Yesterday17 Oct 2024 08:45
So what did we learn yesterday? This is my take
As expected vertical wells are much, much cheaper to drill. They will be drilled in areas of proven production and provide valuable data. If they produce half the flow rate but cost less than half the amount to drill, they are a no brainer economically.
Income from the initial 18 month WP should be sufficient to fund further programs going forward and the full field development. He reiterated a target of 8 mmscfd for end 2025. He said that would be 4 mmscfd from the horizontal well and 2 mmscfd from each of the vertical wells. That implies the workovers won't be contributing much by then. Expected peak production from the full field development is around 30 mmscfd. Each million cu ft gives about 40 barrels of condendate.
77h is at the end of the list of workovers because it is producing revenue at the moment and they don't want to stop that production. Increasing the diameter of the production tubing should increase the flow rate. They may still plug the old zones later.
They still intend to connect to the high pressure grid, with it's higher prices, when production reaches 6 to 8 mmscfd. Previously they said this will be at around 10 mmscfd.
Current gas price is 9 usd per MCF.
( Thousand cubic feet).
They have been doing road shows with Panmure to try to attract institutional investors but with limited success. Any investments must be less than 3% or they would have been an rns with a TR1.
Panmure's target of 0.9 was arrived at independently from Syn. Lol.
There are interested parties in the uk ccs but Harbour are supportive so this is now less urgent. May still add a partner later. Would have thought it was still urgent if it staved off the need for a raise. Reiterated that it would be a merchant scheme independent of government money. Seems odd to turn down free money, to say the least, especially as they say they are looking to the Indian government to finance a CCS pilot there.
Sounds like they are still spending a fair bit on uk ccs preparations.
Unsurprisingly, funding wasn't mentioned. A raise looks inevitable now. Probably fairly early in the new year. Let's hope the dilution isn't too damaging.
So, as I said, more informative than expected. The question remains, why don't the market or institutional investors believe it will succeed ? Surely it can only be because they don't think the target flow rates are achievable. Let's hope that by late next year that is proved wrong.
Gla.
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