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Dai2 - no idea either re why they are using 4.2% or 4.9%.
Only thing that comes to mind is if you look on p102 of the CPR, table 6.3 there are some slight anomalies between the He bcf (He only) and recoverable bcf (ie He + N2). If you divide He by recoverable, you get quite different values around 4% of He - some down to 3.8% some as high as 4.7% for different prospects. ( I have not calculated them all, but those I did were all different). I have no idea how they calculate the He % of a prospect when they have not sample it directly, unless they take surface samples above the prospect and infer that that is that prospects % of He.
It may be that at P10 they are banking on getting more from a particular prospect which might have a higher % of He. Not sure. Maybe Siesmic Interpreter could help??? (I think that is his handle).
Hi to Mr ST, Dai2, Trek, Seagull, PJ, Seis, Skittish and deep blue.
Followed your informative posts for over 6m - been most helpful in guiding my view on He1. Excitement ahead of Monday/next week RNS palpable. Whatever next week holds, below I believe is a list of what we know and what we still hope for - and a repetition of a guess (made by one of you which could be spot on) as to why DM has gone to Tanz (over and above to make an announcement) - corrections from minds greater than mine appreciated.
DMs biggest fear/risk to the project
- Trap/Seal might not work - Show at 70m proved Trap/Seal/Migration and was a massive derisk of the whole project - hence his excitement
Logistics
- If we strike big, unlike O+G projects, CAPEX would be a mere $50m for the 12 iso-container production plant and $20-30m for further infrastructure, with simple trucking to port (no costly pipeline to be laid) - likely paid off in under 12m from production - unparalleled in O+G world for the kinds of returns we are looking at
Metrics
P50 @4.2% He = $50Bn, @8.4% = $100Bn - (8-10% arguably a more likely in the ground % - DM May presentation)
P10 gives $200Bn and $400Bn respectively.
DMs mindset - speed and saving money
DM has pushed this project on with phenomenal speed - from floatation to possible announcement next week of discovery, is the fastest I have ever seen in a comparable O+G space. He has also done it cheaply - (initial offering and then a single cash raise - only so he could drill 3 EW + 1AW back to back. )
Dash to Tanzania - announced on Twitter - what is he hinting at?
We all hope it means he has struck big and will announce this next week. If so he needs to be there to announce it with possibly a photo with the Prime Minister - dont forget, this is huge for Tanz and it would be a huge PR blunder if as head of He1 he was not there in the eyes of the Tanzanians. Aside from PR, he also needs to be there to decide what to do next. DM has shown us he wants speed, I guess (given he has a rig that will do EW and AW) he will go straight to appraise Tai - Why move the rig and why risk a duster - appraise your success - you know the size of the field 2km*5km, if you have the meters of pay + most importantly % of He + porosity and flow rates from an AW, sp will rocket, fund managers will take a stake - (they have to as MCAP will be north of $500m), sp will rocket further, THEN do raise for Pn facility, finally do 2 further EW with production a certainty and the other 2 EW just icing on the cake to increase your reserves.
Value others views,
Just my opinion
KN
I am with you re strategy as we go through the drills - it is not easy and we will all differ as to how we play it.
My probabilities were for 1 drill - ie trying to pierce 4 traps with a single hole, not 4 sequential wells. On top of that we then have 3 more wells which I did not go into. Clearly the first well will alter probabilities of the remainder as info on migration, trap permeability etc will then be known to some extent which will change future COS calcs
Evening Mick, Trek, SpaceT.
Thanks for all the work on COS.
All we need in the first instance is ONE target to be a strike, given that the lowest P50 in the previous target was 19bcf and each 10 bcf =1TCF in gas terms, any strike will be commercial.
Prior to the switch to Tai, we were given details of the 4 targets on the first well we were going to drill, 1+1a, 2, 2a, 3+4. See below for the multiple ways of achieving 1 or more strikes. I read somewhere the COS for any single layer was 10-14% (so take it as 12%). If so, the overall COS of 1 or more strikes in a 4 stack play is 39% (see tables below for all the combinations which are multiplied to give the total fifth column and then add the right hand 5th columns to get a total COS.)
TRG 2a 3+4 2 1+1a
Hit 0.12 0.12 0.12 0.12
Miss 0.88 0.88 0.88 0.88
1 Hit 0.12 0.88 0.88 0.88 0.082
0.88 0.12 0.88 0.88 0.082
0.88 0.88 0.12 0.88 0.082
0.88 0.88 0.88 0.12 0.082
2 Hits 0.12 0.12 0.88 0.88 0.011
0.12 0.88 0.12 0.88 0.011
0.12 0.88 0.88 0.12 0.011
0.88 0.12 0.12 0.88 0.011
0.88 0.12 0.12 0.12 0.002
0.88 0.88 0.12 0.12 0.011
3 Hits 0.12 0.12 0.12 0.88 0.002
0.12 0.12 0.88 0.12 0.002
0.88 0.12 0.12 0.12 0.002
0.12 0.88 0.12 0.12 0.002
4 Hits 0.12 0.12 0.12 0.12 0.0003
Total COS = 0.39 = 39%
Does anyone know how many layers/targets there are in Tai?
Does anyone know what COS each Tai layer/target has?
When we have that info we can make an overall 1 strike or more COS calculation for Tai. Happy to do the maths if someone can find the number of targets and COS for each. Given DM is clearly much more excited about Tai than the previous choice of well, I wonder if COS per target layer is greater???? or are the volumes bigger???
Would be great to have some answers from you guys if you have them, and then we can all have some real figures to use for our own individual investment strategies.
Greetings to all, especially GRH and the Wackmeister whose posts I have enjoyed. I feel the exceptional nature of this share, at this point in time, is worth reminding ourselves of.
Morocco
Who else has got a 4 stacked play with a COS of (1 or more strikes out of 4) of 90.5% in the best gas post code in the world????
If you take out the chance (16.1%) of the worse single strike happening on its own i.e. hitting just 1+1a at P90 of 19bcf (which may not be commercial) we still have a COS of a commercial gas find of 90.5% - 16.1% = 74.4%. Who has ever backed a field opening well with that kind of COS????
Gas Price - $11/mcf
Taxation – none for first10 years I believe
PG has outlined I think 4 ways of making this commercial, very very easily:-
1. Put in into the nearby pipeline which is linked to Europe
2. Build a gas power station as the well lies on the national grid
3. Truck it to power hungry Morocco industry as LNG
4. Send it to Ireland, non fracked and guess who has plans for a regasification terminal to feed a country where the lights might go out next winter. This kind of joined up thinking is the province of a Major not a Minnow.
T+T
Arguably the best CO2 EOR project in the world – 99% pure CO2, 40km from wells already drilled. Most other projects have impure CO2, hundreds of miles from well heads which makes it cost prohibative/marginal at best
Successful pilot
Simply needs up scaling and selling
Carbon Credits could add further value when it comes to sell.
Ireland
PG probably the man with the greatest chance of getting a gas project done in Ireland.
Political headwinds seem to have turned in our favour.
Again – if PG lands this fish, it would be worth many multiples of the current SP
Company itself
Management have huge skin in the game
3 serious projects - not just a 1 trick pony – stunning for such a small MCAP
Possibly the AIM O+G minnow with the most green credentials – something becoming increasingly important. As our MCAP grows and we get to a size that institutions might look at, that becomes even more important, as many funds are actively seeking greener companies. If they start using their buying power, the sp would rocket.
Seems to have a very small but effective team – low operating costs with high output of progress. So many companies we back have large boards and do little except come to us for money!
Beware
At any time all our plans could fail due to a market crash and sentiment turning negative, producing conditions where the best companies sp is trashed.
Summary:-
I think GRH you have said a number of times how special this company is.
Since you saying that, all 3 projects have got better/closer to spud/comerciality.
My experience goes back only 15 years, but I have never seen anything like this as a whole package in a Minnow O+G AIM company before.
Good luck to all and correction of any errors in the above much appreciated. It is my own opinion and done as a aide memoir fo