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I think, Sand C in the original well was not a water wet, infact it was a thin sand & poor reservoir. Whereas, Sand M was water wet with excellent reservoir.
There seismic interpretations suggest, sand C gets thicker & better at updip location, same bright colour as shown for sand A & B.
That’s why, there is a very good chance (64% chances of success) that sand C will also be a gas discovery with good reservoir quality
Yes agreed. But, we have seen some big sells during the last few weeks in 250,000 and 100,000 block sells. The assumption is, placing shares have been dumped heavily at current level. Hopefully, when churn is done, the price will likely to rise by spud time.
Forrest, chances of success for Anchois Appraisal well is significantly higher than 3 to 1 (33% or so). Anchois Appraisal well to test five sands, of which two sands are proved and discovered. According to the broker, CoS for these two sands (A & B) is 100%. The third zone to test is sand C, which was also intersected in the original well but was thin sand. The PSDM data indicates, the sand gets thicker at the up-dip location towards the east (Anchois Appraisal well), and CoS for sand C is 64%.
Deepest sand O has 37 - 46% CoS, although the original well didn't test this zone, the seismic data shows exactly the same features as it was shown in Sand A & B i.e. bright spot.
Legal, Albeit placing, was huge ($23 million) but 33% ($7.6m) of the placing shares is with sticky hands ($3.4m by the directors & $4.2m by the Magna Capital - of which AP is a substantial shareholder).
Listen to the company presentation;
There are three main objectives of the Anchois Appraisal well;
1. Test sand A & B - The appraisal well is drilling very close to the original well. Anchois well hit 55m of high reservoir quality gas, with 28% porosity, very high confidence of high flow rates. No impurities, cheap and easy to produce
2. Used this well as future producers (low development cost and time-saving)
3. Test deep "Low-risk" exploration target in sand C, M and O. Original well intersected thin gas sand in sand C and new PSDM indicates the sand getting thick and better towards the west (an appraisal well). That's why sand C (164 BCF) is very low risk with 64% CoS. Sand M was water wet gas in the original well but excellent reservoir quality. According to reprocessed data, a strong indication of good gas quality in the upcoming Appraisal well. Sand O (358 BCF) was never tested in the original well but processed data indicates similar attributes to what is seen in Sand A & B (bright spot and more). For detail, the 2020 AGM presentation (Video) is available on the CHAR website.
Oiler, I would encourage you to go through FinnCap broker report. Sand A & B have 100% CoS, while deep zones exploration target have upto 64% CoS.
Sand A & B already discovered and proven. According to rns. It has NPV of $500m or 44p equivalent
@Blaimthrower : Shell was exploring for oil, but they found a gas that's why Shell didn't proceed with that project. Gas was non-commercial at that time due to lack of any demand and extremely low prices.
Now, the circumstances has changed dramatically, there is very high demand of gas, Natural gas prices is heading towards multi-year high and due to green energy, Gas is considered to be environmental friendly compare to oil.
Due to modern technology, TXP can target sweet spot and extract max. gas at low cost.
What’s strange in the price action? It’s normal daily fluctuations, and share closed by 6% down.
Don’t you think, 5-10% daily fluctuations is normal thing in AIM market. If the volume was significantly higher or closing price down by more 20%; then you may predict any delay or placing. But, it’s down only 6% with low volume & stable price for the last few weeks. So, nothing to worry. There was only one big sell of 250k shares, which was offset by one large buy of 228k …
Marine, there is some screenshots from the Finncap report uploaded on Twitter. (All valuations and numbers are there). Also, the FinnCap report is free for the public and available on their website.
Risked value for Anchois is 31p and the unrisked valuation for sand (A, B, C, M & O) is 138p.
https://twitter.com/sadaatumar/status/1433021495517777925
https://www.finncap.com/research-portal#/portal/finncap
search for Chariot, there will be report published in May 2021 (post-placing).
Marine, I would like to add to your comments. There is a broker report published by FinnCap following the placing. They have set 31p risked valuation and 326p unrisked valuation for the entire license.
Their valuation is more comprehensive and in detail. Based on the Finncap report, the unrisked value of sand A & B (2C resource) is 49p, while, for the deep zone (sand C, M & O), the unrisked value is 89p.
All together, the unrisked value of Anchois appraisal well is 49 + 89 = 138p
Farm-in partner are mostly beneficial for exploration drill to spread the risk. I believe, at this point CHAR might not be interested for partner to drill only. They might be interested for partner to inject funds for development phase (rather than appraisal phase).
That’s why, I think JV partner is possible after drill program for development stage, otherwise, CHAR have already received EOI from two large African financial institutions for project funds (debt finance) to develop Anchois
With regards to placing overhang, I think nearly 50m (out of 212m) has been subscribed to directors.
And the balance, 160m shares since May placing
- i believe most have been churned.
As you mentioned ADV, how soon it went from 2.2 to 3.8p - this can happen in CHAR as well.
It’s just a waiting game & confirmation of rig contract
Anchois was non-commercial during 2009 due to lack of infrastructure at that time, and it would required nearly 5 TCF of proven gas to develop new infrastructure for development.
However, now infrastructure is already exist, and CHAR just need to tie-up any discovery to the existing facilities (cost around $300-500m, to produce 70 MMFCD).
Also, Repsol relinquished Lixus license as a part of strategic decision to quit four countries (including Morocco)