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Not a bad interview.
Basically testing is looking promising - Doesn't sound like Z13 was included after all
Year end 1k bopd = about $18m a year in revenue
Seeing if they can change the agreement with the II to drill into Eldari B - Zone 19 and beyond.
So much as i expected - this year is about delinting and proving up zones - 2019/2020 will be about full scale production.
Its always a hard decision to make - but you have to do what you thinks right.
I try to not let me own personal financial goals inform my investment decisions as it can prevent you achieving full value from an investment.
For example - Say i "need" frontera to get to 1p to buy a house/car in the next 6 months etc - how are you valuing your investment? Is it based on what you hope/need/want or based on what the company is doing and saying.
To add to my previous post.
It’s also worth remebering that around a year ago the company was in discussions with industry partners to bring taribani into production.
I don’t think those partnerships have gone away, I expect the company is not willing to farm out currently on the terms being offered by these parties.
This is why ZAZA has been talking about testing and deiniating each zone. If frontera are able to prove zones 9/13/14/15/19 etc the risk for the partner decreases allowing for Moreno favourable terms.
Going to stick my neck out here - I would expect to see a deal in 2019 with a partner if the wells are able to sustain a decent BOPD for the taribani field.
For those that haven't yet i think its well worth digging through the old CPRs for little gems of info.
If you look at the CPR from 2005 it has a clear paragraph around the 25 year production conversion once a field is declared commercial.
I would assume that if all goes well with taribani with the results from T35, Dino2 and T39 the company could attribute a small portion of the 130 mmbls to P1, and the majority to P2. Once this has been booked I would expect the field would be declared commercial shortly after securing it for 25 years of production.
We then have until Nov 2022 (study program) to do the same for all other areas within block 12. Its hard to say what will happen but probably a farm in/out of Taribani, a sale or a finance arrangement based on the P1/P2 numbers.
I would prefer to see a cash injected via a sale/farmin/out as this would provide much needed funds to shoot the 3d in MK
So really its all eyes on these sustained flow rates
Poor completion practices from the soviet area and fronteras drilling operations. They were unable to control the sediment influx. These wells will be key to seeing if the company has finally cracked this geology unlocked 130 ish mmbls of oil in taribani.
I wouldn’t be so sure Dustin is still around. If you look at he latest RNS - the quail infield expert who has authorised the results is someone else
There are lots of differences between the companies but the main point is my rebuttal to the comment you made about exploration companies spending lots of cash and taking many years to bring first oil.
I would also add that thier PSA terms are far less favourable than fronteras also.
Do you mean that hurricanes cost per barrel is $50-$55 a barrel va fronteras $10-15? Interestingly they have a similar amount of recoverable oil in one of their prospects that’s coming online to taribani - yet thier market cap is £1b
You talk like it’s uncommon for exploration company’s to spend a lot of cash and generate little revenue. Hurricane energy has been in the North Sea for 14 years and made a loss every year. They have also spent hundreds of millions of pounds. They are expecting first oil in q1 2019 after 14 years of exploration
I spent some time looking at hurricane today.
Totally different company etc etc but i draw a few points to consider.
They have estimated that the cost for production in 2018/2019 will be $50/pb vs Frontera $15/pb - this is why Zaza and SN kept banging on about low cost onshore production.
Its also interesting to see that once you have some booked reserves the finance routes really do open up - Hurricane have managed to get hundreds of millions of dollers to continue exploring and producing their assets and they are :-
Offshore
Expensive to produce
Higher risk
far less favorable PSA terms
So lets get these zones proved up - 9,13,14,15,19,21,22 etc etc get a CPR done and book some reserves - we may not need a JV/partner if the company can attribute 50mmbls of oil into p1 although i think its very likely they will farm in/out to be honest.
It will be around 1k bopd currently.
For those that were wondering.
The best choke size resulted in a BOPD of around 630 so i would assumed, with the other zones t-39 is looking at over a 1k bopd well.
absolutely.
I posted a while back that the data gathered from UD2 would be as important, if not more important than if it flowed or not.
People asking why its taken so long to release the result - they may have had to get contractors on site with equipment etc to assess what was going on down the hole - this isnt something that takes a week or two.
Excellent result on t-39.
Related parties such as Dustin must consult with the Nomad before buying shares.
Aim rule 13 covers this.
I do not think the Nomad would sin this off given the current EWT's...
I think your missing the point that as Dustin will be so close to the ground on the current operations there is no way he would he allowed to buy shares as it would defiantly be very close to insider trading.
What I think has happened is...
Frontera have declared the feasibility of commercial production- we know this form an RNS... however they have stated they require further works to confirm.
This has triggered a study programme that allow some a further 5 years with no relinquishment... perhaps the GG really does not like that!
I wonder if the arbitration is in relation to this part of the PSA.
“Save as otherwise agreed between Frontera Georgia, the Agency, and GOGC, Frontera Georgia will relinquish its rights to Block 12 in respect of any area outside of any Development Area at the end of the Exploration Phase.”
The exploration phase ended in nov 2017 - frontera have stated they are now in a study period - so no relinquishment is required, perhaps the GG disagree!
Also - does anyone know what happens when the whole PSC expires in 2022
Just some musings....
GG tie up frontera in various arbitration activities for years
No JV/Farm in etc due to legal issues
4 years pass and study period expires
Block gets handed back to GG anyway.
Some say Exxon etc would invest... I VERY much doubt that if there was an active arbitration
Yes not great at all - if the article is correct that is. I hadn’t expected the arbitration request was due to the GG trying to redefine terms, but I would appear this is actually a land grab. I wouldn’t make too many judgements just yet as there has been no communication from official sources. One does have to wonder if the GG does attempt this - who would invest in Georgia?
Lulu, I think you need to back to shorters school. You can’t make more than 100% in a single short trade