focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Good morning guys,
Yeah its a little unfortunate that they split KON-15 between just two companies so far. As others have said CRCL have their hands pretty full with KON-112, KON-12 and KON-16 anyway. There were a lot of companies that didn't win an interest. Roll on the test results of Tobias.
Bid round results as posted by rod from ADVFN (SRSP)
https://anpg.co.ao/noticias/licitacao-2023-resultado-do-concurso-publico/
"However, for Block KON 15 with unsatisfactory proposals, the company Sonangol was classified as Operator with a participatory interest of 40%, and the company Afentra as Non Operator with 45%, being available to interested companies and that have been qualified as Associates of the National Concessionaire in this contest, 15% of participatory interest in the block."
Regards,
Ed.
Confounded,
I reckon you've hit the nail on the head with that one. I also believe that the redevelopment of Tobias has been perfectly timed to coincide with the 2023 bid round. Sonangol proved to everyone how important this project is when they got the minister to attend the spudding of TO-13, that's not a common thing to do.
Indeed, the trading was fairly mixed too with some more chunky late reported buys etc. MMs have been running short of stock for days before Friday. Very true, the future of CRCL isn't currently relying on the winning of an interest of KON-15, but is certainly based on the redevelopment of the oilfields and exploration of that 297mmbbls of prospective. Also the sale of the mining assets couldn't be better timed with the preparations for the EPS.
Its only a matter of time until we get the flow tests for TO-13 and TO-14, whether that happens next week when the results of the bid round are due, lets see, would love it if it does. I agree we are definitely in a news rich period with lots more to come from Tobias results, sale of the mining assets, assays from Australia and the possible addition of more blocks in Angola. Market cap not even £20m. I also keep thinking of the statement, succeed where others have failed for some reason too. :)
Regards,
Ed.
RL,
Thanks for confirming to me that you're a trader something that I had expected. I have said that my background is research and have more than 30 years experience in investing in oil and gas and mining stocks. I've just posted a little proof of that on the ADVFN wibble thread, you can check my profile if you wish, you'll see how long I've been posting on ADVFN and what my investment style is. I posted on iii before that in the 1990s (not sure if they still have a bb though). Like I said my experience comes from investing in literally hundreds of oil and gas an mining stocks over the years and talking to many CEO's as well as lots and lots of research. I do cut and paste links at times, so yeah you are right there I suppose.
I hope you're as lucky in the future as you have been here, although time may well tell that you left far too early rather than wait for Tobias development and beyond. Mr Karam is apparently still looking at further additions. My advice to you for your future punts is research, research, research.
Regards,
Ed.
RL,
LOL on the 15th you insinuated that I worked for the company and was posting too much, today you're insinuating I'm not posting enough. Seems you're a little hard to please. I did say that I try to limit my time on social media, I guess you missed that post.
Some of the little traders have sold out, you can find them on the wibble thread and the other thread on ADVFN for example, and I'm sure they're posting similar elsewhere. The share price has up to this point almost moved in a straight line and the first real down day a lot go into panic mode. But then others that are here who have a longer term outlook than the immediate chart are quite relaxed as nothing has changed. Could get news at the start of the week on Mambare and KON-15. Lets see. Hopefully this board will return to the way it was once the traders have moved on.
Regards,
Ed.
Good morning Sienna,
We've been over looked for a long time now. I would still say most oil investors won't know we're an oil and gas company yet. But I've started to see CRCL get mentioned on other boards, such as SRSP thread on ADVFN and I bet it gets the odd mention on the AET thread too. So word is starting to get out there. We sure are rising on anticipation of sale of the mining assets and mainly on the upcoming results of Tobias. Cap is still small though, its only £20m at the moment so could gain more momentum yet. Won't take high flow rates to justify this current cap, I'd say 500-1000bopd net would do it. Results have very good so far, hopefully the flow rates will support a much higher cap. Look at AET for example, with their debt their enterprise value is many times ours. Lets see what happens near term. With our assets and funding position (undrawn notes and sale of mining assets), I don't see these as fairly valued yet.
Regards,
Ed.
Calder,
I personally can't see it. I reckon it will be Sonangol with operatorship of KON-15 and I'm hoping that CRCL land 10-20% as NOP. Given the list of companies in for it there's likely to be multiple winners. Either way we'll know very soon with results of the bidding round estimated for Monday.
Regards,
Ed.
Guys and gals,
As for the loan notes, they were put in place when the share price was just 0.4p. Only a small portion of that £10m has been drawn to date and some of those have already been converted (£250k). But that allowed the company to participate in these two wells, so money very well spent from the looks of it.
Regards,
Ed.
DC,
Well I bet that is what Sonangol and CRCL are hoping for. The re-equilibrium comments are interesting for sure, as it does hint at pressure returning to pre-production levels. Is it possible that there's more than 65mmbbls unproduced, from the recent results I'd imagine so. Could it be that the 29mmbbls have migrated back into the field, early drill results suggest it may have happened, with the recharge, pressure and re-equilibrium comments its a possibility. More wells could prove or disprove that though, if they keep finding dry oil and no water it would be looking good. A new CPR would make for interesting reading.
Layla,
BOIL are not a company that I follow closely, from memory they do have an interesting exploration target in the NS and an appraisal gas asset in SE asia. I've not looked at them in months though, are they funded or farmed out that gas asset yet?
Regards,
Ed.
Hi TN,
I would say you are partially correct. Carbonate reservoirs have pretty much no matrix porosity unless they're inter-bedded with sandstone, clays, shales etc. They are relying on fracture porosity for their porosity and permeability. Sandstones can have world class matrix porosity (40%+) and multi darcy permeability like you would find in the North Sea for example, some of those old fields may still be recharging too due to oil migration pathways and oil gas and water would move easily depending on their phase etc.
You are correct in saying though that because Tobias is highly naturally fractured that it would aid oil migration into the reservoir and also its ability to store greater volumes. Yes the high porosity values for the limestone (up to 14%) could allow the oil to move up and water to move down the structure. Could well explain why there is no water in a well offsetting a well that watered out. Also where did the water from the pressure support well go?
So to summarise, I wouldn't say that Tobias' limestone reservoir is better than a sandstone for oil migration, but it seems to have done the trick with re-charge, pressure and lack of water and that's what we want to be reading at this stage ahead of the flow test results. We'll know in due course just how good these flow tests are given what has been released to date. Perhaps after enough wells we'll find out where the water went and how the reservoir has seemingly recharged oil and pressure.
Regards,
Ed.
Good morning guys and gals,
Breq,
They will manage all wells carefully, they cannot over produce wells as that can lead to reservoir damage. What they will be interested in this time though, with oil around three times the price of what it was from 1960-1990, is ultimate recovery and getting out as much as possible. I reckon Angola wants to get their production up from 1mmbbls per day back to at least 2mmbbls/d (will take more than Tobias of course). They're now keen on getting that significant remaining hydrocarbons out and can now use horizontal wells to do so. So I would imagine there would be a peak and decline period like all other fields. After Tobias get finally shut in could they come back many years in the future and try again, perhaps. There could be huge volumes of source rock down there with high total organic content.
How long did it take for the field to recharge and regain pressure, reach re-equilibrium? That's a question that I'm sure everyone would be keen to find out. Perhaps they'll get a better idea once the field is fully developed. It may take wells on the block to go pre-salt though and perhaps drill into the possible source to find out what temperature, pressure and TOC it has. There are pre-salt targets on KON-11.
Sienna,
My background is research, so many years reading about oil and gas and mining. Plus talking to many CEOs, if you ask the right questions you can get relevant non-sensitive information. I try to spend as little time as I can these days online so not on very much social media and that is the reason I didn't join Telegram either.
Regards,
Ed.
Nige,
Yeah its all been very positive so far from CRCL and the flow rates are eagerly anticipated for sure, especially what they said about TO-14 and the nearby TO-4. It was great to read that article too from the Sonangol site that has sent us over 1p. To get a positive update from the operator and national oil company is a big plus too.
Regards,
Ed.
Breq,
There is a formula out there to calculate reserves and it will include other things like oil saturation values, also pressure plays a role, there is also an oil shrinkage coefficient etc etc. You can find that formula online. Also we currently know the oil down to point from TO-13, but they have still to drill beyond that point. 120m of oil containing reservoir doesn't sound very much like reservoir pinch-out to me! So likely continues downdip of this point too. Also is oil still migrating into the field? Has the oil sampled got the same biomarkers as the historic oil produced, therefore from the same source rock. Is that oil still migrating from source into Tobias causing the re-charge, re-equilibrium and pressure build up, leading to the comments from CRCL and Sonangol about the significant remaining hydrocarbon potential in the field?
They'll need more wells and an independent CPR to answer all of the above. How big is the reserve going to be is a good question and worth thinking about especially as every release being put out suggests the wells have found more than anticipated.
Regards,
Ed.
Nige,
I'd prefer to see some flow rates first though before I would like to say we are the same value of some of the other £30-50m listed companies out there. So flow rates first and hopefully reserves next and then sure we could be £50m+. It sure does look and sound like we have the assets for that at the moment. But it would take conformation to get us there imo, could news/momentum take us there ahead of results, KON-15 etc, perhaps. I'd not rule anything out on AIM; I've seen companies with much lesser assets trade much higher.
Regards,
Ed.
Nige,
Yes, I'd imagine we could hear something regarding the onshore bid round results next week. While certainly not vital for CRCL given what's happening on Tobias right now, it would be a welcome little boost for future options. By all accounts Mr Karam seems keen to add to our future options, regardless of Tobias, Galinda and our large exploration inventory.
Regards,
Ed.
Good morning Guys,
Different people will have different ways of pricing oil in the ground. At $2.5/bbl that would be very low even for African oil. Look at possible transactions around, some US transactions will be even above $20/bbl for 2P. Depends on the development status, i.e PDP assets fetch a premium etc. Personally I'd class African PUD assets at about $5-6/bbl, some might value these a bit higher. If an asset has exceptional economics, high flow rates per well, they could get a premium to that for sure. Tobias might fit into this category, if it flows like it did in the past it would be exceptional. Certainly if the wells flow at economic rates then establishing 2P and drilling more wells would be a natural next step. There is always going to be a discount for geographic risk, although that shouldn't matter too much for us as I don't want to see the possible future reserves sold, I want to see them produced.
Personally I now see 11.7m of unproduced oil net to CRCL as very conservative, water appears to have been displaced and the field recharged and re-pressurised. With mobile oil thoughout the reservoir, all that bodes well for recoverable volumes as hinted at by both CRCL and more recently Sonangol (recent article posted by VIP).
So if we get flow rates as expected I would easily say $5-7.50/bbl would look reasonable, but I also expect a re-calculation of the resource potential to swiftly follow. They need to know not only how much it can flow, but also the ultimate size of the prize to come up with a plan for FFD. Certainly they should have enough information from the two wells for the EPS, that's pretty much a given now (see all RNS from CRCL and the recent Sonangol article).
Regards,
Ed.
Good morning Nige,
I guess that Barno is referring to the results of the onshore bid round. As SP71's link showed the results are due on the 22nd.
The Align research shows a low valuation per bbl for sure, $2.50/bbl is still modest, by all accounts Sonangol and Corcel have been suggesting there's more oil there than expected too. Where did the water go from these two connected wells that have just logged oil, one on the crest and the other about 1.4km down the flank, both showing oil shows throughout the reservoir and no water. TO-13 drilled further downdip than the rest of the previous producers too.
We may also hear about Mambare sale and Ozzie assays soon too.
Regards,
Ed.