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Predator announced that testing would begin of mou 3 on or before 16th oct.
Predator stated 43 meters of the mou fan reservoir had been identified by nuetech for flow testing. At an average flow rate for such geology in the adjoining rharb basin of 1.1 mmcf per meter per day results in a flow rate of 47 mmcf per day.
The current price of cng in Morocco is approx $12 mcf of gas. Predator have started negotiations to sell such gas at the well head instead of to end users location by cng. Predator previously advised the cng capex costs for 50 mmcf per day would be approx $100 million, but by selling at the well head predator save the financing and equity dilution of funding such capex in exchange for a lower gas price. I am guessing such a price is $8 mcf , in which case predator would earn $270,000 per day net of royalties, assuming it can sell 47 mmcf per day.
The capex saving then frees up £3.9 million which can be used to drill and test the crabornate reef appraisal well and the shallow mou 3 reservoir by mou3 A well.
A lot to look forward to from these forthcoming test results.
Jimmy
Hi surfit,
Predator budgeted $2.5 million to drill its wells and chariot have budgeted $3 million to drill and test per well for four wells, with the balance of it fundraise for corporate pre anchois development costs and working capital.
They are funded till they can get past costs of anchois reimbursed.
Jimmy
Keith,
I think that was a very old estimate pre mou 2.
Now having drilled mou 1 ,3 and 4 we have circa 150 meters of gas sands to test.
Very good chance of meeting the moroccon cng market of 50 mmcf per day with plenty of capacity for export.
Jimmy
B4now
I agree with you that aim market punishes shares when equity dilution is expected, hence the urgency to get to operating cashflow asap.
With regard to Namibia, yes chariot did not find oil, but total and shell have found billions of bbls in the last few years in Namibia. Close but no cigar.
Jimmy
Nigel,
The important thing about the shell deal to provide lng, is that we now know the benchmark price which is the lng price in Spain, as quoted daily plus a conversion premium and a transportation premium for transport by pipeline from Spain to morroco , an estimate of about $1 mcf .
So a market price for 2024 in Morocco at about $15 mcf.
Yes, please.
Jimmy
Wacky,
Thank you for explaining your basis for the 91tcf gas in place.
Obviously I do not have the well data that Pdr have but it seems to me that mou 4 encountered a gas water contact at the bottom of the 2 meters of gas bearing Jurassic carbonates. Pdr reported this zone had an average gas saturation of 56% and a high of 72%, so likely that some of the zone had gas saturations less than 50% so likely to be near a gas water contact , indicating the potential is updip rather than downdip.
The paper you referenced is indeed interesting, particularly when referencing basin inversions and compression. Those events are likely to induce fracture faulting and improve porosity in the Jurassic carbonates, particularly at the top of structures such as updip from mou4.
Jimmy
Hi surfit,
Morocco has signed an agreement with shell to import lng from shell, delivered to Spain and transported by pipeline to Morocco, so the benchmark price looks like it could be against the lng price delivered in Spain, plus a transportation tarrif.
I think the difficulty is rig costs are high and chariot are negotiating a non recourse loan to cover unexpected capex, so this takes a little longer, all speculation on my behalf.
Jimmy
Ianfor,
No, the exploration farm out market is bad, but the development farm out market is good, hence chariot had over 40 companies looking at the data in the data room.
Patiently waiting.
Jimmy
Mou 4 carbonates most likely encountered a gas water contact at the edge of a 125km2 area structure. So highly likely to be gas bearing up dip provided the structure is continuous , which the seismic confirms . The porosity at 19.9 % in reef carbonates occurs because of the reef exposure to air after deposition causes leeching and hence porosity., so highly likely to be high porosity up dip also.
We do not know how much carbonate reservoir was encountered below the gas water contact at mou 4 and this would be important for predator to disclose because such reservoir will be gas bearing up dip also.
As it was not disclosed, I am assuming that porosity below the gas water contact was poor , but there is very good reason to believe it will be good above the gas water contact. Pg announced that a field trip was to occur to examine carbonate reef outcrops at the surface in the region. If these have high porosity then it’s a near certainty that up dip in the structure will have high porosity also.
Anxiously waiting on such results from his recent trip to Morocco.
My rough estimate of potential is 4 or 5 tcf, subject field trip results confirming porosity at outcrop.
Jimmy
Hi Sefton,
Yes Ap put his own money on the line and saved chariot.
The acquisition of the moroccon lixus licence that contains anchois 1 was initially acquired under ceo Larry bottomless, who was subsequently replaced by Ap . The big difference between Namibia and Morocco is the new geo team.
Yes, chariot were an early mover in Namibia, but the big oil was in deeper water, but the concept was correct that Namibia had oil source rocks offshore.
The difference in strategy now, is that there is a strong awareness that it’s urgent to get to cashflow and stop diluting shareholders , particularly as the exploration farm out market effectively died.
In addition, the geo team have unlocked the seismic signatures of gas in morroco in the Miocene gas reservoirs, hence their emphasis on the 80 to 85% success rate.
Jimmy
857 meter thick Jurassic carbonate does not tie in with the 224 meters of Jurassic carbonate previously identified on seismic by predator.
The mou 4 well location is shallower than taf 1x well because it was uplifted by faulting not because it formed a continuous reservoir of 857 meters.
Let’s remember only 2 meters of the Jurassic were reported as gas bearing at the bottom of the reservoir, so it’s all about what is above mou 4 not what is below it.
Still exciting though.
Jimmy
Hi fernan,
The licence was due for renewal and SDX did not have the funds to commit to another drilling programme covering a number of licences in Morocco.
They did find gas, which flowed at relatively small rates.
The key is to find thick reservoirs and that’s where chariots database offshore can be used to calibrate the onshore seismic and log analysis as well as applying the offshore geological model for thick turbidite deposits to onshore.
Jimmy
Yes, I remember mud, just about.
Anyhow, reading the SDX competent persons report identified two issues for onshore Morocco in the rharb basin.
1. Local rock conditions can adversely interact with drilling mud to prevent logging and drilling. This has happened in the lnb 1 well in chariots new acreage and in the predator well mou 2. Predator indicated it was due to traces of natural potassium in certain clays that adversely interacted with drilling mud to form thick low viscosity mud . I believe Duncan has an eye for detail and will sample the lnb1 well cuttings to identify the issue and select the correct mud.
2. The SDX competent persons report noted that formation water samples were not available to calibrate the resistivity logs which identify hydrocarbons, so an assumption was used. Now chariot collected a huge data set offshore including 12 reservoir samples and sidewall cores, so it can recalibrate the onshore logs. In addition, chariot used seismic spectral decomposition very successfully offshore which can now be used onshore, hence the confidence of a 80 to 85% success rate.
As previously posted, the lnb 1 well encountered 300 meters of gross reservoir with seismic amplitude anomalies and flat spot above the drilled well, that group of clustered prospects were reported to have 26 bcf of reserves, however I believe that was based in 10 meters of reservoir, so if 300 gross meters have a net to gross of 60% , expect 180 net meters, which incidentally is close to the 150 meters encountered in an anchois 2. Now look at the seismic profiles in the chariot presentation showing anchois and guefrette side by side, very similar seismic profiles. We know that the average flow rate onshore rharb basin is 1.1 mmcf per day per meter, so for net reservoirs of 150 to 180 meters gives a daily flow rate of 165 to 198 mmcf per day, at a gas price of $10 to $12 mcf, very nice indeed.
The good old boys in Texas would call that a Barn Burner.
Jimmy
My post is a strong positive, sorry for poor English.
I am highlighting an issue whereby logs may show a low gas saturation, typically not economic, but which are in fact gas zone that flow gas,.
I am excited by chariots onshore acreage.
Chariots new onshore Morocco licence contains the lnb 1 well which is reported to have encountered a lower gas reservoir of 300 meters gross sand interval. The logging tool got stuck and the interval was not logged accordingly. Same happened to predator in its mou 2 well.
Chariot have identified the area up dip of lnb 1 well as a primary target for its forthcoming drilling program.
An independent experts report for SDX, page 126 to 131 at
https://www.sdxenergygroup.com/wp-content/uploads/2020/01/SDX-Energy-YE-2018-Reserves-and-Resources-Report_Client-Release_22-March-2019.pdf
Reports that this zone has an 80% chance of success,
We do not know the net to gross ratio of the 300 meters of unlogged reservoir, but offshore at anchois in similar geology its 60%, in which case there is a very good chance of some substantial upside . Particularly, since chariot have used advanced seismic analysis offshore so successfully.
Looking forward to the drilling, hope they use the right mud system to avoid drilling and logging problems.
Jimmy
The predator prospectus in august reported a desk top study that confirmed that onshore gas in the rharb basin with poor log results and 35% gas saturation can flow gas.
This may could also apply to chariots onshore acreage.
Jimmy
Mou 3 encountered 50.5 meters of sand in the mou fan, yet only a 43 meter gross interval is being tested, is the 43 meters all sand or a gross interval.?
If a net sand interval then a flow rate of 47 mmcf per day could be expected based on average flow rates per meter in the similar rharb basin nearby.
The is almost enough to meet the high end volume cng market in morroco.
If the agreement to sell gas at the well head is reached there will be very little capex,just revenue with very little opex.
No sure the market has grasped this.
Jimmy