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DC
Yes, that seems a possibility too.
And i think we've all rued the lack of an edit facility!
Would be nice if LSE gave you a 5 or 10 minute window to edit.
LSE please note.
Genghis
Just a thought but might the possible downgrade of contingent resource estimates be an acceptance that there is much more perched water pockets in the reservoir rather than just just a less optimistic O/W contact.
The water cut was disappointing but at the moment well within AM capabilities. The more oil that comes out the more it should be drained if perched - and I agree with ghengis that any change in evidence would have had to been communicated.
what is good is that with ESP on both wells can be operated at the same time. If they had been commissioned previously then we would possibly never had to deal with one well closing and the loss of sentiment and corresponding SP crash.
it is a shame that the SP has reacted today in the way it has. I suspect a possible up;ift to 7p will come in the next few days - as the news gets digested. We have seen it here before
Yobbo, in the absence of any comment to the contrary, HUR are still saying perched water. Given all the modelling, all the drilling that showed a much lower OWC, I an still inclined to believe so.
Unless the OWC is much higher (and there is no other evidence of that, afaik) it would have to be a helluva long downwards fracture to draw on the aquifer. Not impossible, but at this stage imho perched water is still the default.
I am still refusing to get too hung up about the water issue provided that it doesn't increase exponentially, they can manage it between now and next year when they drill some more producers. I still don't entirely rule out the perched water theory. 11% at this stage is a little disappointing, but compare that to the wider North Sea where for every barrel of oil that comes ashore there are now four barrels of water produced i.e. the Oil being a percentage of the water produced rather that the water being a percentage of the Oil.
thanks, daltry, i know.
my previous posts pointed out the downside risks, which have not come to pass. It is not all roses, and we need to see how the wells behave thru Q3. But we have avoided the worst possible outcomes, which were for WC to inmcrease dramarically, 7z to remain shut, and production throttled back. And Lincoln P&A'd.
The absence of those possible negative outcomes amounts to a huge plus as far as I'm concerned.
Generally positive RNS. At 15K and current oil price I see little risk of the bonds not being repaid.
There remains longer term risk from the reserves being material down-graded. However we already knew that on 8th June. Medium to short term the future of the company looks much more certain this morning.
Quite right , Genghis. Logical. Don't blame you. They just want someone to spit at........
Bt, when the facts change, I change my mind. What do you do?
Genghis youve changed ya tune
I should add that the field determination on Lincoln is also good news. Means no P&A ops this year, and tieback option still open, tho on ice for now bcos of Spirit situation. In turn, that means the Spirit contbn to AM debottlenecking is still possible.
I will likely post a more considered response later, when all the excitable newbies have calmed down and the bb less clogged. Meanwhile, I'll look to see iof the reaction upstairs..
I find this to be mildly good news. I'm optimistic that any further water cut will be easily processed, and the increase in production is not to be sniffed at. Will be buying again today.
You can tell the newbies, all decrying the WC.
I think this is quite a positive update given what it could have been, Production is up, 7z back online, pumps commissioned. b/e costs will have fallen accordingly. Noignificant capex in 2020 nwill bolster cash position.
The ongoing WC is not disastrous and perfectly manageable ; an increase in 6 was to be expecxted with 7z shut down ; sooner ot later thos water pocket should clear.
Thogh not universally positive, overall this is good news. Whatever happens to SP today, the future of the company looks much better to me today than it did yesterday.