks would look at them.
Whatever the case, as 88E continues to move Icewine forward and derisk they continue to make it more attractive day by day.
(20min delay)