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It has been 3 months now, so perhaps they thought they had to?
Thanks Breq,
Great insight and explanation.
It makes you wonder why they didnt release an update when they had tested both the top and bottom?
Seems odd to issue an update on an unfinished flow test.
You lot make me laugh. Any way you can twist this around to find the positive. Talk about rose-tinted specs.
Personally I am quite happy to wait for further news from the operators. If they can get decent flow rates then it will be easy enough to buy in and if they can't, well I've got nothing to lose and I won't have to panic sell all over again.
Mcfcnige,
Sometimes it’s fixable, all depends on the specific circumstances.
As Ed says, they have almost certainly been testing the lower levels first and as we know it was the top 8m which flowed at 12,000 BODs.
Hopefully the historic flowing levels are the low hanging fruit. I’d test them and pull back the well to say 2,000 BODs to limit watering out. At 2,000 BODs the well will produce cash flow of $3m a month.
Just my thoughts.
Breq,
Possibly. This well reached TD, whereas TO-4 only penetrated the top 8m of the Binga. Oil companies test from the bottom up so you could be correct in saying that they've been trying to get the deepest parts of the well to flow first and spent the last number of weeks looking for a solution to that.
Regards,
Ed.
And look at BCE - Beacon Energy - more recently who claimed their drill was going to flow at 900bopd but they only managed 40bopd.; and look at Desire Petroleum in the Falklands who declared an oil find that turned into water a couple of days later.
Every dill is differrent.
Nige,
Bad timing for sure just before Easter break, but a lot of companies will release updates like this. They may need to do an acid squeeze or something similar on part of the well, but all we can do is guess at present. I'd assume they didn't want to take time to get this engineering work done or folks would have been shouting for an update if we hadn't got one by end of April etc, they do have to keep the market updated etc. More prospective zones in TO-14 yet to be tested, so its a wait and see. Hopefully we'll get more updates on the engineering work over the coming weeks.
You could be correct as these delays have put the timeline out now for sure and the company would be coming under more pressure to update. Maybe the could have held off a little longer, but perhaps that still wouldn't have made a difference. It may take weeks to sort out the issue they've encountered. I'm sure we'll hear in due course.
Regards,
Ed.
Look at JOG market update in Sept 2017, and then consequently update in following October. A lot argued back then how orchestrated the update manoeuvre was to let in the bigger party(ies). Price shot up over 400%!
I think the best approach is to claim to not have noticed or read the RNS and to see the drop as an unexpected buying opportunity - and by the way, that is me being sarcastic.
Hi Breq,
Are these kind of issues fixable?
All we know from the RNS is:
Things are taking a long time. Still testing TO-14. TO-13 testing not started yet.
TO-14 is probably a carbonate rock issue ie when they start flow testing it, the well gets blocked up. Previous RNSs stated no water, only oil shows and pressure back to previous levels.
My guess is Sonangol thought it best for reservoir management reasons to test levels different to historic producing depths. But they found the carbonate is being pulled into the well and blocking it. So they’ve been trying to fix that with limited success so are now thinking they have to test the historic producing levels which may have better rock characteristics. They were prolific producers before.
That’s the only way I can reconcile the very positive previous RNSs with this latest negative RNS.
Wondering if they might do a sidetrack. Also maybe FFD will be horizontals in the historic producing levels to improve reservoir management.
TO13 might flow
Morning Ed,
Bit of a shocker this morning.
Don’t you think it’s a bit strange to release an update saying there is a problem, when they are still trying to work it out?
A lot of wells must encounter issues along the way , that eventually get sorted out?
I am sure they could have waited a while, try and find a solution and then inform the market as to whether they have been successful or not?
The only credible reason I can think of is because of the timelines on the presentation?
All very strange
Thanks Nige
Thanks Art
Https://www.corcelplc.com/
https://www.corcelplc.com/investors/regulatory-news/
Will someone please post the link to Corcel's X webpage that is updated only with company news. Thanks in advance.
Morning Nige,
That's the thing though they haven't completed the test of TO-14 yet let alone testing TO-13. In fact the RNS also reads
"The Operator is following through with the completion program for both wells with continual updates to the program based on new information obtained with progression of the engineering work."
To complete the wells they must think this engineering work ongoing will solve it.
Regards,
Ed.
No worries, I genuinely don’t feel like many here can see the wood for the trees.
IMO the RNS was deliberately vague to tick the ‘updating the market’ box with ‘we might have a problem’ but confusing enough to be fooled into buying more in the hope that they interpret it the way the main market is clearly not…
8M market cap isn’t so cheap if you have licenses no one else wants, dry wells and have a board that pumps upbeat and confident news coming soon on social media, only to deceive them with the real ‘bad’ news, hours later. Each to their own I suppose, but how people have money in this stock the equivalent value of a nice detached house, boggles my mind, they must know what we don’t
Maybe posters are just being sarcastic when they post that they are 'buying more' or 'topping up', etc, etc
Sorry Sniper88.
I did not read that as being sarcastic though I can now when I reread it. To be honest there have been far too many bonkers posts here since the RNS was released to know what is going on.
ART you might not have noticed that my post was entirely sarcastic! And I was humouring those on here who seem to think all is rosey and nothing could possibly be wrong here.
Is that Sonangol's friends?
Or were Sonangol asked (nicely) by Corcel to bring out a progress update on the well testing late in the day and to make it a very confusing and poor update 'so their friends could get in cheap'.
Some bonkers posts and theories here.
Morning Sienna,
I even said yesterday with the declining volumes of trading on the run up to Easter I wasn't expecting an update until next Tuesday. Imo they should have held off as the RNS is inconclusive. It suggests they need an engineering solution to test the most productive zones in the well so testing is still ongoing. They haven't said specifically if these engineering solutions include a sidetrack, if it were mechanical failure or a well integrity issue. RNS is very vague, but it sounds as if there are still untested zones down there for whatever reason.
They currently have £9m in undrawn notes and are in the process of selling those Ni assets so still remains cheap in my view currently. The fact that they're still planning on well completion suggests its far from over yet and the market sure does like to overreact at times. They should have really held back under the cover of the operator until they had a clearer update of what is going on.
Regards,
Ed.
Morning Ed,
It was a shock to that kind of RNS for sure, no one saw that coming .
Considering work is ongoing and they still have to test the other well, it seems an overreaction to me.
The market cap is now only £8mill .
Thanks Nige