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Probably latecomers pulling their cash when their quick trade didn't work out. At lot of us have been here a long time and know exactly why we invested. Hopefully Sapote does the biz and gives us the news we've been waiting for, and if not we have plenty more rolls of the dice to look forward to. Best of luck everyone.
All looks good to me. Downward pressure before results and no real volume!
AIM punters seem to be writing Sapote off, presumably based on news not coming quick enough. Boy, do I hope they're wrong! Hard cheese, if so. Can't help but feel we'd already know if it was bad news though.
Hi Phoebus, thanks, that's extremely helpful. I hadn't thought of looking through Westmount info. At least I now know why I couldn't find the CPR - it hasn't been published. I've been patiently (and not so patiently recently) holding since 2017, should have sold late 2019! One day...
https://www.westmountenergy.com/download/2020-12-01%20Westmount%20Corporate%20Presentation./?wpdmdl=1062
https://investegate.co.uk/westmount-energy-ld--wte-/rns/commencement-of-drilling-operations-at-jabillo-1/202103090700065614R/
https://investegate.co.uk/westmount-energy-ld--wte-/rns/final-results---notice-of-agm/202010300700096941D/
Hi Keith. Canje is not the easiest licence to find info on, but take a look at WTE's 2020-10-30 finals RNS. WTE has a 1.26% stake in Canje.
'As previously reported, JHI is a private, Ontario-registered, company established in 2014 and focused on oil exploration opportunities in the emerging Guyana-Suriname Basin. The company's main asset is a 17.5% carried interest in the Canje Block covering over 4,800 square kilometres, offshore Guyana. This block is located adjacent to and in the same geologic basin as the Stabroek Block which has delivered eighteen substantial oil discoveries since 2015, with reported discovered recoverable resources of approximately 9 billion oil-equivalent barrels to date.'
'ExxonMobil, which is the operator of both blocks, acquired in excess of 6,100 km2 of 3D seismic on the Canje Block in 2016. Subsequent processing and interpretation of this dataset has been used to define a substantial prospect inventory on the Block with three prospects (Bulletwood, Jabillo, and Sapote) high-graded as potential targets for the initial drilling campaign. A 2018 DeGoyler McNaughton Competent Persons Report on the Canje Block remains unpublished. However, the block is reported by JHI2 to contain more than a dozen prospects in the Canje portion of the Liza play fairway, representing more than 10 billion barrels of prospective recoverable oil resources, with a number of the prospects exhibiting the same DHI (Direct Hydrocarbon Indicator) characteristics as the neighbouring Stabroek discoveries. As a result of a 2018 farm-out to Total, JHI is carried for the drilling of up to four wells and is funded for the drilling of additional wells.'
Some adjustment needs to be made for the Bulletwood and Jabillo results. I have Bulletwood down as 500 MMB and Jabillo as 1.2 BB and subtracting that from the quoted 10BB figure for the whole licence gives a minimum figure of 8.3 BB yet to be drilled including Sapote. As you indicated ECO's 1.75% of that equates to 145 MMB recoverable.
Not sure where I got the 1.2BB figure for Jabillo but page 10 of WTE's Dec 2020 presentation has Bulletwood at roughly 500 MMB and Jabillo at 1000 MMB and this Jabillo figure is confirmed in their 2021-03-09 spud RNS. As a result the actual figure looks to be slightly higher at 8.5 BB or 149 MMB net recoverable to ECO for remaining drill targets on Canje including Sapote.
Also, I'm not sure Bulletwood is a complete right off. If it is a sub commercial discovery as per Tanager-1, that might change if other fields are discovered close by, though obviously it would be a lot less than 500 MMB.
Hi Phoebus, re your post last Friday, repeated for Monica on Saturday. You state that "ECO's 2U net recoverable exposure on the Canje block is roughly 145 MMB". That implies 8.3Bn barrels recoverable on Canje, given that JHI has a 17.5% interest, and ECO has 10% of that - i.e. 1.75%. I have looked through a lot of relevant websites, RNSs and news releases, but can't find any published estimates of the Canje resorces at all, let alone 8.3Bn bbl. Can you let me have a link, please? Thanks in advance - Keith
Thanks Phoebus! V informative on ECO - wouldn't westmount be a better buy then though?
Money talks, even..
If Sapote-1 did come good, thus giving further substance to the possibility Canje holds significant volumes of hydrocarbons, there could well be developments in who holds what - particularly in regard to JHI. Money take so I’m not sure how that might pan out if there was a juicy offer.
Great thinking. Don't forget to factor in the cash on JHI's balance sheet.
Come to think about it, we value eco's share by counting boe's but the way to value it is by valuing jhi, a discovery at sapote could mean 200m boe to jhi, thats at least 1b$, if eco has 10% thats 100m$ on sapote alone with 12 wells to follow, some are follow up prospects with 80% cos, and 6 wells funded.
This link to the Canje 12 well project summary should work.
https://www.epaguyana.org/epa/project-summary/summary/5-project-summary/770-canje-12-well-project-summary
No problem Monica. Gil will be waiting on Exxon and JHI before he can give further details, but here is the link to the project summary which was posted by the Guyana EPA on August 8th. The table on page 6 clearly indicates a 12 well exploration drilling campaign on the Canje block starting in Jan 2022 to Mar 2025, so not long to wait until the next well.
https://www.epaguyana.org/epa/project-summary/send/5-project-summary/770-canje-12-well-project-summary
ECO mentioned it in their Aug 31 RNS and have also tweeted about it.
https://investegate.co.uk/eco--atlantic--o--38-g--eco-/rns/results-for-the-three-months-ended-30-june-2021/202108310705071104K/
https://twitter.com/gil_holzman/status/1425770453654810624
A far as i know jhi has 67m$ on vompletion of the eco transaction, that 5 more wells, so they have sapote funded and 6 more, after a few discoveries the can ipo through rto with wte or eco and raise at a value of 1b$ easily..
A lot depends on what JHI do - ECO (same as WTE) only have a shareholding in JHI. So their interest ends when JHI sell out.
And JHI are only carried for the drilling of up to four wells - Sapote-1 is the third of those four "and is funded for the drilling of additional wells." But probably not 12 - they had net assets of $46m at Dec 2020 and ECO paid them $10m for their shares. I'm guessing their 17.5% cost per well at $10--15m each? (Kawa-1 estimated at $85m total). At some point, They'll need to raise some cash or sell a stake or ..?
Their website says "Assemble a team of successful professionals with proven track records of RAISING CAPITAL, finding and developing oil & gas resources" (my CAPS). Let's hope that becomes relatively easy!
ok understood..profuse apologies lol
Indeed. I keep forgetting about our Namibian acreage. For those interested, the wells are Total's Venus-1 on Blocks 2912/2913B, Shell's Graff-1 on Blocks 2913A/2914B and Azinam's Gazania-1 on Block 2B just over the border in South Africa. They are all due to spud Q4 this year. Maurel & Prom are also looking to drill Aurora-1 next year and that is surrounded by ECO's acreage.
I think namibia will create a lot of value here next year, the majors are linning up to drill some of the biggest wells world wide, a discovery will make assets at this basin much more valuable and eco holds 24000 square kilometer at 4 blocks, some are drill ready, thats like15 orinduiks..
Yes Monica, did you not read my post from 10:43 on Friday?
'... Exxon's 12 well Canje Block drilling campaign is scheduled to start this January. ECO's 2U net recoverable exposure on the Canje block is roughly 145 MMB. Due to the extremely low break evens I seem to remember Hess using a valuation figure of $7/B for discovered barrels on Stabroek. That equates to £736M or 368p per share net to ECO in the success case. Unlike Orinduik Canje has an operator with immensely deep pockets that is clearly very keen to get on with it. The risk is also spread across a large number of drills as opposed to one or two on Orinduik, so the risk profile is a lot lower. Clearly we would all like to see a drill or two on Orinduik, but make no mistake Canje can totally transform ECO's fortunes and there should be plenty to drive the SP here whilst we wait for Orinduik turbo charge the SP. By the time Orinduik drilling gets underway ECO may already have been completely transformed. ...'
In other words, starting with the current Sapote drill ECO looks set to participate in one Exxon operated well per quarter on the Canje Block for the next 13 quarters on the trot, each of which of which looks worth on average around 30p per share in the success case. That means that Sapote is just the first of 13 rolls of the dice for ECO on Canje. A discovery on any of those drills should completely underpin the current SP regardless of Orinduik which was itself being valued at over 20p per share last year even when drilling on that block was still expected to be over a year away. In my opinion ECO is in an excellent position, with a huge amount of news flow to look forward to going forward which will only accelerate when Orinduik finally gets the green light. IMO the biggest risk here is staying out too long and missing the first Exxon discovery and then having to pay a lot more to get in for a ride on the huge Orinduik drills. The risk reward here looks brilliant for an oil explorer and I'm very happy to hold.
pardon my ignorance...so are we part of that 12 drill campaign then ??
According to exxons table the next well in canje will spud december, followed by another 11 wells..
So, on a find what do we think ??...50p ? and then what ? The real action looks to be in Orinduik and nothing for at least two years there maybe longer. Cant imagine that'll be good for the share price.
They stated that on completion a flow test might be performed.
Phoebus, I think the ECO price drop is due to any drilling on Orinduik being unlikely before 2023. This has probably had a knock on to WTE who interpreted the ECO drop to be Sepote news related.
Day 60 of the Sepote1 drill scheduled to take "up to 60 days" is Tuesday or Wed, so fingers crossed for news this coming week.