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Before we get a drill in the ground there are no guarantees.
The geology looks good.
The proximity to known oil shows is a positive.
I look on the positives.
That said, we could drill. Hit the target. Have no drilling issues. Still find there is nothing there worth going after.
For any new readers this is a real possibility.
There are lots of LTH here, myself included, that like the BPC story. They either have confidence that the drill - if/when it happens will prove the presence of commercially viable oil. Or they see the gamble as worth the risk.
Do not be drawn in or caught up in the hype, do some research. Or if you are a gambler, have a flutter. But do so in the knowledge it could go wrong.
Remember we have a lot more than ust Perseverance. SWP is looking very productive for example, then Suriname and Trinity
I am very skeptical that this Perseverance well will yield an excellent result. But I hope for the best and prepare for the worst.
I don’t ? I was questioning PetroleumInvestor’s comment
‘But I am fairly confident BPC will strike oil but guarantee it won't be a commercially viable field’
'The Riceman' - How do you know it won't be commerically viable
Guarantee it won’t be commercially viable ? What’s the basis for your guarantee PI ??..
Findme,
I hope so, I really do but if you aren't realistic in this world of penny oil and gas stocks you are just plain silly.
If they can get this Saffron well producing and get the income from these oil wells in Trinidad then things may improve gradually. 45 bucks per barrel is great given the climate in my opinion. But I am fairly confident BPC will strike oil but guarantee it won't be a commercially viable field or structures too complex to exploit. Then after that failure they'll stall for another 5-6 years and build up hopes and promises on their Uruguay licence which will yield nothing and SP will be hanging the same price as it is now. I have to play devils advocate...because BPC have delivered f'all in years.
Are you posting as PetroleumInvest or Christ Almighty, if the latter then I am out.
Seriously, there are some doubts and many companies have traipsed through the data room but I do believe the 3D information does show promising results. Merging with CERP, which I was against, could be seen as a saver. So at present the jury is still out and will be for some time. In the mean time CERP's assets could add something to the SP. I still think the Jury will prove friendly towards us.
'There hasn't even been a hint of a farm out to a major'
That was the only thing that I found myself disagreeing with.
Starchild....you are in fairy land.
I work in upstream oil and gas and I know what I am talking about.
You folks seem to have forgotten that Perseverance most likely will not find oil. Hence the 30% chance of success. So prepare for disappointment. You shouldn't even be thinking of an FPSO let alone profits from a well that hasn't even been tapped in to. Let them drill for Christs sakes and stop talking about fairy land things. There hasn't even been a hint of a farm out to a major which leads me to believe they probably know there is no oil down there. I hope I am wrong but they drilled nearby offshore Cuba and found f'all. Again, all you should be focused on is BPC ensuring Stena get that drill ship mobilised and have the damn funds.
Christ almighty.
IK - I love a bit of Pangaea with marmalade in the morning
Starchild, ok noted. See what I can come up with at the weekend.
Minimil: thanks. Look forward to your analysis. Of some relevance to the net profit (when it comes to future dividends, rather than your analysis)............. AIM companies managed outside UK, HQ'd on Isle of Mann, pay no corporation tax. Bahamas has no corporation tax either. BPC royalties to Bahamas Gov if they find oil is between 12.5% for 75,000 barrels per day to a peak of 25% for 350,000 barrels per day or more.
Starchild
Hi Starchild, I will try and work out some numbers but there are several unknowns atm relating to the fixed costs of production assuming there is a commercial find from P1. Other factors are the quality of the reservoir itself. Sweet, no or low water cut, 35-40 API, low GOR would be ideal. Then there is the question of how the taxes/royalties are paid to bahamian government. A break even cost per barrel can be calculated and potential profits worked out from different POO prices. They may even hedge at the beginning who knows. One step at a time find it first, establish commercial viability and make a plan to produce.
Star - as ever good post - very hard worked and informative.
I would advise folks to DYOR on geology and research GONDWANALAND.
I will discuss further for those not getting the point .
GL
IK
XX
Bynari’s informative post yesterday evening discussed the use of floating production storage and offloading (FPSO) vessels. It was based on Simon Potter’s 2019 presentation https://tinyurl.com/y6q669bg
And a link describing how FPSOs are the future of the offshore oil and gas https://youtu.be/b1VlsaMdX-Q?t=82
I looked into this further. The largest FPSO ship in the world cost $2-3b to build and reportedly $1m per day to lease. See https://www.offshore-energy.biz/report-petrobras-to-launch-tender-for-brazils-largest-ever-fpso/
Yet it can hoover up 220,000 barrels of oil a DAY.
If BPC leased a FPSO for $500k per day which could process 100,000 barrels per day for 80% of the year (the other 20% for delivery of oil, maintenance or escaping hurricanes), this would cost $500k x 365 = $180m. 100,000 boe x 290 productive days = 29 million boe per year. 29m x $45boe PoO = $1.3 billion/per year. Deduct 25% Bahamas gov royalties and $180m/year lease costs leaves a gross profit of $800 million per year. That’s a lot of dosh which will be irrelevant as a major will likely buy us out by then.
Disclaimer: I am no expert on FPSOs and the above figures are very general. Feedback welcome.
Question: Based on this potential, even if I am substantially wrong on the figures, do you agree the SP is severely under-priced at 2.8p?
Starchild
xxx