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Resources analyst Charlie Long sees good times ahead for uranium Watch here

Resources analyst Charlie Long sees good times ahead for uranium


Victoria Oil & Gas Share Chat (VOG)



Share Price: 60.00Bid: 59.25Ask: 60.75Change: 0.00 (0.00%)No Movement on Victoria Oil
Spread: 1.50Spread as %: 2.53%Open: 55.00High: 0.00Low: 0.00Yesterday’s Close: 60.00


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bigsmoke
Posts: 3,788
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Opinion:Strong Buy
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per KYC (on iii) - note...
Today 19:17
"...We are entering an aggressive and expensive exploratory phase, which if successful will transform VOG in ways no one has begun to think of; the stated ambitions for 2021 are actually too conservative..."
 
bigsmoke
Posts: 3,788
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Opinion:Strong Buy
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View Thread (2)
KYC (on iii) part 6
Today 19:16
We are entering an aggressive and expensive exploratory phase, which if successful will transform VOG in ways no one has begun to think of; the stated ambitions for 2021 are actually too conservative imo. Having one processing plant expansion with capacity of 40mmscf/d could, if all goes to plan, soon be a limiting factor. Nice to see we are going for 40mmscf/d; we were also quoted prices for 25mmscf/d and 30mmscf/d upgrades.

We have been given in total $350m of previous work on Matanda/Bomono, and from the blackwatch seismic coverage diagram (p6) have a lot of data to reprocess. P3 of the Blackwatch document shows a rough overview, but there is a wealth of information in this document from 2003 if anyone hasn't seen it:

http://www.equatorialoil.com/PDFs%20for%20download/RBray_HGS_PESGB_2003.pdf

Especially on the oil seeps!

Regards

kyc
bigsmoke
Posts: 3,788
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Opinion:Strong Buy
Price:60.00
KYC (on iii) part 5
Today 19:16
This is a massive field (and one reason why the anomaly has been prioritised as less important), and highlights why it is so important we drill that tail to 4200m so we can have a much better idea what exactly is in this field! Our pipeline is currently 8.7km from Moambe/Zingana, so this structure couldn't be better placed, and even now would only need a few km of pipeline to reach. And follows the N3 heading to Limbe nicely.

Note we were told, 'Work is currently underway to identify drillable targets in the Matanda and Bomono Blocks by the end of 2017, with a view to drilling wells in 2018-2019.' As HPC Follower correctly states, the Zingana/Moambe structures are 2km from this structure and it would be possible to drill from one drill pad. This is not the Missellele-1 drill point however which is located about 10km west-south-west (see fact sheet). Very little is known about Missellele-1. It had a TD of 3280m and was plugged and abandoned as a dry well in 1975. There is a chain of oil seeps nearby but no data in the public domain that supports why we would want to drill there. KF has previously talked about multi-well campaigns with between 4 and 10 drills. It's quite possible that this won't be limited to a two-well drill, more like 4-wells directionally drilled from one pad, probably WI 65-70%, Afex Global 20-22.5%, SNH 5-10%.

We have just been told, 'Among the prospects that have been identified internally is one with un-risked prospective resources of approximately 1tcf of gas in the onshore Matanda Cretaceous Logbaba Formation in a large structure near the Missellele-1 well. This structure is only some 8.7km from the current western leg of our pipeline on the Bonaberi side.' The Missellele-1 well is actually a further 10km west south west. But were also told, 'GDC's current pipeline infrastructure is only 8.7km away from the Bowleven drilled wells'. So this means that the newly named Matanda Cretaceous Logbaba Formation (MCLF; I'm naming it, as I found it lol) is indeed the one I identified. Having an 'unrisked' prospective resource of 1 tcf of gas shows its potential. BLVN thought it was bigger than this and, significantly, deeper than the Logbaba formations.
bigsmoke
Posts: 3,788
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Opinion:Strong Buy
Price:60.00
KYC (on iii) part 4
Today 19:15
We really do need to be able to fill in that missing data; which could add substantially to the worth of our licence block.

FUTURE DRILLS

Fingers crossed we'll get Bomono! I've written loads on Bomono over the years but since we have quite a lot of new data it is worth a revisit at some point. I'll leave to another post if anyone's interested.

Let's look at Matanda future drills, especially the Missellele-1 discovery and the 'There is also significant on-shore potential on the trend between the North Matanda discovery and the producing Logbaba field.' I discussed this latter field in a couple of previous posts. Have a look at p8 of this BLVN presentation from Feb'17, and its scale:

http://www.bowleven.com/system/files/uploads/financialdocs/investor-presentation-presentation-20170201.pdf

The map in the top right shows data we had been shown in BLVN's previous presentation for the very first time. It shows the Moambe structure as an upper cretaceous (ie lower Logbaba sands) structure with a massive 10km long deeper cretaceous (Mundeck oil?) structure adjoining it to the south west. Further south west we have the smaller upper cretaceous gas field at Zingana. Then you have the massive upper and lower cretaceous twin structures (this seems to have been renamed as the Matanda Cretaceous Logbaba Formation) that both extend at least 10km that I identified and discussed in previous posts. I believe the lighter mauve depicts Albian Mundeck and the darker mauve Aptian sands, both oil and gas bearing, with no overlying Logbaba sands depicted, as per p8:

http://www.victoriaoilandgas.com/sites/default/files/technical_reports/160815%20Blackwatch%20Logbaba%20Reserves%20Report%20August%202016%20Final.pdf
bigsmoke
Posts: 3,788
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Opinion:Strong Buy
Price:60.00
KYC (on iii) part 3
Today 19:14
The fact that 125m of gas bearing sands have been already encountered at La-108 shows how good a well it will be once put on test (before Q3?). Remember La-103 encountered 56m of pay zone but only has a TD 2767m. It flow tested at 4.75MMcf/d at 1780m (9m pay zone), 12.25MMcf/d at 2019m (19m pay zone), 9.1MMcf/d at 20151m (12m pay zone) and 12.25MMcf/d at 2364m (14m payzone). La-105 had a TD of 2652m and encountered 85m of pay zone. Compared to La-108's 125m of payzone by 2702m TVD. That's a massive increase in comparison as so we must have penetrated the beds more towards the crests of the lenses having learned from La-103 and La-105. Remember the 55-56MMscf/d tested at La-105 was only from these lower Logbaba beds that we have already been told have been successfully penetrated with La-107. La-107 is almost certain to flow test at a higher rate to La-105 since 125m of pay zone will tested compared to 85m from the same total interval. So this begs the question, we not stop now since we have had a well control incident that required plugging at 3076m MD. (=2702m TVD)? Why risk a sidetrack drill?

To understand the necessity of the sidetrack, it's important to understand previous (limited) data of where the sidetrack will drill and what it will mean either positively or negatively to our reserves. Note that the calculated IGIP for the upper Logbaba sands at La-105 is 9.23bcf tested and 18.43 bcf untested and 35.89 bcf IGIP/km2. For La-103 it is 24.92 tested and 0.87 untested and 36.02 bcf IGIP/km2. But the lower Logbaba sands at both La-105 and La-103 only partially penetrated the sands and we only have: 0.18 bcf IGIP/km2 at La-105 and 6.36 bcf IGIP/km2 at La-103. These need improving, as they are terrible, but have never been properly explored! The sidetrack should fully penetrate the lower Logbaba beds and allow these figures to be calculated more in keeping with other areas. For example, about 1km north at La-106 we have 29.63 bcf/km2 in the lower sands (the upper Logbaba sands at La-106 is 11.69 bcf IGIP/km2). That's a massive difference. The sidetrack could allow a significant improvement in final booked reserves (202 bcf 2P remaining as of almost a year ago). Also the quality deteriorated dramatically down here at La-105, but strangely not La-103. The sidetrack will also answer this question. If we do not drill it, we will probably have to accept a more conservative size for the field and we won't know if it's low case (10 bcf/km2), mid case (52bcf/km2) or high case (75 bcf/km2) or the extent of the field. Remember that the top of the Logbaba formation is thought to be 2.4km2 (low case) and 4.3km2 (mid case) and 11.3km2 (high case). We therefore need to drill the sidetrack all the way along line 33-81-18 (see p 9 of Blackwatch report; final target is where it says 1678 in the blue area of the diagram top right, which correlates to the unknown bottom right area of the 2D seismic bottom left of the page, named 33-81-18).
bigsmoke
Posts: 3,788
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Opinion:Strong Buy
Price:60.00
KYC (on iii) part 2
Today 19:13
Logbaba formation:

Low case: 73 bcf
Mid case: 377 bcf
High case: 544 bcf

And deeper in the anomaly is the data from the Mundeck:

Low case: 73 bcf
Mid case:256 bcf
High case: 659 bcf

Giving a total prospective target of low case 146bcf to high case of 1.2tcf for the anomaly. The mundeck is thought to be both oil and gas bearing but we won't know unless we drill it, starting with La-107's tail. This is important as we are not prioritising this as our next drill, but are now looking next to Missellele-1, for some unknown reason (see below).

Back to La-107. Logbaba A-D sands were all encountered with gas and oil shows as reported. (The Logbaba condensate is 49˚ API and the average yield is about 14 bbls/MMscf ). There being 7 main sands in the Upper and Lower Logbaba formation that LA-104 encountered and we should have drilled through 5 of these by now. Of particular note is the bed at 2235m which had good gas shows, a main target of LA-107 and we should have gone through it about 2 weeks ago.

Further, the calculated IGIP/km2 for the lower Logbaba sands at La-104 is 38.74. (23.24 in the Upper sands). This is the highest calculated IGIP of any well at any depth of the 12 calculated areas (upper and lower) of La-101, La-102, La-103, La-104, La-105 and La-106.

Of note La-106 had 29.63 IGIP/km2 calculated from a partial penetration. 6 years ago I highlighted grave concerns about this well and how it is being reported in a very misleading manner, and since then have written about 10 detailed posts evidencing my concerns. La-106 found excellent pay zones, especially in the lower Logbaba sands, but we unfortunately never unlocked them. The initial reported 22MMscf/d was very misleading in hindsight. In the 2015 Finals we were clearly told, 'GDC successfully completed remediation and perforation works on well La-106 in early 2015 to unlock further gas supply from the upper zones of the Logbaba structure.' But then Blackwatch surprised us all with, 'In La-106 the Lower Logbaba reservoir quality appeared to be reasonably good, but the formation was very heavily damaged during drilling and while sustained flow was achieved the flow rate was low, in the order of 0.5 Mmscf/d.' No wonder it has been written off! And has never been a reliable back up well, something very much needed. La-106 did serve one purpose it allowed us to book a major upgrade in reserves, just we haven't been able to utilise them yet.

Remember we were told that La-107 is targeting an increase of 32 bcf of 1P reserves. Let's see if we meet this target once the data is available. And that at La-104 the total amount of pay sands was 85m (65m from the Logbaba sands and 20m from the Mundeck 'tail' depth) at a final TD 4172m.
bigsmoke
Posts: 3,788
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Price:60.00
KYC (on iii) part 1
Today 19:12
There seems to have been quite a mixed reaction to the Prelims across the BBs. And some good posts discussing the good and bad.

CURRENT DRILLS

The decision to wait to do the sidetrack of 108 while engineering work and well redesign (shouldn't need any extra permitting, as hopefully was a contingency of the original submitted documents) are completed, as well as some analysis of initial data is completed, makes good sense. However, as Temu points out on 13/4 we were told:

'In late March, a cement plug was placed in the 8½" hole and preparations made to sidetrack the well to re-drill the Logbaba Formation and complete La-108. The side track drilling to a target depth of 3,563m MD (3,200 m TVD) is ongoing.'

The 'preparations made' and 'side track drilling to target depth is ongoing' made it sound like La-108 would be completed first. The estimated TD was 22-25 days ago according to my calculations, had they actually been drilling La-108. So the fact that they instead have skidded across to La-107 and have been carefully drilling through the key formations there is great news; and reassuring.

So presuming 40 more days of drilling instead of 45(since 13/04), and that we are drilling at a slower more careful rate, we should have about 300m left until we reach the first TD of La-107 at 3200m. There was 1582m remaining to drill to reach that point. So depending how quickly they got on with it, we might hear in about 2 week's time that 3200m has been reached and whether or not they will stay and drill that extra 1000m tail section to 4200m.

We were told in the Prelims, 'Planned completion of the wells is now Q3 2017, but it is expected that the wells will be under test before this.' If that can be interpreted as both wells will be under test before Q3 then that is very positive indeed. 4 more weeks to complete the drilling and start the testing unfortunately doesn't leave much time for the tail.

I personally hope they do go for the Mundeck Formation tail as LA-104 encountered 20m of good gas showing beds, which weren't unfortunately tested. As Blackwatch say, 'The Mundeck Formation has the potential to provide significant upside in Logbaba.' Indeed they model two potential and actual reservoirs that are equal in combined size to all 7 Logbaba beds above, and target oil and gas. And at La-104 sand quality was shown to not decrease with depth. Porosities of 16 to 17% and permeabilities of hundreds of millidarcies have been found. Remember the prospective area of the Logbaba Mundeck is 4.25 km2, it is assumed to have a net of 30m (80% recovery factor) of pay zone at the mid case and:

Low case: 10 bcf/km2, prospective 34 bcf
Mid case: 35 bcf/km2, prospective 119 bcf
High case: 90 bcf/km2, prospective 375 bcf

Worth noting at this point for comparison and future reference:

A few km to the north is the 'anomaly' aka Lead A. The data (given for the first time) is even better with:

Logbaba formation:

Low case: 73 bcf
bigsmoke
Posts: 3,788
Off Topic
Opinion:Strong Buy
Price:60.00
The oracle speaks...
Today 19:12
"We are entering an aggressive and expensive exploratory phase, which if successful will transform VOG in ways no one has begun to think of; the stated ambitions for 2021 are actually too conservative imo."
bigsmoke
Posts: 3,788
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Opinion:No Opinion
Price:60.00
RE: What ever happened to
Today 19:11
Mr photo - could be a good time to buy back in?
bigsmoke
Posts: 3,788
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Price:60.00
RE: Sloth drilling
Today 19:09
lol - nice one The brancher.




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