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I can't see Jethro being 300-450m... Comparisons were made with hammer and that thing is a monster... Expecting between 600m-1b..
"The thickness [55m] exceeded our best estimate pre-drill expectations, so potentially it is a much bigger discovery than we anticipated."
Best estimate pre-drill was 32.2.
Hil talked about the excellent porosity and the sand body dripping with oil. He also mentioned Jethro was 20km square plus. Taking those into account has led some to look at the P90 expectations and apply an uplift for better porosity and recovery also.
Think Tullow then have him a kick in the balls as they are miserable and dont seem to like good news.
On prices per barrel, the 88p a share per 37m barrels I mentioned yesterday from Hannam note in Oct'18 is also $5 ish a barrel (around $5.50) so this is a good ballpark.
The uncertainty is frustrating for PIs as I can be sure the roadshow had more detail even if off the record or just heavily hinted.
Put it this way, $5 a barrel for what will be drilled (if success continues) by end H1'20 and $1/$1.50 per barrel for remaining prospectivity would lead to a very strong outcome.
Noix - I have mislaid a document that was post drill that had Jethro as 300mmboe as the low estimate and 450mmboe as the high so this interview is interesting. Gil also did an interview with Andrew Scott on 19/09/19 when he said, 'Big, very big Jethro discovery'.
I think Jethro by itself will come in higher than 40mmboe net but you have given me new information. P94 of the CPR below is where I get my thinking from but I will keep looking for that post drill document unless someone can help me out.
https://www.ecooilandgas.com/wp-content/uploads/2019/03/AIM2019CP-ECO-Orinduik-reporMar2019Final-.pdf
On the contrary 40 millon barrels is completely in line with the GH statement in his recent proactive interview, as detailed in my post at 15.28 yesterday. The only possible variable is that the amount that I've allocated to Hammerhead, of 16 million barrels, may be too high. It may also be too low and that's the whole point. None of us know and that's the fact that I'm putting across. The only real value that we have is that indicated by what the market thinks it's worth, currently circa $350 million. GH said in the interview he believes it's worth more. Parhaps you could explain given the comments of GH, how you arrive at this comment, giving sources and figures: " 40m is actually lower than the lowest estimate giving a 40 cent discount."
I've told you where mine comes from, the horses mouth, with an adjustment for Hammerhead.
I can accept a share price - that's a fact. But $5 for a barrel is the lowest price on the reasonability scale and 40m is actually lower than the lowest estimate giving a 40 cent discount. If you chip the figures like that then they are no longer real. Real will be along in a couple of weeks.
Quite and the reason for my post (s) on value is that it is so difficult to value a share such as ECO with the size of the potential prize. There are just so many imponderables.
That said, if we attribute 40 miilion barrels of discovered resources to Jethro and Joe and accept that the current share price has risen circa 80p since the jethro discovery, then the market is valuing that 40 million barrels at $4.60, which sits nicely with your $5 a barrel. There are all sorts of ways of looking at it :)
Total apples and pears! The Total deal with Qatar is utterly indecipherable as it is wrapped up with multiple asset swaps and sales between them. the only metric we have for barrels in the ground is the one one Gil quotes which is the value that Exxon gives its barrels in the ground, namely $8.
So, let's call it $5 to cut out some of the hype. I still think we are cheap. All those tertiary prospects de-risked and a whole raft of upper tertiary prospects to be added plus discovered barrels ...........and we haven't got anywhere near the Cretaceous yet.
Noix
Unless we.get sight of the true value of the Qatar deal with Total (including deferred consideration such as Total interest in Qatar gas fields) the any comparison is apples and pears.
I've made clear the sale is for producing assets I expect people can surmise that equates to infrastructure cost being sunk already. However, such assets are also much closer to decommissioning and costs to be incurred there compared to Guyana.
There are myriad variables but taking them into the.mix gives one an idea of industry prices.
ijwt
Your inference appears to be that the Neptune/Energean deal justifies the $8 a barrel valuation circulating in some quarters for discovered resources in off shore Guyana ?
This is a more detailed description of the deal and should be read in conjunction with the comments by Tullow's George Cazenove, posted by WilkCoutts below.
https://www.neptuneenergy.com/en/news/4172/
Are you not comparing apples and pears ?
https://www.telegraph.co.uk/business/2019/10/14/neptune-energy-pays-215m-north-sea-assets/
Adds 30m barrels (producing) and they have paid $250m for the privilege or in excess of $8 per barrel.
IJWT - just read your post again more carefully and see you mention the channel too. Whatever the case, feels like a treasure trove at the moment. Let's hope news lives up to the growing confidence.
IJWT - that puts your estimate near 90 then. I think there are a few on here who think it is closer to 100m than it is to 50m, hence some talking it down to fill their boots further. Unfortunately I'm not that smart - I just ploughed in because this is a fantastic opportunity. Still think I've got ridiculously good value at every price I've paid.
I reckon about 15% of Hammerhead extends and would envisage it is about 750m-1bn barrels.
I think Jethro is 350-400 with the channel same again and Joe is 100m.
Hammerhead needs to be getting close to a billion barrels to be 15m net to Eco - unless the overlap has been significantly underestimated. I have Jethro as quite a bit higher. Should be clear before Xmas.
FWIW, I've got 15m for Hammerhead, 37.5m for Jethro and 12m for Joe................and vast amounts of upside, 500-1 billion fresh prospects in Upper Tertiary, lower tertiary COS greatly improved.
£12 unranked according Hannam........I'd take a fiver a share very happily for Guyana asset, not sure Gil will though!
Itsyou
I think you're missing the purpose of the point, or maybe I'm not making it very well quite - likely the latter.
Hannam using their modelling valued the 37.5m barrels at 88p/share. That gives a handy metric to extrapolate to what we have found already and what we are yet to drill.
So we have found probably 25m in Hammerhead, 60m in Jethro and 15m in Joe.
We will then drill for another 180m net to Eco (or more) in H1 making 280m net. Compared to 88p for 37m barrels that makes 7-8x that per share value (less the issuance in April). Even at 40-50% of that we are talking about excellent returns for us as shareholders and not even valuing the remaining barrels.
Note - Hammam calc was before the fund raise.
IJWt,
That was in the good old days. Unfortunately things changed from what we were led to believe and in the Hannam note Sep 16th 2019, it says 2m net to ECO for Hammerhead/Aurituk and only 4p Risked
https://www.scribd.com/document/426042772/2019-09-16-EOG-v-hannam-Partners-Second-Discovery-de-risks-Development-and-Further-86211411
Just got diverted to the Hannam note from last October, who rated a 500m barrel Hammerhead find with 50% on our licence as 88p a share. So that is 37.5m barrems being worth 88p share to ECO. I'd say from Hammerhead, Jethro and Joe there is c.105m barrels currently net to Eco which on the above basis equates to £2.46.
Add the drilling to come (Jimmy, Jethro channel, Kannukku and Malone being c.1.2bn barrels or 180m net to Eco) and that is a further £4.22, making £6.69.
This apportioned zero value to the 3 to 4 billion barrels remaining after the H1 drilling plan. So taking $1.50 per barrel on 3bn that is $675m is a further £2.84 making £9.53 per share.
Updates should therefore be interesting as we sit at 140p.
We caught up again with Malcolm Graham-Wood who recently returned from his trip to Kurdistan
https://total-market-solutions.com/2019/10/14/malcy-talks-oil-gas-xv/