RE: Its the gas stupid!2 Jul 2019 08:25
The current well success was a surprise with the amount of oil produced during the initial flow testing. The company were not prepared for it as it is 2-3 times more than was expected, they also cannot successfully monetise the oil they are able to produce just yet but will be able to start producing and selling in the very near future, see last rns. Along with the oil on this same well, there is a jolly decent amount of gas produced which at the moment they also cannot monetise and will have to flare it in the relatively short term until it can be captured and sold. There is a sales agreement already in place for it and the customer is supposed to be installing pipework to enable them to take the gas. This gas--from the 'oil' well is worth about $1m a year to BLOE which is the nice addition that you are thinking about.
The GAS, (in big letters because it is potentially BIG) are two separate wells which are targeting gas and not oil and have not been drilled yet, these will get some attention towards the end of the year when hopefully there will be gas infastructure and distribution systems in place to handle it. If not they will drill them, test them and close them in until the gas can be distributed
Based on the so far combination of success and a large portion of good fortune, if that combination continues over the next 12-18 months with the next oil well (about to be drilled) and the following 2 wells testing the gas are a success then you will be in for a decent multiple of todays share price unless they decide to obliterate it again with a cash call. Beware though, this bulletin board is full of self proclaimed experts that have never been near a drilling rig or worked in the oil and gas industry, they also conduct research on various pieces of information that may or may not be relevant to what is actually happening and then turn it into gospel fact which is often a world away from reality so take everything with a pinch of salt. As xxxyyyzzz said, they will drill the next oil well (38), move on to the two gas wells, there is also another oil well in one of the other areas under Block's control (Norio) which should be drilled in the not too distant future. I would suggest you have a look at what the terms 2p and 2c reserves mean if you don't already know and get and idea of what a Billion cubic feet of gas looks like and how much it is worth. In any case, the chances are in favour of the SP going upwards from here over the next 2-3, months but of course, you need to work that out for yourself.
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