Member Info for Gogsy

The P588 licence which is the core part of GPA is anticipated to expire on 3 June 2023 (NSTA website). To avoid this they theoretically need a fully sanctioned development plan (meaning full board approval with funds identified and allocated) but might get away with slightly less than that. They will still need a development plan and partners in place. They have a lot to do in just 2 months. A Sales and Purchase Agreement on something like this would normally take months.

Applications for the 33rd licensing round are done purely on the basis of points awarded to the application. There is a published marking scheme. The winners of Platypus are likely to be companies that can immediately commit to development. The owners of Cleeton have a real advantage if they decided to go for it. Parkmead would need to find partners who could immediately fund the full development costs, say around £100mm gross. Prior participation will help with the technical bits of the application but it will all come down to having the cash and a plan to develop immediately

As expected the P2406 licence (Davaar) has been relinquished. They might reapply for the blocks in the next licensing round which is due to be announced very soon, but it might be difficult coming up with a viable work programme.

It started 2018. Five year Phase A is possible but unusual. I have not seen the licence commitments but probably began off as a 3 year Phase A. Report in 2021 said Phase A extended. I had assumed by a year but perhaps it is 2. But the initial term ends 2026, which would make it very tight to go to Phase C in 2023, maybe drill in 2024 more likely 2025 and then get a development planned and FID by 2026

Depends on exactly what they plan to do, but assuming they are not going to test the Jurassic around £20-25M total cost so £12.5M to PMG. Testing Jurassic would double that.
Licensing round this year will see Platypus up for grabs. Whoever bids the most valuable work programme will get it. PMG has no particular advantage on open bidding round. PMG may go for Platypus and other opportunities.
Likely that since the Davaar licence has not been announced as going to phase C that it will be dropped at the end of this month

Most of it is in the 10s of mD. That is okay but hard work. For oil 1mD is the limit for flow. Be careful of streaks of better permeability as they can water out very quickly. How the field behaves over time is to do with the arrangement of those better streaks. If small localised zones it might well help, if big sheets you might need to be careful

The issue is not the percentage sulphur but the amount of H2S. Johan Sverdrup has less than 1ppm. Scott is considered high at 150ppm. H2S is really nasty. Very poisonous in even quite small amounts (500ppm in air would kill you in seconds and 10ppm would cause serious issues). It also turns to sulphuric acid as soon as it comes into contact with water. For Perth this means 2 things, firstly it has to use a lot of very expensive coated pipework and secondly it needs to scrub the H2S from the oil before it is transported. Scrubbing the H2S (sweetening the oil) is pretty simple. You need an amine plant. These are very common on fields in the Middle East. They also remove the CO2 which is a bonus. They have issues, however. Amine plants are physically pretty big so difficult to work into offshore environments. They require power, which given the drive to net zero could be an issue. They also do not take kindly to shaking about on an FPSO in bad weather.
The other parameters for Perth are not great but not that bad. Oil gravity above 30 means it is not likely to be too viscous, although the wax content could cause issues (might need heated pipes). The reservoir porosity at 13% is on the low side for an oil field. Bits of Scott are 20% and some fields get up above 30%. Strictly porosity is not the issue, rather it is permeability but usually the two go hand in hand. The oil saturation at 70% indicates lowish permeability (you might hope for 80%). That probably means that you are going to struggle to get 20% of the oil in place out. It also means more wells or, more likely, horizontal wells to try to get rates and recover up. I fear Perth is becoming more difficult as the environmental pressure increase. They will certainly not be able to flare away the CO2 and scrubbed sulphur as might have been the case a few years ago.

Westwood report
https://atlas.westwoodenergy.com/report?wge_id=amcTJNaQEXtH1J82XwccK5Vje8+GKYK2t4+TOUufDtLG183DvZX5F3ncJKysxzbhu/n46J7UMRBET9CvNOOaN0=
The OGA are not pulling the licence, rather they are declining to extend it. The exact same thing happened on at least one other licence operated by Apache. One partner wanted to extend the licence, while the others withdrew, but the OGA declined due to failure to demonstrate a clear plan to get to sanction including funding

I cannot quote the Westwood Global report as that is copyrighted. But it was quite clear that because Parkmead (10% and operator) and CalEnergy (90%) could not demonstrate funding the licence was not extended. That does not mean that they did not spend a lot of time and effort trying to get it over the line, just that they did not manage to do so. Also I cannot see anything of P1242 left on the OGA website. If you look under Parkmead the licence and/or block is not there. It is just possible that Westwood got it wrong and that there is some administrative stuff going on in the background but usually when a licence lapses it cannot be resurrected. There is a partial relinquishment on the licence at the end of last year and there is a report on that but this is different

Apart from the licence that it sits in is relinquished. I have now seen this confirmed by Westwood Global and the block shows up as unlicensed on all OGA maps. It is difficult to get a licence that covers Platypus until the next licensing round, probably late 2022 or early 2023. There are weird out of round awards but they are pretty rare. Potentially the Tolmount partnership could apply with a reasonable chance of success. If in a round any company can bid for the block.

I think that this means that the licence has not carried into the third term and is therefore relinquished. The OGA will not post a formal announcement if this is the case. They have been reluctant to allow licences to carry into thrird terms unless a clear path to production including funding is identified

With Davaar, I suspect that it is on a 3 year drill or drop from the date of award. They have 3 years to decide to drill, then 3 years to drill and decide to move forward and develop. Given the lack of any announcement on drilling, it may be dropped at the end of this year, although I suspect that theycould get an extension because of COVID

According to the OGA website the licence with Sanda in it, is no longer active - so given up

Apart from the fact that FPM walked away (not sold out ) from Perth ascribing it zero value seeing it as unlikely to be developed. I suspect that operated big old platforms is not what LBE are looking for but I could be wrong

From the previous press releases the rig is warm stacked. This is probably irrelevant to Perth. The rig is almost certainly incapable of drilling the 10km to Perth. Maybe it could drill Dolphin but that is a small part of GPA. GPA would rely on a subsea template with wells drilled by a mobile drilling rig and then a tie back to Scott by seabed pipleines. Oil processing would then be done on Scott. The sour nature of the Perth crude make the pipelines very expensive and will also mean a lot of modifications need to be done on Scott. The question is can this be done economically. Seen no confirmation that the FEED study has actually been awarded to anyone. That is a big piece of work so I would expect some kind of announcement somewhere if contracts had been signed. No contracts - no real progress

You need to sell. If you do not do so one of 2 things will happen. Either DNO will get more than 90% of shares and force you to sell at 160 or they will not manage that but will get to 75% and delist the company. At that point you have no easy way of selling the shares and DNO can do what they want with the company. A bad outcome

H2S is clearly the big issue and dealing with it is not simple offshore. This means others will not cooperate with you unless you pick up the tab. Most plant to get rid of it needs a lot of space and from recollection that is not something Scott is blessed with. So Verbier is a useful discovery but is further away than Tweedsmuir from Perth. That was developed 10 years ago as a subsea tie back to Piper going past Scott in the process. It is around the same size as Verbier. Maybe Scott has been mothballed rather than abandoned hoping that Verbier can come that way. Simpler and cheaper to deal with than the nasty crude from PDL. Verbier might just piggy back on that line depending on appraisal drilling results. That might be the simplest and most economic route for them. Equinor will not do anything other than what is most profitable for themselves. The key for this is making PDL work and if that happens the upside is the additional sour discoveries. Technology has come on but not is such great leaps and bounds as to radically change the economics. The study by Tracs is unlikely to suddenly magic up more oil than was there before, rather it will give potential backers more confidence that what Parkmead says is there is there. You might get a small incremental improvement. Lots of smart people have been looking at this for a long time. The hope is for small incremental improvements in the project to improve its economics and make it a go. Then it is just a case of getting the capital. Likely to be a very pricey project so hundreds of millions

People here are confusing in place volumes and recoverable volumes. It is clear that Tom et al are talking about 1 billion barrels in place. Read their words carefully. They make it clear they are talking about in place volumes. Only a proportion of that is recoverable. As an indication Perth Dolphin and Lowlander have 400million barrels in place but it set to recover 80 (from company website). Recovering around 20% of in place is about normal. Modern wells might get 5-25 million barrels per well depending on circumstances and design. There is a reason that fields discovered and appraised 20 years ago have not been developed. Scott platform has been there for 25 years. It has had capacity for at least the last ten. Making this happen is not impossible but nor is it simple. To me this is a buy essentially as a gamble. Worth a lot if they can solve all the problems, worth 35p (NAV) if not