Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Kingbilly,
Actually, I am excited about chariots drilling in loukos as I believe it will rapidly lead to production cashflow and negate the equity dilution discount that the market applies to chariots valuation.
There is a reasonable chance that the deeper Navette reservoir is gas bearing also , that would be transformative, but its exploration risk. We will know soon enough.
Jimmy
Prd previously prioritised flow testing of mou fan in mou 1 and 3 which would then facilitate a production concession licence. They also suggested testing of the very shallow unlogged reservoir in mou 3.
Interestingly, the last announced flow testing did not include the 50 meters of shallow reservoir in mou 4, yet it’s recently referenced as gas bearing, so who knows if it will be tested.
With regard to the mou 4 Jurassic 2 meters of likely gas, I would flow test it, because if it did not flow I would not drill mou 5 updip.
Jimmy
I have re read the mou 4 rns
“ As previously announced the culmination of the Jurassic carbonate target lies 2.6 kilometres to the southeast of the MOU-4 well location and significantly higher than at the MOU-4 well location. Therefore a positive rigless testing result in this zone would help to de-risk the larger Jurassic structural closure in respect of reservoir development and migration of gas. These were two of the most significant pre-drill exploration risks.”
A flow test would validate the gas, which nuetech reported as likely, not certain, and would hopefully establish the gas water contact. Possibility of a gas condensate contact which would be interesting.
Jimmy
The mou 4 rns stated.
“ As previously announced the culmination of the Jurassic carbonate target lies 2.6 kilometres to the southeast of the MOU-4 well location and significantly higher than at the MOU-4 well location. Therefore a positive rigless testing result in this zone would help to de-risk the larger Jurassic structural closure in respect of reservoir development and migration of gas. These were two of the most significant pre-drill exploration risks.”
A flow test would validate the gas presence. If not present save the cost of drilling mou 5.
In addition, a flow test may establish either a gas water contact or a more unlikely gas condensate contact.
Jimmy
Thanks Keith.
Hopefully a good flow test will result in a re rating of the share price.
I hope a long flow test occurs sufficient to prove gas below the structural spill point and hence help to proove a stratigraphic trap closure.
Jimmy
Keith .
Thank you for your summary and views,
We know that mou 4 encountered 2 meters of good carbonate reservoir with very high gas saturations, and that in the shallow zone 50 meters of reservoir was gas bearing , per neutech.
So it seems to me that source rock in the area has been proven and is not the factor behind the it’s gcos of 12% for mou 5.
You stated.” As an aside, these recent source-rock studies greatly increase the gcos over that suggested in the January ITR“
Can you please explain your point further.
Jimmy
Ijt.
The average success rate in the rharb basin is circa 80% for prospects that Avo seismic signatures, which is one reason why I invested in predator as it also has Avo seismic signature.
It will be interesting to see whether chariot or predator achieve an onshore gas flow test first.
Predator report potential gas reservoirs of over 175 meters, which need validation by flow testing, then I am expecting the market to substantially re rate predator.
Chariot onshore primary targets are two wells with a reservoir thickness of 10.5 meters each, so a lot less production potential. Both companies need to flow test.
Jimmy
Clearly chariot could use the rig to perform a flow test but it’s at a much higher day rate, previous operators have flow tested after the rig has moved off location, got to wait and find out.
I believe there will be two wells drilled by chariot sequentially.
Note the large deep structure in the second well called Navette, which is suspect may be similar to the O sand offshore.
Jimmy
I guess it will take 2 or 3 weeks to encounter the first target.
Drilling the deeper target may take another week if they have to change the mud system to avoid drilling problems encountered in the deeper reservoir at lnb 1 nearby.
I expect flow testing will occur after the rig has moved off location, using a coiled tubing system. I expect that will be within 1 or two months thereafter. Just a guess though.
Jimmy
I am not the Bold, and have never met the person .
I am simply looking for pg to do what he said he would do in a timely manner .
I hold both predator and chariot and my last top in predator was after mou 4 , which is now in a loss situation , due to delays and deep discount equity dilution.
My view is that generating cashflow quickly is the route to shareholder value, unfortunately the market discounts potential assets such as mou 5 heavily, hence my view that it should take second priority to production testing by sand jet.
I see no evidence of other companies looking to takeover predator at this time and the best defence to any takeover is for management to do what they say they will do in a timely manner .
Hopefully predator will announce the mobilisation of sand jet equipment shortly and we can look forward to a higher share price based on strong production volumes.
Jimmmy
I will be delighted if sandjet perforation starts in three weeks as Keith suggested and the only basis for my estimate of a couple of months is past performance on meeting timelines.
Not doing the company down, just trying to be realistic.
Jimmy
Porters.
You will note that the rns did not state the date of the licence extension . So I am assuming it’s longer than the 5th June.
Pg has previously commented on the frugality of operations, so my guess is money is only now to be spent to mobilise and jet and coiled tubing.
J
Keith.
I believe Sou had a major tax disagreement with Morocco which has only recently been resolved and now they get their licence updated.
When lonny worked for SDX in Morocco, they were abele to flow test numerous wells within a couple of months of completing such wells. It’s nearly three years since mou 1 found gas and still no sand jet flow testing , hence my frustration at such delays, as I invested on the basis of promised sand jet perforation and early cng production which I am patiently waiting on.
Jimmy
IJT
The rns stated the timinung of sand jet was as follows.
“ Mobilisation of the Sandjet crew and equipment will occur shortly after Petroleum Agreement Amendment #4 has been ratified and all necessary regulatory approvals for Sandjet rigless testing have been received. The time framework for the Phase 2 rigless testing programme will at that time be updated.”
The licence amendment no 4 was submitted on 23rd January 2024.
If the relationship with onhym was as good as many investors think then the licence amendment should have been completed by now. Unfortunately, prd seems to have a poor history of getting timely regulatory approvals in Morocco.
Jimmy
Ford,
I expect anchois to be in production in about 2.5 years, which I expect will be fully financed by energean
So far with predator it takes nearly three years to perform a flow test since mou 1 and even then i expect a successful flow test will be followed by a period of 12 to 18 months to get a production concession from the government.
It’s now more than three months since the application to extend stage 1 of the licence, it should have been awarded by now, I hope there is not a problem
Jimmy