Member Info for Exploration

a1m1

CNRL has what is known in business as a ‘SMART’ plan to measure performance.

The commercial and operational steps in the plan are;

Specific
Measureable
Achieveable
Realistic
Timely

Get it?

You’ll find successful companies follow a plan, and then deliver against the plan. It’s quite easy with good, experienced management. The bar chart in the latest presentation is a summary of the plan.

Gunthorpe,

Yes - it’s all going well and according to plan.

The 3D seismic on P2252 should illuminate the Zechstein and deeper Carboniferous plays for the first time in this part of Q41 and perhaps reveal multi-TCF potential similar to elsewhere in Europe on the margin of the Zechstein basin.

If CNRL/Shell can licence the whole Zechstein play in a multi-block award in 32nd Round and re-licence 43/11, then their ‘step-by-step’ approach to building the company will validate the under-promise/over-deliver performance of their team.

A truly impressive performance from a standing start in just four years with very low spend.

If I lived in a house in Quadrant 48 in the North Sea under 200 feet of water I might have a problem. But no-one does. And the permits to drill and operate offshore do not require micro-seismic monitoring or special permits for hydraulic stimulation and so on.

The sites onshore must follow OGA’s Onshore guidelines;

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/185935/UKOOGShaleGasWellGuidelines.pdf

Miss Engel’s problem - apart from losing two jobs - was that licencees of Landward Licences have rights to explore for and produce petroleum according to the Petroleum Production Act but according to her, cannot comply with the regulatory guidelines. Maybe that’s government strategy?

I suggest, a1m1, that you could get more mileage from your anti-fracking campaign by attacking Shell - they will design and operate the well on 48/8.

About as clueless as can be a1m1.

I’m afraid Natascha Engel may have engineered her own downfall on fracking. After losing her seat in the election it was announced that she had taken a job as a consultant to a firm involved in fracking: Ineos.

The North East Derbyshire Labour Party have strongly condemned her actions and are considering their options in relation to her status within the party, though she was replaced as the Labour candidate for the area by anti-fracking Sheffield councillor Christine Peace.

On 5 October 2018 the Conservative government announced Engel as the new commissioner for shale gas - like being handed a ‘poisoned chalice’.

According to the Department for Business, Energy and Industrial Strategy she "will be a direct communication link between local communities, the shale gas industry and the industry regulators."

On 28 April 2019, she resigned as fracking tsar giving an interview to The Mail on Sunday saying that the requirement that fracking be shut down in the event of earth tremors measuring 0.5 on the Richter magnitude scale was "making fracking impossible".

Maybe she’ll stand for the Green Party next!

Gunthorpe

Seems to me a1m1 is getting quite agitated about fracking.

There is a clear strategy adopted by the UK government governing OFFSHORE regulations. See link below.

https://www.ogauthority.co.uk/media/3770/oil-gas-southern-north-sea-tight-gas-strategy.pdf

But, ONSHORE, UK and NW Europe it’s another matter. France has banned all onshore drilling for oil and gas. Poland has imposed restrictions. Germany, where fracking started in the 1970’s, has more fracked gas wells than any EU country - but in 2013, the Chancellor Merkel announced draft regulations based on exploitation of shale gas deposits using the same fracking techniques common in USA. That proposal ran into massive political opposition on several fronts. The plan was put on ice and eventually a moratorium was announced - effectively bringing German fracking to an end. It’s not as though Germany is short of gas - there is plenty of pipeline gas available for the foreseeable future.

In UK, onshore industry interest in fracking has waned - our country is simply too densely populated to overcome all the restrictions at parish, county and national levels - so investors have gone elsewhere. Besides, UK has plenty of pipeline gas via the European supply hubs and LNG import terminals.

NGO and ‘protest groups’ have polarized public opinion about onshore fracking in UK using direct action to promote awareness against Cuadrilla’s work in the Fylde - UK’s only fracking site.

https://www.theguardian.com/environment/2018/oct/17/court-quashes-excessive-sentences-of-fracking-protesters

Haven’t seen a single complaint from fish in the North Sea about fracking induced earthquakes. Perhaps Shell’s offshore fracking will cause a tsunami at Skegness.

I see -

- it’s not good news and an unnecessary complication - but only for you a1m1. Too bad.

Brilliant news for CNRL and Shell who can get on with their work in the North Sea unhindered.

I suppose you could glue yourself to CNRL’s office door ready for Plod to cart you off.

Why?

- all Shell’s Clipper hub wells are commercial thanks to fracking.

Are you planning to camp out on the roof of the frack boat to protest?

Suggest you read this on well planning, from page 34.

https://www.ogauthority.co.uk/media/4521/oga-sns-tight-gas-stimulation-december-2017.pdf

I expect the Selene well will consist of a vertical hole to calibrate seismic, followed by a horizontal side-track which will be subject to hydraulic stimulation and possible completion as a subsea producer ready for tie-back to the Barque platform.

The OGA publication describes the workstreams needed in well-planning and cost estimation.

End Q2 = End June
Selene Prospect is in P2437

Placing will be over-subscribed - a great opportunity

FD20

Ensco reported end-April that their contract for Ensco 122 has been extended for one well. The rig is working on Shell’s Galleon field, near the Selene Prospect, this week. Maybe it will move there soon.

CNRL’s approach is to under-promise and over-deliver so let’s leave them to it. Fortunately most of us are wise enough to ignore a1m1 and the various aliases behind that poster.

I’m looking forward to the next placing - an excellent opportunity based on the petroleum geology and technical/commercial quality of the participants.

Riddlers

Thanks for the reminder. Planning a frac job is complex process and Sound are sensible to take their time - especially as hydraulic stimulation may turn out to be the key success factor in guaranteeing commercial flow of gas in Tendrara.

Just looking for primary porosity/permeability seems to have failed with TE-8 and TE-9.

In UKCS, the OGA figured out that about 4 or 5 TCF was locked up in existing producing fields and could be released with an industry-wide effort. They produced a useful guide including costs, results, planning requirements etc which applies mainly to the Rotliegendes Sandstone ‘tight gas’ areas - similar to Tagi. This guide was the outcome of an industry-generated effort to pool experience.

https://www.ogauthority.co.uk/media/4521/oga-sns-tight-gas-stimulation-december-2017.pdf

SO

I tend to agree with posters who have commented that news about TE-10 is a bit thin. I’m guessing the CT was used for a tubing-conveyed test string and fluids reversed out to bring the gas to surface.

There have been a couple of references to the contribution of natural fractures in the Tagi reservoir. In areas like Tendrara, subject to a regional stress regime, created by the tectonics of the Atlas mountain-building phase it is quite common to find drilling-induced fractures.

So what starts out as an 8.5” circular hole can sometimes become an elliptical hole in the rock as chunks ‘break-out” when the drill bit penetrates the stressed rock. I’ve worked in thrust belts where the well becomes a ‘slot’ - sometimes four or five times longer in the long axis than the diameter of the drilling bit. The petrophysicist’s job in these situations is not only to interpret porosity and hydrocarbon saturation, but also to determine whether fractures are regional and extensive or just close to the well-bore caused by drilling.

Also, some fracture networks can be resistive to fluid flow, whereas others are conductive and more susceptible to hydraulic stimulation.

Link below is for any fracture geeks on the BB.

https://www.naturalfractures.com/5.3.htm

I expect Sound will want to keep their fracture interpretation and stimulation ‘secret’, but I guess what I’m driving at is pleased don’t be seduced by reports of fractures - they come in all shapes and sizes!

Cool story, bro

How many accounts do you have now?

At least 4 on less and advfn - maybe more?

He’s never heard of colored candlesticks, I expect

Amtech

Technical analysis on a share like CNRL is just wishful thinking byamature ‘technical analysts’ looking for a lots of short-term trades to flip stocks. Sure, technical analysis has a long track record reflecting things like the psychology of the market etc on things like tulip bulbs, but right now CNRL’s trend is better reflected by fundamental analysis of the stock’s business foundations - particularly quality of its acreage and access to capital.

Also, to be a professional technical analyst one needs at least a Diploma from the Society of Technical Analysts - that’s why its for grown ups.

That’s right Fairdealer.

The JOA will define the annual business cycle, including timings for presenting Annual Work Programme and Budget for each licence and relevant Operating Committee meetings.

This, in turn, defines when CNRL can expect cash calls and, from that, the funding requirements for the Shell JVs. As I understand it, CNRL retains administrative operatorship and Shell is technical operator, supervising seismic and drilling operations at sea.

Looking back, JOG raised a lot more than they needed - because the investor ‘fan club’ was gagging for more.

With JOG, Statoil funded all costs up to US$25 million in respect of the first exploration well to be drilled on the P2170 Licence (Verbier), with any cost over-runs to be satisfied by each party in proportion to their working interests (JOG 30%)

JOG raised £1.6 million on the back of the farm-out news in November 2016 for ongoing office costs.

After the Verbier discovery and industry hype JOG raised £20 million to pay their share of two wells @ 30% paying interest + some for other activities including more 3D seismic. But the first appraisal well was a dry hole. Remember the Buchan area wells are in water too deep for jack-up rigs and require more costly semi-submersibles.

CNRL’s strategy is to deliver success with the drill with minimum dilution - which is feasible on the Selene Prospect - and then go for a big raise on something tangible, rather than on an exploration project.

Does CNRL really need to raise ‘£10 to £20 million?

You can see in the attached report by OGA, page 15, that the average cost of a well drilled by a jack-up rig in UKCS is less than £10 million.

https://www.ogauthority.co.uk/media/5107/oga_wells_insight_report_2018.pdf

So, for an average cost well, this implies CNRL will pay £2.5 million for an ‘average’ well.

Sure, more may be required up to the cap of $25 million (~£19 million) under the terms of the farm-out to Shell, before reverting to 50/50 paying interest.

Looks to me like like there is plenty of headroom to participate at 50% working interest for a modest raise and drilling a low risk prospect.