Member Info for InJamesweTrust

Dont think the poster was saying they are selling now, more that they mY sell into a rise which has historically been the case with CA and think Kerogen restriction lifts around now (subject to being in a close period otherwise).
However, given the proximity of CMD and potential for some quite detailed EPS update to come from it they may decide to hold through.

Phoebus
Give it 2yrs and it will be at Hammerhead.
This is the crux, the medium API fields are cash positive in 2.5yrs at $60 oil so this is likely to maybe take 3.5yrs leaving 12 years plus of significant cashflow.

Let's not get over excited - Canadian star sands are not far off nor is Syrian Heavy.
Hess comments are pretty clear their oil is heavy and the sulphur can be removed. If you've a field of 700m barrels.plus you can support a 200k bopd FPSO for getting on 15yrs. Even if you're making $25 per barrel instead of $35-40 the economics are still excellent.

Tullow mgmt currently appear a bit overwhelmed and are getting squeezed in Africa as well as making their own mistakes across multiple fields. This more than Guyana is the reason for the share price there.
Alas, I think they chose to use a bad update to kitchen sink the Guyana news. Without the full info they have let the news out with all their other crap to get the worst out of the way and screwed Eco in the process. Once analysis comes back they can then be more confident about 2020 plans and present a good message which for them is much needed. The market can be a cruel mistress but the baldness of Tullows update is extremely questionable.
However, as Sankeys indicates the oil can be produced and as Proselenses (inadvertently I guess) has confirmed the discount is around 5% as indicated by Gil. For a 5% discount a 65% share price fall is a bit much (even given the extra weight of reduced net cashflow impact being more like 10%).
The Stabroek fields are cash positive in under 3 yrs at $60 oil and maybe it means ours take 3.5yrs. That is still fast compared to the time taken for many other developments to even produce cash.

Proselenses
You really are an arse posting a chart showing $41 to the casual observer when the chart shows WTI (benchmark) is $43 so the discount is around 5% for heavy sour oil. The chart says nothing of viscosity, over pressure or well temperature all of which are favourable in Orinduik.
Sankeys post is the most sensible I have seen and confirms sulphur can be removed and the oil can be blended or used as is. There is no shortage of oil to blend it with.
Joe not commercial stand alone but Jimmy is an exact replica and Rappu sits beneath so the team have already proven up a shed load of oil which even at 5% sulphur and 12°API is commercial and warrants a discount of maybe 25%.
Guyana is about to become a major production hub and plans will be afoot to introduce refining capacity and other infrastructure as required but GoM is well serviced too. The share has dropped 65% from highs so I'd say the discount should now be mostly baked in.

Proselenses
I notice the absence of attribution in the article.
With hydrogen deslfurisation the oil remains usable and this process can eliminate 60% of sulfur from the oil and cracking can separate some of the heavier elements.
We know your negative on the stock but the litmus test is what is to be drilled in 2020 and the partners may be aiming for 2bn barrels of principally Cretaceous exploration and proving the 5-700m barrels in Jethro and the channel.
2.7bn barrels of likely Cretaceous medium sweet oil in the main of which Eco share is over 400m barrels. However, you're right they might as well put up the shutters and listen to dip****s like you

Filling Gil's order!

Proselenses
In your ultimate wisdom, what do you think 1.5% of a field moving to production in 3.5yrs will represent on a cost basis over the next 6 months? I would suggest a couple of million at most and that is probably very conservative.
Eco can easily enter into a funding agreement with Africa oil that assigns a share of profit derived from Hammerhead/AN Other field.
The scaremongering over something demonstrably *******s says alot about you.

Trek,
The sulphur content is manageable from everything I have been able to read. The economics by my reckoning are 20-25% different and the geology indicates oil in older source rock layers have higher likelihood of being medium API.
The valuation attached currently is not down to fundamentals, I mentioned before we are capitalised at less than our likely share of Hammerhead or less than our share of Jethro on $2 per barrel plus cash. With no value for Joe and none applied to rest of the field.

The RNS doesn't say much more than previous updates. However, it doesn't say uncommercial and makes clear the likely commerciality. Wherever I have looked I've not seen a sulphur content that is too high and additionally it seems heavier oil is in younger rock - this we know is the Pliocene and Tertuary so can reasonably expect lighter oil in Cretaceous.
They're using the same imaging for the Cretaceous as used to intersect directly the zones in Joe and Jethro so April/May should be interesting as drilling commences. Expect CPR before drilling announcement.

Think it was mentioned in the Maccamd quote since removed on ADVFN "Financial statement RNS planned for this Wednesday."

People (Phoebus on ADVFN) seem to be scaremongering that nobody will touch heavy sour oil. Ultimately money talks and if the project is big enough and the economics are right then heavy oil will be produced and sulphur content removed.
This has dropped two thirds from highs which by any measure is an over reaction.
Even if the value of Jethro and its channel is considered to be $2 a barrel that is $180m to Eco or a 40% premium to current MCAP regardless of remainder of licence. Given cost of finding oil it stretches credibility to consider that value here is beneath the above.
Hopefully, Gil can confirm the 2 drills are scheduled in tomorrow's RNS with perhaps another contemplated post Carapa (my guess would be Rappu) but dont expect anything on the 3rd drill.
A sign of the potential of the block, the 1bn barrel 3 layer target mentioned by Macccam on ADVFN could represent multiple shapes on the prospect map. So on top of Jethro, Joe and Hammerhead there are multiple billion barrel plus prospects.
Let's see where she goes, seems to be a shorter/seller in Canada at work based on pattern yesterday and today.

Genghis
The 50% didn't stop the drop on WD so should not prevent a decent rise here. The continuing doldrums of the 40's in spite of reaching production, logging (almost) 6 months of data and hopefully soon 2 successful drills under their belt should one would expect see this move.
Between now and CMD if news remains good I expect it shall.

Just wondering based.on Maccam update if there is another reason to be referencing 4 drills in funding. If the initial drill is targeting 3 zones and 1bn barrels then it will cost a material amount more than a standard drill. If the other drill is the same then again higher cost holds true - this may give greater bang per buck.

Reading between the lines, if Tullow have confirmed a drill targeting 3 zones/layers of rock that to me indicates they are still up for drilling Tertiary targets along with the Cretaceous.
Helps if they get out there and say it.

Interesting from Maccam - Gil and co remain positive and am fairly sure Ian Cloke does also. Tullow need to message better but Eco can incorporate some of that for them tomorrow.
Looking at Exxons announcements over the drills, they clearly state Hammerhead is from a different reservoir - all the other announcements are standard "High quality oil bearing sandstone." It says this for Hammerhead too but clearly states the new reservoir element.
Looking also at the maps, much of Longtail, Turbot and other finds South of Liza look as close to the shore as much of our block does.
Hence, likelihood of Hammerhead being heavy but commercial and reading across to Jethro seems high to me.
1bn barrel drill x2 will make 3bn barrels on the licence and heavy or not that is alot of oil.

Phoebus
Dont think anything has jumped the queue over Hammerhead, based on darling conducted believe it was always envisaged to be the 4th or 5th FPSO on the block.
Think your May drilling date is bang on.
Believe they may drill Rappu also with a Jack up but only 2 with the big boys kit.

If 10% of Hammerhead is on our block and we have 15% then that is 15m barrels of commercial oil currently being developed for production. At $8 a barrel (yes Noix I know and prefer $4 or 5 for drilled and $1.00-1.50 undrilled) that is about the current market cap of Eco.
So in terms if being oversold, I think that is a fair assumption if one can say the market cap is covered by Hammerhead alone.

Noix
Nothing personal, just the first part more in response to your posts. Good debate is important, confirmation bias based definitely stopped me booking more profit on this and left me holding more.
The sulphur content becomes quite important now but with hydrogen desulfurisation (or something similar) this can be overcome but I dont know and haven't seen if there is a percentage content where this becomes untenable.
Tullow are maybe my biggest concern right now, they're fighting fires on too many fronts and dont know which way to turn. I note they have assigned the Stena Forth to Karoon energy for a March drill in Peru and expect the ship to be back in Guyana after that. So 6 weeks from early March plus a week or so sail time and another week or so for set up.
Given they are assigning the rig, I'm surprised it is not being put to use earlier.
I think Gil sees a huge opportunity and is frustrated it is.not being grasped by the market how he sees it. He isnt necessarily a tamper or pumper and dumper (I'm sure that is similar to a Sat night rugby phrase) but comms now are important and need to be clear. Another area where Tullow are suffering.
Perhaps it is buying time until the Carapa result. CoS 15% is similar to the 20% Tullow assigned to Jethro about half the CPR CoS. The big question is likely seal and trap.
Anyway, enough from me enjoy your Sunday.

Noix (and others)
1. Heavy Oil is not in itself uncommercial, it may be liss profitable yes but perhaps a hit of 25% to base case for medium/light.
2. The Hess CEO may have a false narrative on oil being heavier the closer to shore, their heavy oil is Hammerhead their only Tertiary drill to date. Jethro is by all accounts a replication of this field and they have made clear Hammerhead is commercial th e read across that was there to Jethro before remains that it likely is too.
3. Jimmy is very similar to Joe which sit above Rappu. That is likely a joint accumulation of 750m barrels and Rappunis likely lighter oil in the Cretaceous. One of the ways to blend heavy oil is to mix it with lighter and we have our own supply in the field.
4. There are a further 3bn barrels plus of Cretaceous likely lighter oil to chase but the company is confident of finding close to 1bn barrels of oil through Jethro, Channel, Joe and Jimmy along with Hammerhead. To suggest that is worth only 80c a barrel to Eco as the current MCAP does seems fanciful even if one disregards the rest of the field.
5. Tullow have materially harmed Ecos prospects with a vague statement and further clarification is needed which Gil (and likely colin along with maybe Keith Hill) will.likely try to give markets this week.
6. Tullow SP has been hammered and they're quickest win isn't the portfolio is to prove up 2bn barrels in the Cretaceous and test Jethro and its channel by end H1 next year and then farm down the licence to solve its debt issue and get a free carry.
7. This is also Ecos best hope as 3 to 4 drills and then a pause would allow either a fundraise or a sale and likely is a sale to Exxon or Total in my mind who see overlapping blocks with possibly 15bn barrels of oil to extract and the balance sheet to do it.
8. Again to use Maynard Keynes, when this will happen I dont know as the market can remain irrational longer than an individual can remain solvent.

Noix
Agree it is important to be careful in comms, he admits to being optimistic and would like to see the exploration moving more quickly than currently.
Success in those drills would be significant.