was it the right decision ?, page-3

Hi Moorefish,

I don't disagree with your sentiment, but in terms of Tunisia there are a couple of matters you missed namely the well came in high to prognosis and the value of other prospects in the permit.

The well came in 40 meters high to prognosis.The predrill estimate was a P50 of 110 million barrels and a P10 of over 200 million barrels, which would put the volumetric estimate somewhat higher than the P50 estimate, in other words your assumption of 100 million barrels could be conservative.

The reason for drilling the horizontal well would not been for flow rate ( as in tight reservoirs) but to ensure they hit the fracture zones. In the Sidi el Kilani field they drilled nine wells of which four were successful. Very easy to walk away after a couple of dry vertical holes (i.e HW1 and HW2).Cooper should be congratulated for identifying the HW3 opportunity.

The HW3 is not the first horizontal well to target the Aboid formation. Kufec attempted to drill a horizontal well in the Sidi el Kilani field in 2002 and had to stop short of their target due to mud loss.

I am assuming that the JV were aware of this and still had problems. With what the JV has now learnt they can now try and find alternative drilling techniques.

Given the delay I would be providing the data gained to service companies such as Weatherford and ask what solutions they may have for highly fractured reservoirs.( Weatherford have a system using pressurized water rather than drilling mud for highly fractured zones.)

If they can solve the drilling issues then they have significantly derisked other Aboid prospects in the permit and these are bigger than HW3 as evidenced by JKA investor presentations. Given the difficulty in picking the top of the Aboid formation some of these prospects could be bigger than currently modelled.

That being so ultimately there may be more value in the exploration prospects than in HW3. Even on a highly discounted basis these prospects should have significant value.

The exploration licence has a limited tenure and we are now five years in. I think there are two extensions of three years available

What ought to be happening is that the JV should be progressing 3D seismic over a couple of the larger prospects and applying the same techniques as HW3; which the JV has stated provided a pretty accurate model of the fracture zones.

Time is now of the essence and rightly should be the province of a company with deep pockets so that they can make it happen quickly.

As I have said in previous posts I am not adverse to selling the interest as long as the price is right.