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88e & PANR
Disclaimer: I have a foot in both oily camps and so I'm going to post the same on both Chat Forums.
One pint on the table in the pub is being shared, one bloke has paid for a quarter of a pint and the other three quarters, they have two straws. The first bloke drinks half of the pint, more than he's paid for, and the other is immediately pi88ed off. There's an argument. Analogy starting to materialise?
Smacks of a shared oil reservoir resource. Is there a physical possibility that one could pump out more than his entitlement of the shared resource? Is there legal precedent for similar situations around the world? Are joint ventures commonly entered into in such circumstances? I can't believe that it's everyman for himself and he who pumps fastest gets the lions share!
Genuine question. Any takers for an answer?
I genuinely think they must be having the same thoughts and discussions between themselves. We know both companies have differing structure and divide, however the fact of a shared resource does lead me to believe some form of collaboration would make financial sense.
Imo obviously.
I would not rule out an enlarged working unit, but...
Shared surface resources would be beneficial to both.
11:21
There is a protocol, but unsure if already discussed on this BB, going to suggest 88e Wiki, but sure Brom would have highlighted if on there.
13:34
There are plenty of precedents for co ownership of working units but nothing is in the air as far as I am aware, sure though there is probably more animosity on the boards than between the two companies at the end of the money will talk :-) Attached is a little historical but gives flavour of how the units would work.
https://dog.dnr.alaska.gov/Documents/Publications/Leasing/AnnualReports/Section3_2004.pdf
14:06 sorry for that rubbish grammar
Brom so true …….
“there is probably more animosity on the boards than between the two companies at the end of the money will talk :-) “
Most oil workers are contractors and shift from one company to another. I’ve worked for them all
“Shared knowledge and experience in oil is the norm”
Ah well, I made an effort to have an open debate on a common subject matter, but if animosity must prevail then so be it!
Unitization appears to be the answer.
If only that was the case amongst the vehicle mechanic/maintenance trade!
15.03
It seems the post has avoided animosity so far. Perhaps you have fueled food for thought, and the reality of a joint venture might not be that too far fetched for the outspoken to comment on or indeed dismis.
An explorer and a producer sitting on different parts of a world-class resource?
Seems they would have more to gain through collaboration than the whiny bulletin-board heroes would consider.
Why would a joint venture benefit Pantheon? If they are successful their estimated resource size would indicate there would not be much benefit from working with 88e in the early years. They have suggested they have the lion share of both Theta West and SMD-B lie in their acreage. A JV now would perhaps complicate an early sale and would need to be very one side given the relative spend on seismic and appraisal in the central leases. If 88e do have a significant resource size in the central leases the dilution involved with chasing a play ~100miles from TAPS must surely be questioned.
Very true GS. Almost certainly will be some collaboration. No room for spiteful mirroring of LSE bulletin boards.
GS
Can’t imagine there’s too many local pubs in the area either to avoid each other. Haha.
The whole debacle of you know who downplaying 88e ( together with his little tripe hounds) so that their golden tickets can blossom without the noisy neighbour stealing their fertiliser is completely laughable. If you are putting money on the table at the same time as starting a fight it’s a far riskier play than putting money on the table and starting a meaningful discussion with neighbours. This is why I am invested in both. They need each other.
GS
GS, I would be interested to hear why you think Pantheon need 88e? At best I can see how the Icewine drill data may be useful, but Pantheon already have data from 5 penetrations of the SMD-B and 2 from Theta West. 88e have no proprietary seismic or flow test data in the central leases. Pantheon have more North Slope experience in the management team. So why do Pantheon need 88e? I can see the other way round as it looks like 88e may only have the fringes of Pantheon’s plays and therefore may not be able to develop on their own. Genuine question
00.43
The aim of my original post was to explore possibilities and to ask a genuine question about what happens when a play spans lease boundaries. Typical of you GS to bring it down to angst and bitterness.
Keep taking the pills!
06.30
Rabito, I actually agree that Pantheon don't need 88e and development timelines could conceivably be extended if some form of agreement was needed. It was a genuine question about the legalities of ownership in such a scenario. I suspect that unlike, say groundwater extraction in an aquifer, the lateral flow is so small given that the oil is within the rock, that the question may be superfluous, hence the need for grids of multiple extractions wells in relatively close proximity. Perhaps the experts can answer that one? Again, not an expert, but genuine questions.
At least we have a debate going about the shared resource and its potential implications, which is being addressed by a broad cross section of people here who appeared somewhat reticent in acknowledging its existence.
06.30
You've answered your own question Really. Delineation is very much a need for all major finds. Unfortunately 88e were really focused on unconventional at the time of their icewine exploration. However, they keep records and samples as required. PANR may not necessarily care how far under 88e acreage their discoveries extend. But investors in their story will absolutely want to know. They have no choice but to discuss, cooperate and develop together. Any shared infrastructure will also keep the greens, the state, the cost, and profits all looking better than they would otherwise. In my opinion. Take it or leave it.
GS
I love this BB
Cbaron arguing with himself :))))))
Does anyone really think that it’s not in both parties
to come to an arrangement?
Imagine how long the litigation would drag on for!!!!
Years maybe ….. who the F would buy it if pending
Issues are still ongoing
We no longer live in “I drink your milkshake era”
Wed 14.06
Thanks Bromb. The doc posted encapsulates most things that any investor needs to know about 'unitisation'.
I suppose there has not been any application for unitisation lodged, which may be refused until the Southern extents are known? Just a thought.
GS
This was an interesting thesis I found on the importance of unitisation.
https://sites.duke.edu/djepapers/files/2016/10/emily-bailey-thesis.original.pdf
No explorer on the North Slope will get away without addressing points raised in these types of reports and abiding by whatever laws or potential new laws are planned. The Bods of both parties would be slated for any ignorance imo, especially given their recent declared awakening to ESG stuff.
GS
11:07 I have no knowledge of any unitisation applications.
In respect of pooling arrangements there are long established principles and case histories
http://www.legis.state.ak.us/basis/statutes.asp#31.05
But we are probably leaping well ahead of ourselves here :-)
11:36 Lease application form is explicit.
https://dog.dnr.alaska.gov/Documents/Leasing/SaleDocuments/NorthSlopeFoothills/2021F/2021-04-21_Lease_Form_DOG_202104.pdf