Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Doesn't mean he is right either.
I trust the HUR RNS much more
Hurricane do expect to find perched water and they also state that the bacteria is DEAD so 2 answers in 1
in this basement crystalline play.
Now he reckons the oil came in from the side and in another paper from 2014 that I posted last week (and for luck counts I answered your post hope you read the links as not many do hay ho ) he Dr T mentions the fracture network etc.
So I agree its a wait and see - loads oil but how far do they have to prove it up to make others interested and pay loads money for it or will they go for bank debt and go it alone.
Also
https://sp.lyellcollection.org/content/397/1/81
On that, I guess they didn’t factor in running through an area of perched water.....
I've not read this board for a while now. For what it's worth:
1. The board expected pockets of perched/stranded water on the 7z well (source: the last CMD presentation)
I disagree. It looks likely that took perched water out of their models around 2016. If they had expected it then it would have been in the 2017 CPR. The CMD was mainly a report on what they found.
2. Any produced water will be cleaned up on the FPSO and discharged to sea (source Lancaster CPR report, section 8.2.1).
I agree. But just because I think DSPP is wrong on this doesn't make his other observations wrong.
3. HUR can mitigate the rate of water flow by throttling back the rate of oil flow on 7z (source: the last CMD presentation).
Not sure what this is getting at. Are you suggesting the water cut is rate dependent? If confirmed that would be worrying.
4. It is common to get water in the early part of production (source: the last CMD presentation).
HUR were absolutely explicit in numerous interviews and in the CPR that they did not expect a high water cut prior to the EPS actually producing it.
My suggestion would be to read section 7.8.7 and 7.8.8 of the CPR which is the best description I've seen of HUR and RPSs models - this describes the expectations. The CMD mainly reported findings and I'm sure HUR are extremely busy reconciling the differences.
Good luck all. I think there are real worries regarding water and the fracture network at depth, but if these risks prove unfounded then the shares should re-rate. As ever, risk and reward.
If the oil is being sold on loading it will have to be within spec... i.e. Less than 0.5 of one percent water if memory serves me, above that there would be notes of protest issued and the possibility of claims.
If the water content is substantially above this I would imagine there would need to be a commercial contract with a nominated terminal to receive and dewater the crude down to a specified level which would come at a cost.
buyinmay,
"I’ve no longer got any interest whosoever in anything he posts. Can’t be bothered to go over there and read his nonsense. "
I tend to agree, though nevertheless have looked at his latest on TLF. For the same reason I never use the 'filter' option on posts here.If someone's going to make a fool of themselves, I might as well read it, otherwise have no basis for comment.
My only comment I have (or at least which I'm going to write about) regarding his latest, is that he STILL has an incorrect figure for the December uplift by the Stena Natalia. Remember that one? The load that went to Germany so they could secretly offload the water. :-))
Bottom line, would the company knowingly hide price sensitive information, knowing that is legally and duty bound by threat of legal action against its own directors if DSPP's suggestion of hiding information were credible?
Answer No.
Whatsoever
Blame Stellenbosch!
I’ve no longer got any interest whosoever in anything he posts. Can’t be bothered to go over there and read his nonsense.
He wasn’t clever enough to realise that suggesting that different port locations were being used to hide water would lose him all credibility.
Spent force.
Enjoying a Friday night Stellenbosch red.
Meanwhile DSPP has posted new info with the usual caveat.
Valid point HT.
^ DSPP implied that HUR were preferentially producing from the 6-well (dry) to try and hide something. However the 7-Z well is only 300m away. So assuming the 6-well remains dry (as appears to be the case) then running it on its own is surely the best way to test production water-cut?
HUR have always stated that both wells would be produced concurrently from the end of January.
Aduk,
I agree with the principle of trying anything that will get the fractures further along the horizontal flowing, anything from stop start to slow and careful or intermittent full flow and throttle back, etc.
Maybe something along the lines of that or what you said/infer!
Oilbeback,
Good post.
I'm writing on my phone, so can't pull out a quote. But regarding 7z and optimizing flowrate, somthing's been nagging away at the back of my mind for weeks now. That being, the possibility that the company may be able to 'play with' the well's behaviour yet more by bringing one of its ESP's online. I find it difficult to properly explain this notion (even to myself!), but maybe running an ESP but choking down more might 'tweak' the way the thing behaves, and possibly 'preferentialize' flow from particular fractures the wellbore has intersected along the horizontal.
I know, that sounds very vague and wishy-washy. Maybe the idea's just daft. I don't know. But instinct tells me there might be something underlying it.
I totally agree with you!
I used to respect dopp's early posts, but not anymore. He has taken OGA figures for about 3 mths, 3 -4 data points, extrapolated them to the nth degree and drawn wild conclusions! As you say his later comments on water being back loaded to tankers, etc, are just plain bonkers! He has over analysed everything and even though he cautions that Hur might well be right he still thinks that he is closer to the truth. He should keep his wild speculations to himself rather than scare the wits of any non technical investor!
The CMD will reveal all and more I feel sure.
GLA
oilbeback - I am afraid when DSPP started producing scattergraphs with very limited data he lost any credence with me. I initially described him as a little knowledge as a dangerous thing merchant. However his subsequent fixation with the water cut and thinking he knows better than the board or else they are lying - and I now suspect he has an ulterior motive.
My suspicion is that he is knocking confidence to try and drive the price down - he can then load up knowing it will go up when Hur confirm everything is OK later on.
I Might be wrong .......
I spent hours reading through dspp's posts from the beginning of December on The Lemon Fool (TLF) bb yesterday and this is what I learned:
dspp seems very knowledgeable but his arguments are one of extreme caution. He has spent a great deal of time labouring the water cut (WC) issue on 7z to the point of obsession. In fact the whole bb seems to be dominated by dspp on this subject. The only person to question dspp is biffadog but that was not well received by him. He holds Malcy and this bb in contempt. He is using OGA's data on the Lancaster production up until October and makes the point that the WC on 7z is increasing with the oil flow rate. His analysis is all very credible right up to the point that he suggests that the water is being offloaded by tanker in secret. As conspiracy theories go, this one is lame. Even worse, he suggests that the board are hiding info from investors and that Brexit and Indyref2 could be a problem for HUR. I came away wondering why he spends so much time putting fear, uncertainty and doubt (FUD) in the minds of investors. What motivates him to do this? Has anyone else gone through his posts?
I don’t post on the TLF board but I would comment as follows:
1. The board expected pockets of perched/stranded water on the 7z well (source: the last CMD presentation)
2. Any produced water will be cleaned up on the FPSO and discharged to sea (source Lancaster CPR report, section 8.2.1).
3. HUR can mitigate the rate of water flow by throttling back the rate of oil flow on 7z (source: the last CMD presentation)
4. It is common to get water in the early part of production (source: the last CMD presentation)
CPR: https://www.hurricaneenergy.com/assets/reserves-and-resources
CMD: https://webcasting.brrmedia.co.uk/broadcast/5d249a00da68dd4b10ae7fb0
If well 6 had the same WC as well 7z then there would be a reason to be concerned. As it is, well 6 is producing no water.
In the RNS dated 13/12/19, HUR confirmed that the productivity performance of each well on an individual basis is in excess of the Company's pre-start-up expectations. If that is the case then maybe they could increase production towards the 30,000 bpd figure indicated in the CPR report. Let’s see what comes out of the next CMD in March.