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“ That is the big worry, and is why the SP is where it is.”
Exactly, but people always prefer a good conspiracy theory!
malrees
As well as Clare Slightam, there are other geos at HUR still, (afaik) who have cut their teeth on FB under Trice. Daniel Bonter is one who has papers to his name, tho I don't have the links to hand.
On the one hand, they will possibly still think in Trice mode, if you like ; OTOH, they will retian all the knowledge of why the Trice monel was considered robust for so long.
I agree with many on here pointing out that the Trice model is not yet entirely disproved. But the results of WD, WW, and the well behaviours of the last few months, do throw a lot of doubt on it.
I suspect the BoD will go in a cautious direction after September, modelling a higher OWC.
But without more drilling, the jury will remain out ; unless, of course, well performance deteriorates further.
That is the big worry, and is why the SP is where it is.
ronok,
Claiming, providng and evidencing a higher OWC and hence a downgrade in reserves and resources - would mean that majority of the uncertainties regarding production would be derisked, obviously at a price (reserves). For example:
- Market won't be "hoping" for the watercut to go down. Because it becomes a certainty due to higher OWC and the wells drawing on the aquifer.
- Market won't expect 20k bopd at this stage because of the higher OWC and hence downgrade reserves and therefore production becomes a certaintly, although a much lower level with increasing watercuts.
- If OWC is high and it can be strongly backed up with evidence and production improvements - it still provides an opportunity to explore and develop these assets (although with reduced reserves) and therefore may still attract JV partners.
- Eliminates the talk of aquifer and perched water. Because right now, it seems like it's both that's affecting the production.
ALL IMO. Slift.
malrees
Thanks for that info.
Clare Slightam has been mentioned before in that role.
The fact she is still there and in an important position is interesting.
How much say Clare has had or still has in the oil/water contact level would be good to know.
It would also be good to know her personal view of the level.
There were so many specialised people and firms involved in the assessment that I believe one person would only have a relatively small influence.
The person with the biggest influence in my opinion would be Dr.Trice.
Apart from his F.B experience and has standing in the industry he was a ‘hands on’ geologist looking at rock samples on the rig and no doubt in touch with the drillers etc. as work progressed. [wonder what his thoughts are on the o/w/c. level]
The big question is are the original findings on the o/w/c level going to be commented on by the present BOD and if they present a different version now a detailed explanation has to be given.
I feel for the shareholders who have bailed out under all the uncertainly with loses in their investment.
I have not sold out, time will if that has been a good move.
Thanks again for the info. good to get it into the mix.
Ron
Stu255,
The EPS is already planned to 'run' for a minimum 6 years, with possible extension to 10.
BB,
"lower OWC model is the only way they can negate this requirement?"
I think that maybe possible! No further non producing commitment wells would be a good outcome, even though at the cost of a reserves reduction. The reserves would still be huge, and they are currently of nil value in the sp anyway! As long as there is no practical impact on the longevity of the wells!?
it is a difficult one as it seems either trice or the new board have got it very wrong. either way it is not great for shareholders.
but hopefully all priced in now anyway.
the eps was always about gathering data for a ffd. now there are some doubts until tech committee and CPR reveal all.
first step is getting production back up and running. then the tech committee and forward plans. then CPR next year. I can't see it being sold until after CPR anyway.
"And those well logs are as close to empirical evidence as one can get."
I suggest the 1,000's of barrels of water sloshing about in the separator is more empirical than all the well logs put together.
For the same reason I think we should scrap the commitment wells and extend the EPS.
The EPS should be run until all questions on WoS fractured basins are answered.
It is in everyone's interest to continue this exercise.
It's technically prudent to do so and is just a happy coincidence that the EPS is cash flow positive whilst the commitment wells are cash flow negative.
I also don't think an OWC model makes much sense in a fractured basement where you have huge vertical features with 1,000's times the permeability of the surrounding rock.
The concept of coning is also misapplied, it's not a cone it's a huge vertical sheet of water in a super permeable feature. The water will drop away down the fracture feature much faster than coning in a sandstone.
I think this makes it very difficult to decipher reserves for accounting purposes using conventional methods, but these wells are prolific and the cash flow is very real.
Wells are still thundering away after 13 months.
Increasingly, fractured basements are not something that is easy to ignore. This is merely what a learning curve looks like.
isn't the simplest reason twofold 1) WC in FB is difficult to predict accurately as it may change? 2) New BOD wants capital discipline and spending money on commitment wells to meet license commitments would put them in a hazardous position so balance sheet conservatism so a lower OWC model is the only way they can negate this requirement?
Ron...
Clare Slightam the fractured basement geologist, has been working on the Rona Ridge fractured basement for 15 years. there has been no suggestion that she has left the Company. She is joint publisher of some of the papers. All being well, she has all the data and understanding that RT has and is still employed as as Subsurface Tech Director I believe.
hole-in-one, Ron OK.
Several other posters have written/alluded to pretty much the same thing: Is there the most monumental of Fox-ups, deliberate lying (hubris, as WellWell would put it), or subterfuge, at play here? Both sides cannot be correct. Explanation please, HurBod??
gla
gla
adoubleuk
Fri 15:47 7/8/20
However, it's not just the 'model' in question, and that's what is so strange. Three vertical wells were drilled with the express purpose of determining OWC: the Lincoln discovery, Lancaster 7 (the 'pilot') and Halifax. These wells were wireline logged by Schlumberger, and the log analysis will have encompassed hundereds if not thousands of man hours by people expert in such analysis. Not just Hurricane people, but Schlumberger, and also the compilers of the CPR's.
And now, all of a sudden, some people have come along saying that all those thousands of man-hours were spent barking up the wrong tree.
And those well logs are as close to empirical evidence as one can get.
Was about to make up a post at the weekend and cover what adoubleuk has said above in very detailed way. My remarks would have been very general as I do not have an oily back ground.
Will use his post above with all credit to adoubleuk.
The reserves have not altered in any way apart from a small % produced at Lancaster.
What we have is:-
[1] An assessment of the reserves by Hur’s technical teams, specialist contractors, geologist and others vetting Hur’s test results etc. and producing a CPReport. Also Dr.Trice an eminent geologist expert on fractured basement with extensive ‘hands on’ experience of the Rona Ridge.
[2] An alternative assessment by a post Dr.Trice technical committee, new CEO etc.
There are experienced geologist in Hur at present. What is not known is if there are any experienced in Fractured Basement plays. Shareholders should be informed of this.
I see this as a serious situation. People and firms involved in the original reserves assessment [which were about to be increased in Lancaster] have their competence and reputations put in question. What they intend to do about it I don’t know.
The present Hur management also have their competence and reputation put in question. They have presented an alternative oil/water contact level without addressing the results and findings of Hur’s previous investigations. In my opinion this must be done.
It would be very much in Shareholder’s interests for the parties in [1] to confirm or otherwise their position on the reserves and comment on the present situation.
While I agree with the new BOD’s policy in conserving funds in the short term their unsubstantiated comments on reserves has undermined confidence in Hurricane Energy.
Shareholders have had a bit of a shock with these latest RNS statements and worry as to the value of their investment. Some have stated they have sold their shares at a substantial loss.
All as I see the situation.
Ron