zola and wa351

  1. 20,972 Posts.
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    I was reading the quarterly an was amazed to see the gas contracts that have an NPV of 75 million and that will provide revenue of 220 million ove the next 6 years is only 25 bcf of gas. That helps puts the upside of some of their other assets into perspective.
    Let's take Zola which they have disclosed the farm out is imminent. If they farm out half their exposure that will leave them with 100 bcf target at a cost of 4.5-6 million. Upside of a discovery 300 million or appprox 2 dollars per share. Downside risk 3-4 cents per share.
    Similarly WA351 which Strickland doesn't want to farm down. Tap share of the propsect 500- 750 bcf. I am not even going to bother doing the numbers as they are too big too believe. With chances of success being 50 percent plus and Hess producing an over 80 percent success rate in neigbouring permit Taps future I think will likely be forged in Australia. The point I am trying to make is Tap only needs 100 bcf ner discovery and we are talking about a much different company with much different value and a much different share price. It also seems that this targets may cost 4-8 million per drill or 3-5 cents per share buy the return if succesful is in the mutiple of dollars. Naturally I haven't considered development costs but I think the value is obvious. Even if there is a find in Zola that is big enough to tie in antiope gas discovery that in itself is worth about 25 million assuming a 10 percent exposure. It would be interesting to know how small a discovery in Zola needs to be to be commercial. I would guess at least 500 bcf
 
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