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It’s not an appraisal, it’s an exploration well that may prove connectivity between the two fields. However personally I feel more confident that it’s only a km away from a discovery, although after P1 we all know what a difference a km makes! It’s a 50/50 well with the trades having the safety net of the third well. I would double down on a bad result and I think I would be able to get out break even pre drill 3. So as long as you don’t panic or let emotions rule then I think it’s a drill worth being in at this SP.
You make a very valid point regarding the Liberator CPR .
Alexio posted on ADVFN the other day that our 11.7mm 2P reserves will / is being marked by 80% because of the LP2 Drill. Which made me re-read the CPR and check what is exactly on the table. Bloody hope I read it right lol ...
Thanks @BBN - I took the time to read and pick through the CPR for Liberator yesterday. I think that there is some evidence to suggest that the risks on the last drill were actually discussed in that document - I suggest anyone interested should read it and form their own opinions. I am additionally reminded of many of the reasons why I like the look of this drilling campaign and I'm actually looking forward to the next Liberator drill even more than I am this current Serenity drill.
Either one has the capacity to rapidly and significantly inflate the share price - but the Liberator one with ease and proximity for moving rapidly to production is really exciting.
Ophidian
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I3E's right to do so is being pulled up on that fact the well data employed to assess the prospect, sits in an adjacent block, whose lines have, in part, been decided by the historical ownership and relinquishment of the blocks in the immediate area.
I3E are 2.5km from the nearest discovery that tests the reservoir, they believe the Serenity prospect forms part of. However, there is further modelling that supports oil having migrated to Serenity (and Liberator Extension), even if the connection between the 2 blocks (Tain and Serenity) turns out not to be true.
Yes WH Ireland attach a 56% COS to the Serenity "exploration prospect/appraisal" but there is significant evidence to support an understanding as to why I3E, consider it to be 72% as well.
Nobody has questioned CORO's COS on Tambak-2 because they haven't had a failed drill in the lead up to it. Other than that, the I3E prospect has a lot more going for it, in terms of modelling and closer proximity (1 to 2.5km vs 13.5km) to 3 successful drills/appraisals, yet because of a failed drill that has yet to be fully reported back on, it is all written off and everything must be proved once more.
Whether Serenity is a success or not, this whole experience goes to show just how quickly very extensive data and analysis, and the respected parties that helped drive its production, can be almost completely written off, through a perception that is driven by a perceived failure, despite the fact that the data demonstrates that to not be the case.
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Good morning.
I am also a shareholder in CORO, who this week announced the results of their Tambak-2 appraisal well on their Duyung Production Sharing Contract ("PSC") in the West Natuna basin.
The well was a 13.5km step out from the original discovery and carried a 75% COS.
On the CORO website the company states the following ;
"Identified exploration targets, both above and beneath the field, include the Tambak prospect (scheduled for 2019 drilling) with mid-case prospective resource potential of approximately 250 Bcf and a chance of geological success ("CoS") of 45% and the Mako Shallow prospect with mid-case resource potential of 100 Bcf and a CoS of 75%"
Note the use of the words "exploration targets" and a "prospect", yet the Tambak-2 well is stated in the presentations and the RNS from 15th Oct, as being an "appraisal of the Mako gas field."
Of course this well was a step out within a field that sits entirely within the CORO owned (15%) block. However, as is always the case, they will have employed the well results from the previous 4 wells drilled in the block but in the main, the Mako-South 1X well, which is the well that cored and tested the reservoir.
So in essence, we have an appraisal well that is 13.5km from the original discovery well, that is identified as an exploration target, and carried a 75% COS.
I3E in S1, have also employed a mixture of the words exploration/appraisal well. Their "prospect" sits 1km away from the nearest oil discovery and just 2.5km away from a well that was employed to test the reservoir.
I3E believe that the Tain "discovery" is connected to the Serenity "prospect" making them effectively 1 reservoir.
In addition, WH Ireland confirm the belief that the Paleo model created by I3E, that "tracks the geological history of the region", demonstrates that "for the prospectivity of the both Serenity and the Liberator Extension, during the most relevant geological times, the region's dip orientation to the South was steeper."
"This would have encouraged oil migration from the Blake field (where oil is known to have been present) to the North and in particular towards Serenity and Liberator Extension prospects."
"By implication, even if the current structural maps are modestly inaccurate (and there is no oil communication between the relevant fields, as I3E has modelled) oil should have filled Serenity and the Liberator Extension during the Mio-Piocene."
Because I3§ have had a perceived failed drill on the LIB phase 1 area, the COS is understandably being questioned.
However, as the CORO example shows, other companies out there employ the very same wording as I3E have done. Other companies call a 13.5km step out in the same field, an appraisal.