Why do I say all results will be issued together at the end of the programme?
* It is standard industry practice.
* They will be testing several horizons a day, perhaps 50+ in total. Did you want an RNS for each horizon, or just one a day?
* A single result is unlikely to indicate the commercial potential.
* Multiple results across different boreholes will be needed to calculate volumetrics
* All the data will need to be consolidated and interpreted in order to give the full picture - anything less could mislead the market.
* ONHYM will want to review everything and agree the announcement wording.
...and finally, although this seems to invite derision from some quarters, Paul is very deliberately attempting to release all data relating to commerciality (including MOU-5 results) as close together as possible. Unwelcome takeover approaches are very much a reality - I see that during my nighttime the possible takeout of CHAR has progressed from rumour to public discussion - see the CHAR lse board for details.
@Ibiza. The existing boreholes are used, no new drilling required unless formation damage is so great as to render the existing bore unusable (very unlikely). The procedure is:
1. If necessary, clean any debris from the bore using the Coiled Tubing Unit - highly unlikely to be a problem since the holes are already protected by casing.
2. Run a wireline log to confirm the depths of previously identified horizons of interest.
3. Lower the Sandjet unit to the required depths and perforate. Not looking for weak points, just the correct horizon.
4. Perform gas pressure tests and flow tests.
5. Individual results should be known immediately, but will most probably all be released together at the conclusion of the whole testing programme. I would guess late May - early June.
@BRV - I didn't want to mention that the potential gross revenues from MOU-5 could be 1250 x the current market capitalisation, people could get upset. Of course, the NPV is a lot less, I guess only a couple of hundred times the current market cap.
My understanding is that:
* SandJet perforation and flow testing of MOU-1, MOU-3 and MOU-4 will start early May. It is fully funded from available cash.
* Drilling of MOU-5 is scheduled to start mid-May, after CHAR's two shallow wells have been finished. This is also fully funded from available cash.
For reasons that have been discussed over the last two days, it would seem that Paul is arranging the timing of operations very well in order to ensure the minimum gap between testing all the wells together, including MOU-5. I see this as very positive, not the failure that some have suggested.
The only possibility for dilution that I can see is that cash may need to be found for SandJetting and flow testing of MOU-5, which would be able to be done with the same equipment and crew moving on directly from MOU-1/3/4 to -5. However, this is a relatively small amount of money, and can likely be found from elsewhere - in particular, Cory Moruga looks to be running behind schedule, so cash can temporarily be diverted from there. I am sure you agree that post-testing positive results will mean an end to the need for further dilution at current low share prices.
I do not wish to get involved in inter-company politics that may or may not exist, and have no problems with folks voicing their concerns. In this instance, I do not think the concerns are anything to be worried about.
For those wringing their hands at the thought of spending money on a prospect with 12% chance of success, may I refer you to p.44 of the ITR of 24th January 2024:
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2024/01/Guercif_-ITR_20240124.pdf
Top half explains the methodology, table at bottom gives the percentage chances of success for different aspects of the system. Note that for many of the existing holes most of the different issues examined are given a 100%, or close to 100% c.o.s. The Jurassic carbonate has question marks remaining over the reservoir effectiveness and gas migration, which when multiplied together bring the c.o.s. down a lot. Imho., these c.o.s. figures are already on the conservative side, particularly reservoir effectiveness for what is likely to be both a fractured and weathered reef.
Just under two months after the ITR was published, additional source rock data was presented at the Proactive meeting:
https://www.youtube.com/watch?v=agdQLQtn6ac at 20m.50s (slide 14).
Paul states that there is source rock directly below the carbonate trap, which should boost the migration score very substantially, and is likely to be in the condensate window.
My conclusion is that the current c.o.s. is likely to be very much higher than the 12% stated in the ITR.
So: would you take the risk and go ahead and drill a shallow borehole (1140m, 12 days, $3.5M) into a 177km² structure with a potential reservoir 250m thick likely to contain gas and condensate worth perhaps $14Bn?
Or say, nah, let's leave it for someone else?
I am very curious as to why some posters here seem to want us to choose the latter option.
3D seismic could cost anywhere between $10K - $100k per km² depending on resolution required, compared to perhaps $5k per km for 2D. 3D is of great importance for getting a $150M offshore well in exactly the right place, much less so when your onshore wells are less than $3m a pop. Paul & Lonny seem to have done pretty well so far using 2D, and I would expect them to continue not to bother with the time and expense of 3D for the shallow biogenic gas - these fields are likely to be of vast areal extent, and cheap, fast & easy to drill. There may be good reasons for using 3D for the Jurassic carbonates, where the reservoir structure is likely to be more complex, and this is one of the reasons that Paul has stated that he would leave the development to an outfit with deeper pockets and more employees.
It has always been the case that 2 or preferably 3 or more producing wells would be required for ensuring continuity of supply for CNG, and this is what there will be. For G2P, of course there will also need to be continuity of supply, and for greater gas offtake you will require greater gas flow, therefore more wells. Paul has made it quite clear that G2P is a project for another company.
All this is pretty obvious. I'm not sure why this topic is now being raised as a negative for PRD - it is simply not relevant to currently planned operations.
And...
"We are confident that potential gas flow rates using Sandjet will fulfil the potential 50 million cubic feet of gas per day profile facilitated by the Collaboration Agreement with Afriquia Gaz."
From Guercif local press (Government spokesman Mustafa Baitas) "Gas cylinder prices are increasing in Morocco at the moment. Paitas clarified, during a press conference following the Council of Ministers, that the increase expected at the beginning of April has been postponed until the public opinion is informed of the decision of its implementation later.
@thebold. References for depth please? - CHA have clearly stated that the deeper reservoir is the same as the discovery in LNB-1, and updip means shallower. LNB-1 did not TD early, otherwise they would not have encountered that potential reservoir formation. References for 26 days per drill please? Are they taking a fortnight's holiday on the middle of each just to upset PRD?
Everyone is entitled to an opinion, but in order for others to assess such an opinion, it is necessary to have the facts on which that is based. An opinion based on further opinions is not very helpful.
I posted on this subject yesterday, but it appears that someone has posted a whole load of nonsense on the same thread, thus ensuring it is deleted. This is a common troll tactic. So, since there is still debate on who has what drill when, here is my slightly more detailed understanding of what is going on in Morocco.
🦖 SDX are currently using the ONHYM drill.
🦖 CHAR will begin using the SV-101 on the Gaufrette, then the Dartois/Navette prospects. See tweet:
https://twitter.com/Chariot_Energy/status/1775407393771270632
These wells are not as deep as some here would like to claim - Gaufrette is updip from LNB-1 which was drilled by SDX to TD of 1861m - from the seismic, I would estimate the two CHAR wells to be around 1600 - 1700m, so would take maximum 15 days each, maybe less since this is known stratigraphy. see: https://www.euro-petrole.com/sdx-energy-inc-gas-discovery-at-lnb-1-well-morocco-n-i-16632
🦖 Next, SOU are completing their TE-6 & TE-7 wells for production. This is involves putting production casing into existing boreholes - see from 4.00 in this presentation :
https://www.investormeetcompany.com/meetings/investor-presentation-549
🦖 Then it is Predator's turn. MOU-5 is a shallow well, taking probably 8 days.
I don't know when CHAR will spud, but they seem to expect the rig imminently. From spud, allow 15 days for each well, 1 day to move between them. Then 3 days to move to Tendrara, max 5 days for workover of each well. 3 days to move to Guercif, 8 days to drill. That makes a generous 47 days maximum to MOU-5 spud. Please feel free to question these figures, but unless you state why you disagree, it will be a meaningless exercise.
A bit more T & T detail. I strongly suggest a re-read of the 11th Jan 2024 ITR.
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2024/01/Cory-Moruga_ITR_20230111-final-11.01.24-13.11-hours.pdf
Section 6, p.31 "Indicative Work programme" gives comprehensive details of the possible workovers / re-drills, and there is a map showing the location of the historic wells Figure 2, p.10. It is these locations that Lonny was re-assessing in March.
Most of these wells have never been properly tested, PRD are planning to clear out the bores, evaluate with NuTech logging, then SandJet interesting horizons. I am particularly interested to see what is in Rochard-1 and nearby wells - these should access extensions of the same EIGHT stacked reservoirs that have in the past been very productive for BP/Shell in the adjoining Moruga West Licence.
@Bridgedoggy. Lonny has just returned from T & T. He has apparently located a number of previous well locations, and will presumably soon let us know the proposed running order. My guess is that Snowcap-1 will be first, since that has the most data available and has previously flowed oil. There should not be the same sort of delays that we have experienced in Morocco - there is plenty of equipment available in-country.
Back in the real world....
FT article today (behind expensive paywall of course)
https://www.ft.com/content/1f93b9b2-b264-44e2-87cc-83c04d8f1e2b
pointing out that AI data centres will need a lot more energy than ordinary data centres, and that will need to come from gas. "A surge in demand for electricity to feed data centres and to power an artificial intelligence revolution will usher in a golden era for natural gas" and “Gas is the only cost-efficient energy generation capable of providing the type of 24/7 reliable power required by the big technology companies to power the AI boom".
All we need now is a new large supply of gas in a low-tax, politically stable jurisdiction, with existing infrastructure connected to markets currently paying a premium price.
As always, Q2 begins 1st April. Now it's past midday, I can confirm this was just a bit of fun on a day when the markets are closed. Actually, everything was scientifically accurate, other than there being 9-Carbon at Guercif. 9-Carbon does exist, and does degrade to Helium, but does not occur naturally, only in nuclear reactors, and has a radioactive half-life of only 125 milliseconds .
Q2 starts today, and we can look forward to a lot of interesting news over the next three months. We do have some new information, but I am unsure if this is positive or negative, and welcome your observations.
You may recall I have talked a little about biogenic vs thermogenic gas. Of course most will know all this, but a brief reminder for those of us that left school rather a long time ago. Natural gas is methane, chemical composition CH4. Bacterial action on organic material contained within sediment produces biogenic gas, in a shallow, low-temperature environment. Thermogenic gas is derived from oil subjected to high temperatures and pressures deeper within the earth. You can tell the difference by measuring the ratio of two different isotopes of the carbon that is a constituent of the methane – a higher ratio of 13-C to 12-C indicates biogenic gas, while low 13-C to 12-C indicates thermogenic gas.
Some of the Guercif gas analysis seemed a little odd, and the data have been re-examined. It would appear that as well as the usual suspects 13-C & 12-C, there is an anomalous amount of the carbon isotope 9-C. I can only speculate that this is something to do with the very unusual conditions when the organic matter was incorporated into the sediments, immediately preceding the Messinian Salinity Crisis.
I admit I had to look up 9C (try Googling “Carbon-9 isotope”), it does seem to be rather odd. Unusually, it is unstable, emitting electrons, protons and neutrons as it decays. This could be of concern, since burning it would produce a cloud of radioactive CO2, which could turn our Green friends purple. However, a closer look at the radio-decay pathway throws up something very interesting.
There are three possible decay pathways for 9-Carbon – 1. A ß-particle is emitted, giving rise to 9-Boron, this in turn decays to 8-Beryllium, then to 2x 4-Helium. 2. Both alpha & betas are emitted, giving rise to 5-Lithium, which in turn quickly decays to 4-Helium & 1-Hydrogen. 3. A beta and a proton are emitted, giving 8-Beryllium, which in turn rapidly decays to 2x 4-Helium, plus 1-Hydrogen.
So we may have radioactive methane, but this could be balanced by also having a source of Hydrogen and valuable Helium. I will know more when people in Europe are awake, and will post again later today.
My suggestions for succession planning highlight an interesting point. The people mentioned (plus many others I know of) are all readily identifiable public figures, have large shareholdings in PRD, and have lifetimes of relevant experience including working at director level in large (and very large) companies.
On the other hand, there is the little group of friends who appear at the same time to bolster each other's negative views. They are of course anonymous, never present any real knowledge of the industry or management experience, and are presumably not shareholders - indeed one even claims to be both a long-term shareholder and to have recently started buying.
Who should I believe? Such a difficult choice.