Member Info for happysparrow

Informative article and report:

https://reliefweb.int/report/colombia/

This was the original plan: (Feb 1st RNS)

10 well drilling program:

- 3 C7 wells at RCE, each expected to add initial 300-500 bbls/d net to Arrow

- 3 wells at CN, each expected to add initial 300-500 bbls/d net to Arrow

- 2 Gacheta wells at RCE, each expected to add initial 200-400 bbls/d net to Arrow

- -2 wells at Oso Pardo, each expected to add initial 300-500 bbls/d net to Arrow

Today's RNS:

"Upcoming Drilling

After the CN-3 well is completed, the rig will move to the Rio Cravo Este ("RCE") field to drill two dedicated Gacheta wells, RCE-6 and RCE-7. A third well, Rio Cravo Sur-2 ("RCS"), is also expected to be drilled at that time targeting the C7 formation.

Following completion of the RCE and RCS wells, the rig will move back to the CN field where low risk infill drilling is expected to begin before the end of 2023.

Incorporating CN-1, total Corporate production is between 2,700 and 2,900 boe/d. "

Thus, if we add 1,000 bopd for CN2 + CN3, and 400 bopd for the 2 gatcheta wells (they may be on the low side?), and zero for the two Oso Pardo wells (now to be drilled in 2024?) but 300 bopd from the extra RCS well - with infill drilling (beginning) matching the decline rate - but with the 500 boepd from the Canadian assets not contributing much to the bottom line, and the Capella production written off - if drills are successful, I would go for a 2023 year-end production figure of about 4500 bopd. (with OP wells, and more CN wells, for 2024).

A highly creditable performance.

Https://newsday.co.tt/2023/06/15/trinidad-and-tobagos-rocks-and-their-influence-on-our-various-sectors/

Https://www.guardian.co.tt/news/as-floods-subside-tt-under-strong-winds-alert-6.2.1729942.bf76a5bbea

Includes Ortoire River

"But we will continue to work on our hydrocarbon-based economy until the last (drop of) oil comes out of the ground and until the last gas is out of the ground. That’s what we are going to do.” Stuart Young.

https://newsday.co.tt/2023/06/08/stuart-young-defends-energy-sector-at-bbc-world-questions-forum-thank-god-for-oil-gas/

Good to see that harsh blue somewhat toned down.

The good news is that it is only June 8th (I wasn't expecting results for another 2 weeks), so they are continuing the drilling programme at a very demanding pace.

Too, note: 'These results expand and accelerate the Carrizales Norte development plan beyond three wells.'. Excellent news.

Yes, bistable, fair comment. It's been a farce at TXP for a long time and shareholders have been strung along with a 'wall of cash' for almost two years. But now is the time to be in TXP - just as perhaps JSE might look better in a year or two.

GLA, wherever you place your bets.

Have been reading your posts of late. You might want to have another look at TXP where I have been heavily invested for a long long time. They too did a similar low ball placing at 55p when they said they would never do one, and the price has been stuck at about that price ever since. However, likely to double in price in June and July, if the management and country get their credibility back by actually delivering the gas project on time.

Hopefully this is an opportunity to get some of your money back from what seems a very shabby episode here.

Sorry for everyone's loss today. Maybe this post is of help.

Apologies for off-topic.

Rob - this was from CFO (courtesy of EHL on advfn - thanks):

From Joe, probably no RNS Monday, however the significance of ubaque was the reason for an RNS on that particular zone, not disappointed by the fact that C7 will go straight to production, this mean they already know its potential!:Our preference is to press release the testing data once all the testing is complete, similar to the RCE wells. The Ubaque was such a material event for the company that our advisors suggested we press release it right away. ThanksJoe

From JM on Discord yesterday (thanks); Paul Baay's comment now added to the previous Reuter's report:

'"If what is reported is true, Touchstone is happy that we got the Cipero block because that was our number one," said Paul Baay, Touchstone's chief executive.

Https://trinidadexpress.com/business/local/we-must-recover-as-much-gas-as-we-can/article_1634f55c-fe84-11ed-8dad-b35c4250f713.html

A couple of posts from EHL on Advfn (Thank you for sharing) and worth noting - replies from AXL's CFO:

From cfo, this could be a superb producer:Thank you. We are very excited about the discovery. Yes, the pump was on while testing. This is normal course as load fluid needs to be recovered. Yes, the AHN will allow us to perforate and produce all zones in the Ubaque together. We are not able to mix the Ubaque production with C7 or Gacheta. Hope I answered your question. ThanksJoe.

From Joe :In the CN-1 well there are three formations which we will be testing. Some of the formations have more than one zone of interest. The first formation that we tested was the Ubaque formation. We tested it over three different periods: o The first flow period was held for 23 hours and showed an average oil rate of 491 bopd gross.o The second flow period was for 18 hours and showed an average oil rate of 861 bopd gross, and,o The third flow period was held for 17 hours and showed an average oil rate of 1134 bopd.· Oil production tested at a peak rate of 1,222 bopd, and a final stabilized rate of 1,134 bopd. The next formation that we are testing is the Gacheta. We plan to have two separate tests of the Gacheta formations, the Gacheta C zone and the Gacheta A zone. The fourth test will be on the C7 formation. Expectations are that two zones will be tested in the C7 formation at the same time. We will then put the well on formation from one of the formations, my guess is that we will produce the C7 formation initially because of the experience we have had with the C7 at RCE. After that we want to move the rig to CN-2 and begin drilling the second well. Once CN-2 is on production we expect to move the rig to CN-3 to begin drilling. I hope that helps with your understanding. Let me know if I can be of anymore assistance. Joe

Agreed to a large extent, Sturm. Regarding acreage we've got more than enough to be getting on with already. We bid for 5 prospects and were allocated 2 (one with further negotiation). I expect we are not too disappointed to have not got them all, and perhaps only put in low-bid offers for some/most of them anyway.

What we really wanted imo, looking at the map, is the Cipero prospect (which we've got), and the Rio Claro, Balata East and Balata East Deep Horizons ("Balata Deep") block from the asset swap, not least because they have an existing liquids facility and access to an 18km pipeline.

Charuma is perhaps a step too far - and maybe we put in low-ball bid for it? However, it is perhaps politic to improve our Charuma bid to keep the Ministry happy and let them have a 'win' in order to keep them co-operative with our company on the asset swap ? - although they can hardly be unhappy with our finds at Cascadura, Coro and Royston so far.

I can see us disposing of some more of, or all, our legacy production before long, once the Ortoire block is up and running.

Just some thoughts.

ATB

What's not to like?

Firstly, let's be clear - this is an excellent result - 567 bopd net (expectations of 350 bopd) - with 2 more zones to test.

But, as you asked the question:

API of 13.5 (RCE5 was 28.9)

water cut 28.3% (RCE5 was 12%)

CN-2 and entire drilling programme put back 2 or 3 weeks as testing takes longer. [Note: Outlook is now to drill 2 CN wells and 2 RCE (Gacheta) wells by year end + 2 Oso Pardo wells with No Date given. Seems somewhat conservative?]

No suggestion of co-mingling production from the various zones as yet?

Average quarterly production down from 1736 boed to 1635 boed.

Ebitda and cash balance slightly down on previous quarter.

That said, and out of the way, my view is that this proving up of the CN field as commercial is a step-change in AXL as an investment, opening up another field, reducing risk. 567 bopd is almost twice company expectations. And with two more zones to test - (although, most likely, only one zone will be produced from) - which will add to reserves, and increase our value to buyers when the company is sold (which is MA's usual strategy - and would be a good one given Colombia's high political risk).

AB76 on advfn Trin points out that 'the government is still negotiating with the sole bidders for the deep water round even though licences were due to be granted last September.

Article by Curtis Williams: https://www.reuters.com/business/energy/trinidad-prepared-reject-bp-shell-offshore-exploration-bids-sources-2022-12-28/

I very much doubt we won't improve our offer rather than walk away.

At the end of the day it means more to our small company to get hold of the asset than it does to some here today, gone tomorrow, Energy Minister - one, by the way, who is doing his job for his country by squeezing more out of us.

I expect our original bid left some room to up it.

Hopefully, this is where we get some payback from the in-country influence that we have been slowly cultivating [Energy Chamber, Journalists (Curtis Williams), ESG programmes, etc].

Paul is a likeable fellow (even though he has strung us along with his 'Wall of Cash' for the last 2 years), and that should be where he excels in this kind of negotiation. A compromise will be reached.

Primera Oil and Gas Ltd submitted the most bids, for five blocks, namely Cipero, Tulsa, Charuma, St Mary's and Guayaguayare Onshore.

Eco Oil and Gas Solutions bid for three blocks – Tulsa, Cipero and Guayaguayare Onshore.

Hunter Resources Corporation made three bids – Buenos Ayres, South West Peninsula Onshore and St Mary's.

Decker Petroleum Marketing Company Ltd and AV Oil and Gas Ltd each made one bid, that is for St Mary's.

NABI Construction bid only for Aripero.

Challenger Energy Group bid only for Guayaguayare Onshore.

Trinity Exploration and Production TT Ltd bid for only Buenos Ayres.

No company bid for the Cory D, Cory F and South West Peninsula Offshore blocks.

https://newsday.co.tt/2023/01/09/government-receives-16-bids-for-onshore-oil-exploration/

From the above, only TXP bid on Charuma; and only Hunter Resources bid on SW Peninsular Onshore.

'The energy ministry expects to pursue negotiations with companies that bid on the two unawarded blocks to gauge whether they might improve their offers, cabinet sources told Reuters'

The government wants more money from us (although there are no other bidders).

And they've got us over a barrel (RNS 9th Jan):

'Under the Agreement, Touchstone has agreed to swap its operated 100% working interests in the Fyzabad, San Francique and Barrackpore producing blocks for the counterparty's working interest in the Rio Claro,

Balata East and Balata Deep blocks for no cash consideration with the swap becoming effective upon closing. The Agreement remains subject to certain closing conditions, including receipt of applicable regulatory approvals and an extension of the Rio Claro Exploration and Production (Public Petroleum

Rights) Licence (the "Rio Claro Licence"), and is expected to close prior to the end of 2023.

The 100% working interest Balata East block is governed by an Enhanced Production Service Contract with Heritage Petroleum Company Limited ("Heritage") in the shallow horizon that is effective through June

30, 2030. The Balata Deep asset is a 100% working interest in the area identified in the Balata East block from a depth of 5,000 feet downwards with no limit. The Balata Deep block is governed by an Exploration and Production (Public Petroleum Rights) Licence with the Trinidad and Tobago Ministry of Energy and Energy Industries ("MEEI"), where the initial exploration period expires August 13, 2025. The Rio Claro Licence with the MEEI is currently expired, and an extension through August 2025 is a condition precedent

for closing. The Rio Claro Licence is for an 80% operated working interest, with Heritage holding the remaining 20% working interest.'

Perhaps this is one reason why we took an extra $7 million loan?

'... It does not mean that we are not always concerned about consistent gas supplies from upstream producers whom the Government and NGC have absolutely no control over what happens with respect to their production, save to being in a position, as we have done consistently, to ensure that all that needs to be done on our part is done, so there would be a maintained production of natural gas,” Young said.'

https://trinidadexpress.com/business/local/ngc-still-plagued-with-supply-challenges/article_5bb3c524-f44b-11ed-bdda-43f9031bbb8b.html

You have to laugh.

Green would have blended in better - and better for the birds.

https://birdfact.com/articles/can-birds-see-color