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I have to say the rns form is hard reading, but I think it’s saying that a cfd for 3.23 of the issued share capital has been closed and cash settled, which may well explain the long drop in share price. Do others read it the same way?
Jimmy
The last page of the corporate presentation provides an update on mou 2 well results.
In particular it shows the horizons from which theee gas samples were recovered.
That’s really important because it’s the first conclusive evidence that gas is present and that the quality of the gas is suitable for cng.
Inset on the presentation page is a log which shows the shallow horizon from which one gas sample was recovered from a reservoir of approx 4 meters. While the clarity of the log is not great , I compared it to the strip log previously published for mou2 and I believe it is at a horizon of 630 meters.
Which is interesting because the shallow gas horizon in mou 1 was reported at 605 meters and had a p50 resource of 28 bcf based on a prospect area of only 6.5 km2 , and thickness of 10 meters.
This would seem to indicate that these shallow reservoirs in each well are in communication, and would appear to justify an increase contingent resources. Probably circa 100bcf is my guess.
In addition, the recovery of gas from reservoirs allows the wireline logs to be calibrated to reflect the known gas samples and in turn allows the seismic to be used to be recalibrated to wire line logs to map its lateral extent.
That final page in the presentation was not included pg presentation to proactive as he ran out of time, I wonder what he would have said.
Jimmy
So page 22 of the presentation reports that gas samples recovered in the shallow zone at mou 2.
A cross check to the mud logs shows this occurred at 630 meters, so not the new A sand, bit perhaps the Ma sand. Other views welcome, most likely not included in proven resource yet.
Jimmy
Ant.
It’s true that the onshore potential is more than the 1tcf I suggested.
However, we need to prove up thicker sands such as the 300 meters found in lnb 1.
The flow rates expected by chariot are very conservative also.
Jimmy
Paul gave a good presentation, we just need to validate the data to date by way of flow rates.
There is potential for a lot of gas and being onshore in a country that imports gas it’s a good place to be.
From a geological perspective the big advantage this geology has is that there are great sealing rocks to keep a lot of the gas in place after it’s trapped, particularly important in a basin that’s undergone two periods of inversion which can cause gas to escape and potentially breach the top seals.
The presentation also notes that in the main guercif reservoirs the middle reservoirs are in a stratigraphic trap and the deeper reservoirs are in a structural trap.
Because there is no 3D seismic we cannot assume there are stratigraphic traps elswhere in the licence.
For these reasons, the 7tcf of gas generated from the bio genie source rocks will not all be trapped in reservoirs and even then circa 60% will be recovered in production.
So a rough estimate of the potential for biogenic gas , subject to lots of drilling , is 7000 bcf x 60%x 60% = 2.5 tcf
Still a lot of gas potential.
Jimmy
Hi Matt, agd.
Many thanks. Looking forward to the much anticipated sand jet flow testing.
I am invested in predator and chariot, not conflicts of interest, just looking to make money in both. I constantly recheck information as you indicated.
Jimmy
I am delighted there is a strategic review underway for the renewables.
Investors will note that despite chariot having several renewable projects in its portfolio which are in operation, chariot does not report any revenue from such source, that’s because the investments are in joint venture companies where majority control lies with total Erin. Hence the profits are not recognised till dividends are paid from the jv company and that will not occur till project debt for such projects is repaid. So although these are good projects, they have a long payback.
That compares with the very short payback from onshore morroco in the loukos licence where payback is likely to be around one year per production well, so better returns for shareholders.
Jimmy
With regard to the potential of the biogenic gas, do the calculation of gas generated from source rock, take account that a lot of gas has indeed filled the reservoirs but also that gas has seeped away, as evidenced from the gas cloud in the seismic to the east of mou 2.
There is definitely potential, but none of the experts reports, even in the most optimistic scenario of p10 outcomes come anywhere near 7 tcf.
Because there is no 3D seismic the area will require a lot drilling to prove up the higher gas volumes that are the subject of speculation on this board. So it’s very important to get into production cashflow asap and use the profits to drill out the area to prove up the higher gas volumes. I see that as a better use of funds than a new exploration project in west Africa.
The carbonate platform project is very interesting
I don’t understand why the p10 volumes of 637 bcf are based on 50 meters of reservoir when the carbonate section prognoised is 247 meters of which the bottom interesected 2 meters of which were high porosity and high gas saturation in mou 4 well, why is it not 247 meters of such high porosity carbonates?
In addition, the last experts report assigned a 12% chance of success to the carbonates, even though gas was proven down dipin mou 4 . I think I must be missing something.
Jimmy
Hi fernan.
Just to clarify the deeper sand situation at loukos.
Chariot used re processed seismic and Avo analysis and spectral decomposition of seismic to identify a large increase in anchois resources up dip from anchois 1 well, which was confirmed by the drill results of anchois 2.
The same approach is being used to drill onshore up dip from proven gas at lnb 1 to drill the next two onshore wells. In addition, the deeper 300 meter reservoir which was found in lnb 1 well has now been identified from reprocessed seismic as being up dip also and will be evaluated by the drilling of the next 2 wells.
The reprocessed seismic on page 6 of the webinar presentation shows the lateral extent of such deeper reservoir on the reprocessed seismic.
We know from the webinar that the shallow sands onshore are equivalent to the B sand offshore at anchois, and we know there is top seal and proven gas water contact in lnb 1 well, so gas is definitely going to be found up dip.
Jimmy
The deeper 300 meter sands found in lnb1 onshore the Loukas licence had poor seismic characteristics for mapping its lateral extent, hence the very small prospective resources attributed to it.
Chariot have now mapped these deeper sand below the main reservoirs in both the darfoir and Dartois prospects.
Please see page 6 of the recent exploration webinar and note the seismic signature of the deeper navette sands before and after seismic reprocessing.
That reprocessing has confirmed the lateral extent of such deeper thick sands, which is why I proposed a back of the envelope estimate for its potential. Obviously to be confirmed by drilling results.
Jimmy