Let's see if I've understood this correctly.
THE DEAL
Part 1: 3D survey
Woodside to pay for the $35m 3D seismic survey
- to be conducted up to 3 months
- with fast-tracked results by June-end
PCL as operator, with Woodside to advice.
Part 2: Farm-in
Woodside as operator undertakes drilling of first well for 56% interest.
PCL is carried for 20% interest.
This is bloody great news for our cash-strapped minnow. We just sit pretty and let big brother work it.
Part 3: 20% interest or 10% interest or 1.5% royalties
If 2nd well is drilled, PCL pays 20% of costs for its 20% interest or 10% of costs for 10% interest or sits pretty for 1.5% royalties.
If the first well is as profitable as all signs indicate, i.e.:
- an independent assessment on the potential for the Saturn Superfan indicated a giant scale oil resource
- "2,800 line kms of good quality 2D seismic as well as numerous other reports and studies" identifying a number of leads within a vast 2,400km² Turbidite Fan complex, Saturn, ... encased in sealing shales"
- nearology of Total, Shell finds and throwing most of their exploration budget into the area
- the very fact Woodside would "gamble" $36.5m just for the right to do a survey
... then surely PCL should be flush with cash from its 20% cut from the 1st well, enabling it to fund its way into the 2nd well?
Kjartan made a rough calculation based on 20% of 1.3 billion barrels @ $24:
https://hotcopper.com.au/threads/ann-woodside-enters-into-exclusive-option-on-namibia-pel-87.7261414/page-18?post_id=66547786
This was a good calculation for a rough but realistic expectation.
Regarding sam0408's post on PEL 87 being once drilled as PEL 24 by Brazil's HRT, I found this article:
https://brazilpetrostudies.com.br/2022/01/31/shell-makes-promising-discovery-in-namibia/
"HRT went on to drill three deep-water wells in Namibia, finding light oil in Wingat-1, although it came up sub-commercial. Unfortunately, that’s where the story ended for HRT in Namibia. Disagreements with investors, who continued to call Marcio (HRT CEO) crazy, eventually brought the Namibian dream to an untimely end before the final two wells of the initial exploratory campaign could be drilled (adjacent to Shell’s recent Graff-1 discovery, as it would turn out)."
Ten years later, with better and more advanced methodologies and technology, it's worth repeating that we have an independent assessment on the potential for the Saturn Superfan indicating a giant scale oil resource, "2,800 line kms of good quality 2D seismic as well as numerous other reports and studies ... identifying a number of leads within a vast 2,400km² Turbidite Fan complex, Saturn, ... encased in sealing shales".
(quoted from PCL's ASX anns).
In PCL's words:
"The anticipation has been building for some time and it looks as though the Company is in the right place at the right time. The historical exploration programmes undertaken and the patience shown by Pancontinental in slowly chipping away throughout the years looks to pay great dividends going forward. Pancontinental is rubbing shoulders with the world’s industry giants holding a significant 75% interest in a now sought after region for energy exploration."
As an investor in this highly speculative end of the field, I've got enough indicators to buy on the dips and wait out the unfolding of this saga.
I look forward to June-end, to December, to 2024! Riveting stuff!
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