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If wire line logging results is positive and it warrants flow test, it would indicate that perspective resource (2U) will be converted into contingent resources (2C). And if flow rates confirm commercial discovery then 2C converted into 2P reserve (proven).
Now the question is, how much 2C resource is value? I would think, $0.5 to $1 per barrel, while the ground value of 2P reserve is $2-3 per barrel (base on Oil Search deal, at $3.3 per barrel, when WTI was $55 per barrel).
Let’s say, the wireline logging results are positive and all zones including upper SFS have enough thickness, porosity, permeability & reservoir quality, then I would think, ~600 mbbls perspective resources will be converted into 2C resource, and at $0.5 per barrel value, this May worth $300m or GBP 250m or 1.30p per share.
The LWD might provide early indications that HC shows are encouraging that warrants flow test.
However, wireline logging results will give further detail, especially net pay zone, and which zones may be tested. The aggregate net pay zone from all reservoir. And also, may indicate that the oil shows (or discovery) exceed expectations or in line with pre-drill analysis.
Wireline logging to provide key information, and market is expected to react strongly to the news. I’m looking for “exceed expectations” & “significant oil discovery” …
I can’t see anything 500-1000% on good news. Those days are gone. However, in the recent years, companies have done 60%, 100%+ on good news, and I am hoping something similar here on good log results. This will be the first oil discovery by 88E since entry in Alaska
Massive buying
Interesting poll on twitter
https://twitter.com/sadaatumar/status/1643247978545655808?s=46&t=hEeOOn1eZnLdMXHOch7wjw
It's upto logging results, that will determine either the HC are enough to warrant flow test.
If the logging result confirm the ney pay & better porosity etc, and "oil discovery" , the share price will likely to react to that news. Recently, DELT did 60%+ on Gas Discovery (without flow test) and flow test results further add 30-40%...
Another one week wait for the logging results.
TD result on Monday, and logging results likely mid/late-next week.
Nothing is priced in, as oil is risky business. The formation varies every meters.
I believe the negative reaction is due to company history. They had announced positive indications but later on, logging results was not positive. That’s why many are cautious.
Let the logging results confirm Oil discovery, and hopefully the market will react 100%+ rise
The news was announced few days back. ARA is expected to start test NT-2 well in Late March, with results in April. Also, the final location of CH-1 drill is expected to finalise next week. First gas production from NT1 & NT2 is expected in October.
Busy period ....
https://twitter.com/sadaatumar/status/1627938507040645122?s=46&t=MXKynCZZkaVlSDbrTFjVlQ
The problem is, result is one month away, and the AIM investors can't wait that long.
DELT was going drifting after SPUD, from 3.50p to 1.95p until they hit the gas. So, expecting TXP may struggle for few days, and may likely to bounce back from 1/2 week of March on anticipation of results & after the Royston results (success case).