Member Info for Genghis15

Will it still be a "mad" low SP if the next ops update says the 6 well has had to be coked back bcos its pulling too hard on the water pocket? No.

Equally, it certainly will look that way if the next update says 6 is up to 15k bpd + with no increase in WC, and stable flow.

That is the binary nature of things here atm.

DB is the most bumbling CEO I have ever seen in terms of his presentation skills. It is sometimes embarrassing to watch. However, I try to look thru that, focus on the facts of the business, and hope that his commercial and managerial skills compensate.
I'm sure he's a lovely and genuine chap, but his rambling often drifts into the subjective rather than imparting real facts.

That said, I'm in ; the story here seems compelling, and presentation is not everything, as the finely honed but ultimately disastrous skills of James Parsons demonstrated.

https://www.bloomberg.com/news/articles/2020-06-07/brent-oil-climbs-toward-43-after-opec-extends-production-cuts?sref=866aH6XX

https://www.reuters.com/article/us-research-morganstanley-oil/morgan-stanley-flags-risk-oil-price-rally-will-lead-to-a-fall-idUSKBN23F15I

Quite right. This "simple" sidetrack will likely cost around the same as a new drill, so mb $35m. Could it all be planned, get OGA approval, rig hire, and tieback this year? Doubt it.

What I'm saying is that, yes, all those things were known Friday. But today's ops update only stated a small rise to 12k bpd just 3 days ago, too soon to judge if sustainable. Altho on DST it showed 15k bpd, we need to see if higher rates are 1) stable and sustainable at low drawdown 2) do not pull on the water pocket and drive up the water cut from well 6. Ideally, we would like to see mention of returning both wells to production.

And the mention of modelling a higher OWC, even tho they call it "conservatism" will spook some. Why even say it, unless they feel obliged to flag the possibility? In some investors' minds (not mine, apart from a very small nagging gremlin) that raises the possibility that RT's interpretation of perched water could, just, be wrong, and we are pulling on the aquifer. And that would be very serious indeed.

We are NOT "other oilies", and not all of them are up 20% today either.

If you are comparing to those with production, try to find one producing from an offshore field in 2.5B yo basement granite from an unproven reservoir whose wells are interfering with each other, and has cut production guidance by an unspecified amount.

"higher rates in 3", should of course be "6".

Much to agree with Mr Z.

Couple observations.
2. Yes, 12k bpd, and we can be pretty sure it can go considerably higher.. But there is some uncertainty given the modelled water pocket which BOTH wells are thought to be pulling on, whether higher rates in 3 will lead to a harder pull on that pocket, and see the WC go up. In due course, we also need to see if 7z can be turned back on, and at what rate/WC, and can interference/turbulence be controlled/managed.

3. Commitments easily covered? Mb, but depends what they want/are obliged to do. If they decide well behaviour means a 3rd well on Lancaster this year (and time is getting short for that) things could get tight.

4. Reckon RK was going anyway, cos of his CEO role at VOG.

I knew if you typed enuff posts, sooner or later one wouldmake some sense.

My guess is that the BoD, under pressure from instis, and prolyl Kerogen in particular, pushed Trice out bcos continuing geological disappointments mean they lost faith.

But what price a sale now, with the well interference/water issues still hanging over us?

I can't see a major coming in now unless there's more clarity on that. Any TO would be $500m+ incl CBs, still a lot to pay for a troublesome reservoir and a whole lot of future capex.

Those blaming RT for SP performance are way off, except in the abstract that his FB concept has hit unforeseen problems.
No new BoD would have produced different drilling results or production, which are the things that matter.

At times this seems ore like a pl
ayground mob than a financial discussion board.

Do your TO calcs again, taking off $220m for the CBs.

We had plenty of Big Oil experience on BoD already. The increased rate has not yet had time to test sustainability, and needs to go much higher for revenue targets to be met.
And EVERY new mgt says it is tightening cost control, meaningless.

I think 6 has been at that cut for a while.

But you're right that one of the big worries is that 6 now pulls harder on the same water pocket as caused ac much bigger cut in 7z.
Also na bit concerning is the ref in RNS to modelling (for conservatism) a possible higher OWC.

manager
"perhaps some of the new posters know more than all you long timers put together, "

Perhaps so.

But reputations have to be earnt, and any new poster will be judged on their posts. If you feel you are being judged unfairly, step up to the plate, earn the respect.

Ac lot of hypers and rampers on here these days, best ignored.

As AS points out, the next well behaviour update is key to whether this SP rerates higher or lower. Other factors involved, of course, but flow rates/interference/water cut news is critical.

From 4 May RNs
West Newton A
"Once the required personnel and equipment are available the testing operations will recommence."

West Newton B
Access works started 4 May, est time needed 5-6 weeks.

Those two timelines must mean a positive RNS soon, with any luck. Tempted me into topping up today, anyway.

Expect nothing, no one knows.

If there are still cheap assets about, S&S might decide to use all profits to double down and repeat ; as long as they've monetised existing assets at a handsome profit, why not? Their model would have been validated, so rinse ans repeat, using the capital created to multiply again.

It would get my vote, and I'll bet most instis, too.

More technical ppl than me can confirm, but as I understand it, it means that the nergy imparteds by the pump to raise the oil to the vessel, means less energy from the reservoir pressure is expended in doing so. So the drop in pressure for any given flowrates is lessened.

Hope I've got that right!

I suggest you read the 22 May RNS.