wpl ching spin

Hi all,

In regards to the WPL Chinguetti release yesterday. The following extract may be of interesting. It's from an old O&G article in regards to the Woodside Fusion disagreement! (V36 N13)

"But, first to get the second denial out of the way before going on to prove beyond a shadow of a doubt that the market is selling HDR incredibly short as far as offshore Mauritania is concerned. Alan Stein, the chief executive of Fusion, was responding to the following excerpt from a recommendation for HDR which appeared in Vol 36 No 12. Harking back to that piece on Fusion Oil & Gas in Vol 36 No 10, the source who provided the information responsible for its appearance, is sticking to his guns, claiming Fusion did inform the London market in June that Chinguetti was full to spill, i.e. could contain up to a possible 790 million barrels of sweet 47 deg. API light crude, and because of that, apparently no longer receives price sensitive information, with project operator, WPL, insisting all joint venture partners sign very detailed confidentiality agreements."


Cheers,
xmagx


Good post on WPL nonsense by kahuna below. (taken from SS)

Hi

Omission .. The 8th deadly sin and does this release comply with continious disclosure rules of the ASX ? It however gets my prize for the 2005 WPL furfy about Mauritania jointly with drilling the fringes and telling nobody about it until we looked at a map !!!


If there was any doubt .... something going on with WPL and HDR. WPL released about the costing of Chinguetti yesterday and the reasons for the blowout. Now if one reads this release one might presume there was trouble with Chinguetti. Here is the usual downer from WPL ......

This goes way beyond being conservative ......

Yesterday
From WPL ... and parroted by ROC the dummy ...

""The current project cost estimate is primarily a result of increased drilling scope due to complex geology, resulting in extra time to drill sidetracks, as well as additional costs to prepare the sub sea flow lines for installation. "

Negative or at best neutral .....

HDR in a first refused to release this to the ASX.

I don't blame them I would call this release overly pessimistic and misleading !!

We have know about the cost overrun for many months and was foreshadowed in April by HDR ........

Here is what they said !!!

From 3rd quarter activities.

""Overall drilling results have been positive, meeting or exceeding expectations for
both reservoir quality and hydrocarbon column with a likely increase in proved
reserves. Five sidetracks were drilled for various reasons and all encountered
significantly improved reservoir but the additional drilling effort has placed upward
pressure on the project budget of US$625 million.""



It is no wonder HDR spat the dummy about this one and has yet to release WPL'S stuff.

WPL is a disgrace .... I would question the ASX and ASIC about continuos disclosure on WPL'S part if I thought it would get me anywhere. Nothing has changed with Chinguetti drills or progress or upgraded reserves outlook ... so WPL'S release yesterday falls on the very outer edge of continuos disclosure ... the very outer edge.

WPL makes it appear things are not going well when the exact opposite is occurring !!

As we all know HDR has taken WPL to court over the allocation of costs in Mauritania.

Also we are aware NOW only by looking a the map ... of the last 6 drills 5 have been deliberately targeting the fringes of the know oil area and ignoring more likely close in lower risk holes.

Now is one was to read WPL'S release yesterday in isolation one would think there maybe was some question even over the estimates of recoverable oil given in the first place, but thanks to HDR's earlier comments we in fact know this is not the case and the opposite is likely to occur. The costs are somewhat irrelevant in this light with the current recoverable estimate being 125 mmboe ... in light of HDR's comments even a tiny increase in the recovery rate will more than pay for the overrun.

IT is clear there will be an upgrade in the amount of oil recovered and just a 1.5 million barrels increase will more than pay for the overrun.

Not a thing we can do but sit it out. WPL is doing HDR no favors but with Tevet 2 coming up then a more likely drill after that as well ..... the drill after Tevet 2 is more likely but not vastly better than others in the past maybe a 50% chance. The drill after that as well is and even lower probability drill out in block 6. WPL the operators refusal to drill the 5 targets surrounding Tiof and all within 5 km of the massive Tiof revisor is all one needs to remember for the long term. Two unnamed prospects virtually adjoin tiof to the North and one to the South and why they have not as yet been touched is just bloody mindedness out of WPL.

Long term it does not matter one little bit, they will get round to the 5 sisters of Tiof.
In the meantime just sitting tight.

Back to fixing my house up ... Painting mowing .... Arrrh

Cheers