Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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BUTD
Yes that’s correct, £16m will be used to repay LOG
GG
Thank you GG for your clear explanation of what is (or may be) happening below the seabed. I am a Marine Operations person and it is always nice to hear more details about non-marine ops matters.
A little bit of background for those who are unaware of the original discovery and the reason behind the 63% COS figure.
Exploration well in block 48/23-2 was drilled by ARCO in 1984 and the Harvey field discovery made, proving a gas column of 30ft at that point.
The Harvey discovery lies approximately 14km from the IOG owned Thames Pipeline.
Geotechnical and Shallow geophysical surveys, Pre Depth Stack Migration (PDSM) and 3D seismic surveys were carried out by IOG in 2016.
In 2018, further detailed reprocessing of PDSM and 3D seismic significantly improved the reservoir imaging, giving an expected gas column of greater than 200ft. (Initial discover 30ft which transpires to be near the reservoir extremities)
The above will have given the geophyical experts the reservoir target for the Harvey Appraisal well and potential upside that may deliver, hence the 63% COS figure.
Just a few points, there is a risk with all wells that the proposed target will not deliver expectations but they know there is a commercial discovery from 1984 so its all about finding the optimum reservoir location for a production well.
The objective here will be to gain a better understanding of the reservoir and its extremities.
The RNS states up to 60 days in the success case, this is an example of where if unsuccessful the well will take less time as there will be no well test to be carried out.
I would expect that even in the success case the well will be P&A, Plugged and Abandoned and the vital information gathered during the drill and subsequent well test used to model or confirm the optimum seabed position for a NUI platform and a production well to be drilled into the reservoir target area.
The vertical appraisal well is designed to gain key information to calibrate development design, however production wells will have long horizontal sections through the reservoir for maximum interface in the gas column.
The well was spudded on 6th August therefore we should hear the news by the end of September in the success case (which includes coring and well test)
CalE are paying a £40m initial cash payment as part of the 50% Farm-out and depending on Harvey appraisal results have the option to acquire 50% of Harvey which would generate £20m further cash payment with additional royalties to IOG thereafter to a limit of £61.3m if IOG achieve the 129bcf estimate.
That would give IOG initial cash payments of £60m if the above were achieved and our current market cap is £66m.
Exciting times ahead
GG