Prospective resources1 Mar 2021 17:36
Personally, I hope that Peter Hill succeeds with GBP because he is a decent bloke. But to be fair, significant risks remain. GBP still only has 2D seismic over its one remaining block. The new 2D seismic that the team bought allowed them to increase prospective resources from c700m barrels to 2900m barrels, which is substantial. This year they absolutely must convince a large oil company to farm in - before September - because to get another extension they will need to commit to the acquisition of 3D seismic (and possibly a well) during the next phase. There is no way that GBP alone can fund and conduct 3D seismic (let alone drill a well). The cost of 3D seismic in a remote place like Namibia will certainly be upwards of $3m and probably above $5m. GBP would need to vastly increase its market cap - by at least a factor of 5 - to raise that amount of funds. The only catalyst for another decent fund raise would be a farm in. So, fingers crossed that some big boy likes their toys and decides to join the game.
Attracting a farm in partner will still be a challenge even with the new figures for prospective resources, because you have to remember that these numbers are only based on 2D seismic. Imagine trying to describe London by drawing a few straight lines across a map... You might completely miss the Thames, Mayfair, the City and conclude that London is a modest city full of terraced houses. The same problem applies when using 2D seismic to appraise oil blocks. 2D seismic simply cannot be used to confirm the presence of a closed trap and it can easily miss critical faults, etc. We are already in March, which leaves GBP with less than 6 months to secure a farm in partner, notify the Namibians, and secure another extension. It's not an impossible task, but gosh it's going to be tough. Hats off to Peter if he succeeds.
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