Member Info for KeithOz

@ITV. Helium is specifically excluded from international sanctions on Russia, as are fertilisers. Even though I am heavily pro-Ukrainian (family reasons as I have stated here before), I understand the reasons for this.

This article was just published in GasWorld, reporting on a talk at the end of November by Phil Kornbluth. Covers the problems affecting the market, and when they are likely to be resolved. Also mentions that electronics use now exceed MRI usage.

http://www.kornbluthheliumconsulting.com/wp-content/uploads/2022/12/GasworldArticle-Jan2023HeliumIssue_copy-1.pdf

Yep, January 20th 2004.

@Zeus - I agree, huge amount of manipulation going on at PANR, does not reflect the long term prospects. I have a modest holding there, will ignore the noise and wait for payday, as Cube is doing.

I wonder if Cube is a gamer? Curious that in Legends of the Multi Universe there is this creature:

"The Gargantuan Leviathan is a leviathan class creature added in the Return of the Ancients mod. It is an apex predator, measuring upwards of 5 kilometers long, and thought to be extinct."

Now, who was talking about a Leviathan?

Unfortunately, not everything in life is straightforward, and that applies particularly to structural geology! @Skittish has provided a lot of interesting aerial photos of Tai, together with observant and intelligent commentary - thank you for all this work. Much of this shows the traces of fault lines at the surface. A reasonable person might assume that a fault is a planar structure, extending vertically underground from where it intersects the Earth's surface, and indeed in many cases that is true. This is where the 'unfortunately' bit comes in.

Lake Rukwa sits in the hollow formed by a continental-size rift valley. This is part of the East African Rift System (EARS), which extends much of the length of Africa. The EARS started some 25M years ago, and is slowly pulling Africa apart. The crust either side of the rift is slumping down into space being created by this movement, creating a whole load of parallel faults. In addition, the Victoria Block, which forms the eastern side of the Rukwa rift, is rotating anticlockwise.

These complex movements have produced a series of flower faults - so called because the fault surfaces resemble the petals of a flower - they are not planar, but curved in three dimensions. This can make it particularly difficult to work out exactly where they go underground. The good news is that they normally occur in groups, and are strongly associated with hydrocarbons, producing a set of nice 3D traps - in Rukwa it is Helium that is being trapped, not methane.

HE1 were working with 2D seismic when Tai was first identified as a drill target, that was probably inadequate to show the complexity of the faults. That was before Lorna Blaisse joined the company. Lorna has said in the presentation that reinterpretation of the seismic data had shown the actual subterranean trace of the fault, and Tai-3 was being positioned accordingly. Lorna has 15 years' experience in petroleum exploration, She worked with Tullow on exploration in the EARS in Uganda, so will have a deep knowledge of this kind of fault pattern. I have a strong suspicion that the poor hole conditions and subsequent drill string breakage at Tai-1 were at least partly due to trying to drill through the sheared material in the fault zone itself.

Assuming we do ever actually get a rig, I am confident that we will now be drilling in the right place. Also, it will now be at the right time, since by the time fingers have been removed from orifices it will no longer be the rainy season.

@ Patch - Here's 54 pages of quiet Sunday reading.

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/01/cpr2022.pdf

I have a couple of hundred other documents, dating back to 1934, if you have some spare time :-) Many are already on Reddit - https://www.reddit.com/r/PredatorOilandGasPRD/

Coxo - It wasn't my intention to be 'negative about KAV'. If I was negative, I would no longer be a shareholder.

With my geologist hat on, I still see this company having extremely prospective ground, and huge potential. With my business development hat on, I am concerned about the strategic direction. I understand that a decision was made internally that the KCB was going to provide a lower risk / higher chance of success, and drilling there should take priority. It has now been realised that some major reassessment of the KCB exploration strategy is needed, and we are unlikely to get the hoped for early discovery of a shallow, economic Cu deposit.

As a result, the market capitalisation has plummeted and is bumping along at a multi-year low. If KAV management believe that B1 is what they suggest, it should be drilled without further delay, and certainly before half the project is given away at low cost. If it's a duster, well we can all pack up and go somewhere else. If it is a quality NiCu sulphide deposit, that conclusively validates the whole KSZ / Noril'sk hypothesis. Big money then becomes available for development - KAV can use the cash injection to develop existing exploration projects up to sale stage, while retaining a stub equity in the KSZ project to ensure we retain exposure to any upside.

There is £3.5M in the bank - plenty to take all the projects up to the next stage before bringing in a development partner. The potential return on investment in drilling B1 and actually providing real 'proof of concept' is enormous.

@Androcles - have a look at pages 6 & 7 of the September 8th 2022 presentation - more detail on economics of different volumes than you would ever want to know!

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/09/Proactive-Presentation-Final-8-September-2022-LATEST.pdf

@Caterham - I agree the diagram is rather short on useful data, but it's all that I have ever seen. I suspect a lot more data is available that PG does not wish to make public - for example, I have only ever seen TWT seismic, they must have depth converted.

I didn't want to be accused of ramping, so didn't mention:

*Ratio of net : gross pay may be higher, as mentioned by @BRV below - I used MOU-1 as a comparator, rather than the Rharb wells.
*Poroperm may be Better at Guercif than in Rharb, as mentioned by @Vegas below.
*The thicker the reservoir, the higher the flow per metre - Rharb has very thin reservoirs - Methodology on Reddit.

Here's the link to the Guercif kitchen map - p.22, top centre, 8th September 2022 presentation:

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/09/Proactive-Presentation-Final-8-September-2022-LATEST.pdf Look at all those additional prospects!

Good morning, Mr Minchin,

Since this was your preferred rig for several months last year, and is in certified tip-top condition, apparently available right now for use in East Africa (not just Kenya - last time I looked Tanzania was in East Africa), can you please inform us very-long-suffering shareholders why the hell you have not already booked it - with a real contract including dates, costs and non-fulfilment penalty clause, not an MOU, LOI or IOU?

Thanks, Keith

(After 2nd coffee of the day plus a croissant). The best indicator of reservoir communication may in fact be identification of the same degree of overpressure in the same stratum in two different boreholes. This could be very interesting!

MOU-1 had gross pay interval of 72m, net pay of 12m. MOU-2 is estimated to have 168m gross, so at the same ratio should be 28m net pay. Methodology (on Reddit) has demonstrated that the average flow per metre of net pay for wells in the Rharb basin (Guercif is a continuation) is 1.36 MMcf/d.

That would give us a flow rate of 16MMcf/d for MOU-1 and 38MMcf/d for MOU-2, If conditions are the same for Guercif as for the western Rharb basin. At $16 per Mcf, that would give gross sales of $864K per day!

But conditions are NOT the same for Guercif and the rest of the Rharb: MOU-1 demonstrated pressures far higher than seen previously in the analogous geology (2700psi !), so flow rates can reasonably be expected to be higher. $1M+ a day, anyone? That would buy the whole company after 7 weeks.

@Dave - reasonable questions, unfortunately not simple answers!
First, mud gas analysis would be very unreliable, especially if you are trying to detect what would probably be very small chemical differences. As Jimmy has said, most of the gas has originated from the same place, so you are left with looking for very minor secondary changes. During drilling it's difficult to tell exactly where it has come from, if gas from different levels has mixed (eg shallow biogenic, deeper thermogenic), or how it has interacted with mud & air. It would be more reliable to use free flow gas from discrete reservoir levels during flow testing, but even this may not provide reliable or useful data.

Reservoir continuity is also rather misunderstood. In an ideal world, you might get one big laterally continuous sheet of reservoir sands. When you look at a cross section of a borehole, this is easy to imagine - but the borehole is really just a visualisation in one dimension. Turbidites in particular are complex - @Caterham7 did an informative post on this about a week ago - you should rely on what he has to say, he has a lifetime of practical experience in this area, I have not :-)

Now imagine the reservoir in two dimensions - it is a bit like a river delta, with not only sheets, but also ribbons and banks of sand (reservoir) interspersed and overlain with mud (seal). If you put in two or more boreholes, you may see the same strata in some, but in others it may be absent. Next three dimensions - lots of these complex deltas stacked on top of each other. Lastly, we bring in the fourth dimension - time. While all this depositioning and repositioning is going on, erosion is also taking place, often removing lateral barriers of mud, or else removing overlying mud layers. These processes can either connect or disconnect reservoirs, both laterally and vertically.

For the MOU-fan, from the seismic data and examining the cores from previous boreholes, it would appear that most of the thickest reservoirs are likely to extend laterally across most of the fan, so should be in communication, but there is no guarantee that everything is connected - there could be an outlier left after erosion, for example. It is also very likely that there may not be communication between the multiple stacked reservoirs that we are hoping to intersect, particularly since we have seen a range of different pressures across the various formations.

Couldn't think up any useful culinary analogues, perhaps a pot of different kinds of pasta - if the lasagne sheets or spaghetti are touching, we have reservoir connection, but not if sauce between them? I'm too old/tired/sober for this.

Also agree JP. There is an old saying "drill your best target last" - this cynical idea is that you string investors along like a donkey with a carrot tied to a stick. It's now fast approaching 'last'.

My interpretation of the overused phrase 'Proof of Concept' is a little different to KAV's. The concept for the KSZ is that intruding magma laden with Ni & Cu has interacted with sulphur in the host rock, giving concentrated deposits of Ni & Cu sulphides, as has happened at Noril'sk, Voisey's Bay, etc. Geophysics has suggested that this concept may be correct, but PROOF can only be by drilling and actually finding economic mineralisation.

If KAV is confident that Noril'sk-style mineralisation is there, it's time to go ahead and drill B1. After another year of refining the targeting, they must know where it is to the nearest centimetre :-) It won't take much of the £3.5M raised, but the potential return is enormous. Why raise that much money if you do not deploy it on your potentially most lucrative project? If a discovery is made, JV partners with deep pockets and ready access to large-scale exploration & drilling will be queueing up. Giving away 50%+ for a song pre-drill is a sign that you do not believe in the project, or consider that the risk of failure is so high, and it will kill the company. JP - why would someone pay as much as $10 - 20M for 50% of one project, when they can buy the whole company for $13.5M? The only logical reason to do a pre-drill deal is to keep the company running for a bit longer without a discovery, with the additional downside of losing half the potential income if you do make one.

Sorry to say it, but that's my opinion - I know certain people who read this BB will be unhappy with me stating this view, but some positive results have to happen very soon to reverse this long slow decline. Wouldn't it look good to have on your CV: "ran the company that made the largest Nickel discovery of the 21st century, while retaining 100% field equity."

@Matt - Oil & gas are cooked in the kitchen, so a culinary analogy seemed appropriate. Let's hope that next week brings everyone a lobster thermidor, rather than us having to share a pot noodle.

Slightly longer answer. Imagine MOU-2 is drilling into a structure like an inverted teacup. The distance from the top of the potential reservoir sands within the cup, down to the lip of the inverted cup, is estimated at 168m. It is hoped that the 168m vertical interval is gas charged - that is the gross pay. Since not all of that 168m thickness is of reservoir quality, only a portion will constitute gas reservoir - this is the net pay, assumed to be only 21m, which most here think to be a very conservative net to gross pay ratio.

The gas cloud to the east of our teacup is gas leaking from under the rim, and diffusing upwards on the outside of the cup. The concentration of gas in the cloud is likely to be far too low to be commercial - we are after the concentrated gas inside the teacup. Another (but less favourable) possibility is that the fault that forms part of the teacup structure is leaking gas, giving rise to the gas cloud.

So where has talk of this 1000' gas column come from? Our MOU-2 teacup covers an area of 14.3 km², and the resultant volume has been used to calculate the gas likely to be found. There is a significant upside - our teacup sits on top of a much larger inverted-pudding-basin-like structure that extends down a further 150m, and covers an area of 32 km². The MOU-2 drill is designed to go deeper than the teacup structure, all the way to just below the lip of the underlying pudding basin. If we discover that the pudding basin is also filled with gas, that would give us a potential 1000' gross pay interval, which has been incorrectly referred to as a 1000' gas column. My (very) rough calculation suggests that such an upside could give in excess of 1 TCF.

My bedtime now.

I hope we don't hit the gas cloud, because that will mean we have missed the target.

...is the opinion of a now-deleted poster here. Curiously, he/she /it is not alone in their thinking. George W Bush founded a company called Arbusto Energy during the 70's, using Daddy's money, together with the US business advisor to Osama bin Laden's dad. The company changed names several times - including Bush Energy, Spectrum Seven & Harken. Despite having some highly prospective Texan acreage, over an eight-year period they came up with a continuous string of dusters. Apparently, they didn't employ any geologists, and allegedly on one occasion the rig crew were told "I feel lucky today, drill anywhere". Now you know why he was such a great President :-)

I use fundamental information - if there is a significant disconnect between the current market cap and what it reasonably should be, that presents an investment opportunity. Of course share prices go up and down - that is just noise until the fundamental mismatch corrects itself. When I worked in Chicago, I was surrounded by people, who instead of doing what they were paid to do, were day trading on this 'noise' using various charting systems. None of them ever made any serious money.

Let's take PRD as an example. Next week is likely to see the release of highly significant news. The share price will either take off like a rocket, or fall off a cliff. No one knows which, and no wavy line can reasonably be extrapolated to predict either of these possibilities, let alone indicate the correct one.

Take a look at the charting package here on lse. You can apply the following to the chart: Absolute Price Indicator, Accumulation/Distribution, Aroon, Aroon Oscillator, Average True Range, Awesome Oscillator & Acceleration Bands - and that's just the ones beginning with 'A'. You can get whatever result you fancy by picking the appropriate determinants. As John McEnroe would say "You cannot be serious".

As a New Year treat I had unfiltered everybody. I've no problem with ignorance - we are all ignorant of something important, but I do have a problem with malevolence. So, Nigel is filtered by no. 66. Should that have been 666?