Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Good morning guys
Lsetown,
Yes true they believed before drilling there could be as much as 65mmbbls unproduced. The wells were all vertical and widely spaced on this large field. Drilling of TO-13 and TO-14 suggests that the field has returned to original pressure and no water encountered to date (even though TO-4 watered out and there was a water injector on the field). So drilling is certainly pointing towards recharge, potentially full recharge. This field was mainly drilled in the 60's and 70's, so even logging would be transformed since then. So the modern wells will given a better idea of oil in place and recoverable. I'm sure we'll hear at some point when the company will commission a CPR to update the OIP and recoverable numbers.
If they match pre-drill estimates, let alone increase, our tiny cap will come under pressure imo. Several weeks isn't a long time that's for sure and the market seems largely unaware of what's going on given the volume of trading this week so far. Lets see what happens.
Regards,
Ed.
Hi Nige,
They'll do flow tests followed by pressure build up tests. That tells them how good the reservoir is close to the wellbore and how quickly it recharges to full pressure again. That and the volumes produced can give them an idea how the permeability is in that area and obviously how productive the reservoir is. That combined with the mud logs and coring (if they took cores while drilling, not confirmed yet) would give them a lot of info about the reservoir. Also pressure is very important too as flowing pressure shows drive; the two main drive mechanisms are gas and water, we know no water observed in the wells to date just oil shows.
What we did get is that the company, and obviously Sonangol, believe that TO-13 and TO-14 are connected, showed similar characteristics from the intervals encountered. That is a big plus when it comes to calculating volumetrics. So they can potentially use the old historic wells to calculate oil in place for a possibly recharged reservoir. If this had been a new field they would need at least three wells to prove connectivity over a certain area. So they may be able to give an updated volume of oil in place using these wells and the older wells. Ideally though sidetracking the old wells or drilling new horizontals would give a more accurate idea of what's down there. Certainly drilling TO-13 downdip of previous wells and finding oil shows and then showing connectivity to TO-14 is very positive.
Several weeks and we'll have the test results and given what the company has said so far about TO-13 and TO-14 they could be very interesting indeed. TO-14 in particular could make a material difference to CRCL, but lets not count chickens yet nor make predictions, there's not long to wait now to find out. Then we'll hear about the forward plan and perhaps independent verification of the reserves based on the new wells and activity.
Regards,
Ed.
ALB,
We'll find out in the coming weeks how big Tobias may be. I'm sure you're already doing well from your holding. They sure do have the to get to Mr Karam's 6.4p target. Tobias and Galinda might get us there, if they can match those previous peaks on Tobias then most of the work will be done. We'll find out in due course.
Sienna,
Yes correct, BMA have rofr on Mambare only and IBM could still complete on Wowo gap.
Nige,
Well the comments from the finals mentioned acquisitions, so sounded if they were looking at more than one project. Also previous links to interviews posted suggested he was also looking offshore. So who knows perhaps we may see Mr Karam go for another project this year. They're likely to be very busy on Tobias and Galinda regardless. If Tobias gives strong flow rates who knows what they could put their sights on.
Regards,
Ed.
Hi Sienna,
Yes IBM at the moment have offers in for Wowo gap and Mambare. BMA have a right to first refusal in place on Mambare, that is what the 45 day pre-empt period is for. BMA now have the option to make a matching offer legally within 45 days of being formally notified by CRCL. If they choose not to do so then its available for IBM to close on the previous offers for all CRCL's Ni assets.
ALB, if you take Mr Karam as wise counsel he set his share options to vest at 1.6p, 3.2p and 6.4p recently as a reward for share price performance between now and 2026. I'm looking forward to see which of these he can hit through Tobias, Galinda, exploration drilling and Angolan consolidation and how he aims to succeed where others have failed. Others may not have as long an outlook.
Regards,
Ed.
Hi Nige,
I'm good, hope you are too! Yup that pretty much sums it up. Either BMA matches the IBM offer or pass up on it. If IBM are the successful bidder for Mambare they can then move to complete both Mambare and Wowo gap acquisitions. The sale of both those assets would be roughly equivalent to about half our current market cap over time, so pretty significant once completed. Not in our current cap to price in Angola, Canegrass and Mt Weld. The immediate cash elements on completion could come in very useful.
Shockingly we've a similar cap to SYN currently, they have a mediocre/poor asset in India which they can't get to flow any decent amount over many years of trying (verticals and horizontals). Shows how little is priced in here currently, hopefully the market will get a wake-up call around "several weeks" from now!
Regards,
Ed.
Good morning Sienna,
In October we got this:
"Following Corcel shareholder approval, the Company will formally notify BMA of a bonafide offer for its interest, starting a 45-day period in which BMA can legally pre-empt the transaction."
Shareholder approval was given on the 8th, so I guess they would have notified BMA shortly after this. So I would imagine that the 45 day period, excluding Christmas and New year will be running imminently. Hopefully see something this week about that. Shouldn't have long to wait for TO-14 flow test results either.
Regards,
Ed.
Morning Nige,
Yeah had a good one, hope you did too! Yeah there may be a few sellers today that don't want to wait several weeks more. Seems a little odd timing to sell now after waiting 7 weeks or so for the test results. Now we have a clear path to results, but each to their own. I was tempted to buy the dip this morning. Yeah looks like TO-14, TO-13 and Mambare updates all due this Q for starters.
Regards,
Ed.
Luke,
Very true, at least now we have a clear timeline to news on Angola and it sounds as if we'll get a test result on TO-14 before they move to TO-13. Also like you say we're likely to get more news in the mean time too, Mambare update must be close now. Hopefully both Wowo gap and Mambare will go to IBM, if BMA can match the Mambare offer then their money will be just as good. Hopefully those sales will complete before the EPS.
Regards,
Ed.
At least that is them underway now and for those of us intending to stay beyond the testing of these wells and for the EPS etc then a couple of weeks is neither here nor there. Going to be an exciting couple of weeks, good to hear they're already preparing TO-13 for testing. Once they have the flow rates then they'll know the scale of the EPS.
Regards,
Ed.
Good morning Sienna,
That haven't as yet gave details of these sidetracks mentioned. They could be referring to the 7 previous production wells on the field or they may intend to sidetrack the two current new wells, that is yet to be clarified. If they are going back to sidetrack the older wells then that would obviously mean a very rapid development and cut down the time and money to FFD. Hopefully we'll get more clarification of that in the next RNS re-Angola.
Still no pre-empt from BMA on Mambare and I think their legal time-frame runs out this week if I'm not mistaken (GM approval on the 8th Dec '23). So hopefully an RNS this week or early next and we should know then if IBM are in the clear for both Wowo gap and Mambare acquisitions. That would be very useful cash for the possible EPS.
Regards,
Ed.
Good morning Luke,
When you look at those older documents on the previous bid rounds they show the 2D seismic lines. In the Congo basin they're fairly tightly packed. When you look at Kwanza basin there are far fewer seismic lines taken. They do say in the July 23 presentation they're planning seismic on Blocks KON-12 and KON-16 this year. All three blocks are large and its certainly possible that the seismic lines don't hit all possible leads, so yeah I would agree with that slide, its quite possible that new additional seismic would identify more pre and post-salt targets. That seems like a reasonable assumption. 3D seismic over Tobias and Galinda could be useful too. Good to see that CRCL were present at that conference too.
Regards,
Ed.
Nige,
Fingers crossed. You would imagine so, since the minister attended the spudding of TO-13 I would imagine there would be bells and whistles if the flow rates are good. Could be the first onshore Kwanza basin production in 30 years. I would imagine that rounds of publicity and interviews may follow that.
Regards,
Ed.
Good morning Guys,
Given the time its taken so far I would imagine that we could get an all in one RNS. As the company has pointed out they've multiple intervals with potentially productive zones in each for both wells, so that has the potential to take some time to test, Yes the rig was last on TO-14 and it had oil shows throughout so that's where they'll start. Then the rig move back to TO-13 for clean up and test there too. Fingers crossed the testing will conclude soon and we'll have a better idea on scale and timing of their planned EPS. I'm currently checking in multiple times per day at the moment just in anticipation of this Angolan update. They didn't rush the drilling so not likely to rush the testing either.
Regards,
Ed.
Good morning Nige,
I'm good, hope you are too!
Yes fingers crossed that we'll get an Angolan update soon and yes hopefully it will contain a lot of detail on the forward plan. The last update regarding TO-14 was very detailed and comprehensive as to what they encountered and what they plan to do, so next one will hopefully be similar.
Mike,
Interesting links, shows the importance in growing the oil and gas sector for the Angolans.
Regards,
Ed.
Hi Mike,
I'm good, hope you are too! They're still showing on ADVFN but I see what you mean they've now turned up on LSE site too and three have been deleted. Strange goings on indeed. Lol perhaps they did fall asleep when putting in so many trades. Strangely some are at different prices.
Regards,
Ed.
Just showed up on ADVFN, 6 x 5m. 4 of them are priced at 1.15p and the other 2 are priced at 1.10. 2 of them are timed at 4:06 I guess yesterday afternoon. So there's some reshuffling going on by someone. Perhaps Align may have sold some more off to a keen buyer.
Regards,
Ed.
Hi Nige,
From the contact I've had with him so far he seems very clued up on what he's doing. I reckon he's being realistic with those targets but obviously can't speak for the guy. I do feel he sees those as realistic though given current events and what may happen at Galinda also. Imo all it would take is one more discovery on these blocks and his £100m target could easily be game on, especially if that was on KON-16 our operated block and highest working interest. We've yet to see how big Tobias is and how it flows. Some people for example see realistic values as x3 NOI so flow rates are key for that.
Regards,
Ed.