Member Info for KeithOz

SDX are planning two wells now, three towards the end of 2022, the others referred to 'in the next year' will be within 12 months from now, i.e. 2023. Drilling is likely to be about 2 weeks for each, plus some time to shift the rig in between, so it could be available to PRD by early September. That's not very long to reach detailed agreement, put up the money, and finalise all necessary preparations.

I wonder if this was common knowledge yesterday, as reflected in the fall in share price.

I thought the IOCG data was very well presented, and confirms most of the reasoning for an IOCG that has already been discussed here since November. What was new was the AMT, which had not been made public previously. I have only ever used a rather primitive precursor of this technique (which wasn't based on worldwide thunderstorms, but on the carrier wave for nuclear submarine communications!) clearly things have progressed enormously. The guys seemed confident that the disturbances are related to potential mineral deposition, I'm not so certain - they certainly relate to variation within the larger formation, but whether that is related to economic mineralisation I expect will require higher resolution AMT, then drilling.

IOCGs are typically very complex structurally, with the mineralisation normally concentrated in particular areas, especially breccia zones. The trick is to locate these before drilling - non-productive 1500m boreholes could be financially crippling. We have to trust the KAV team that AMT will provide a sufficiently detailed view of what's deep down below - this is too deep for TDEM for sure.

What is the likely mineralisation? I have some technical questions concerning why magnetite (discovered in the borehole and indicated by the magnetics) appears to be higher in the system than haematite (not discovered but indicated by the gravity data), when it is usually the other way round - magnetite is formed at a higher temperature, therefore deeper, than haematite. Mineralisation in IOCGs can vary enormously - O.D. has a high level of Uranium, which accounts for half the economic value, but the KSZ's nearest neighbours in the Lufilian Arc (DRC-Angola-Zambia) have very little. They are mostly Cu, with a very low level of Au. Only drilling will tell us.

KAV now have an interesting opportunity, but also a problem. There is potentially a Noril'sk on top of an Olympic Dam, which any company would love to have as an opportunity. However, both need a considerable amount of work to prove up the concepts to a level that a major will come in and buy out all or some of the project. That is at least twice the expenditure budgeted for this time last year - and you have to do both together since they are on the same licence area - you can't farm out just the top 500m of a licence, or just the bottom bit!

This is possibly why KAV are :
*taking their time to release the full KSZ review
*keeping options open for Ditau
*investigating the potentially shallower Karoo gabbros in the south of the KSZ
*putting 80% of personnel on the KCB
since each of these other projects may be faster and cheaper to monetise than the NiCuPGE A/B/C/D areas combined with the underlying GRS IOCD.

Haven't we learnt a lot of new acronyms over the last year :-)

PS - another possibility for the slow release of KSZ data is that someone is looking it over under an exclusivity arrangement.

Do we know if CP got a Covid extension to their 2-year period?

This word was flagged up by GRH a few days ago, who quite correctly said that it is the most important thing to consider when putting together a deal. In short this means "what more could I potentially get from this deal, rather than just the assets currently on offer?"

The Morocco assets on offer are seen by many to be MOU-1, -4, -5 & -NE. The reality is for a farm-in, initially of max 25%, to the whole Guercif licence. If I am the potential bidder, I will be looking for the optionality beyond the obvious. It's in plain sight, and has been since the 28th September presentation. Take a look at pages 12 & 21.

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/29105657/Webinar-Presentation-website-Version-28092021-Corrections-15.40pm.pdf

In addition to the obvious, we have MOU-2, -3, -6, -7 & -8 all within the Tertiary gas basin. Add to that the Jurassic carbonate "MOU-NE look-alike" and the Triassic TAGI reservoir - Google TAGI, you will find it is the main oil source for the whole of North Africa. Not on this presentation, but mentioned subsequently, there is also MOU-NW. That's what I call optionality.

Someone here mentioned an offer of £150M for the whole company. You'd really be happy with that?

I've kept out of the rig debate, since there are people here with better knowledge than me, or more time to research the area - I'll just be happy when the right rig & crew arrives at the right place at the right time.

BUT - there was mention of 5000psi specification. That's a lot. As you know, potential gas pressure will increase with depth and temperature, so by 2000m, which is roughly the depth of the basement rocks into which we would not be drilling, you would normally reckon on a gas pressure of around 2840psi. You would therefore specify a rig for at least 3000psi, plus a margin for safety, but 5000psi gives an usually large margin.

There is not a linear relationship between depth & pressure, nor between volume & pressure, so I am not going to waste time doing purely theoretical calculations. However, there is clearly an expectation of overpressure at Tai - remember they have drilled here before, so have a very good idea of what to expect. I have posted previously that I believe the next CPR will propose substantially more than 138BCF of helium.. This was based on the fact that He concentrations are likely to be well above the 4.4% used in the CPR, and that substantial new prospects have been defined by all the geophysics over the last year.

Now we have an additional possible resource multiplication factor - increased pressure. Extra volume, extra pressure, extra concentration. I've been mocked from certain quarters in the past about this, possibly correctly, but if all these factors do come into play, I still think just Rukwa has potential for up to 500BCF of He. Yummy.

Bob, we used to cut the statice and hang bunches of it upside down to dry - kept the colour for a year.

"a hole that flowed nothing in Morocco with no CPR after 11 months of waiting". Really? May I suggest that you go and do some very simple basic research on this company, the sort anyone with half a brain would do. Especially before ****ging off someone else who has done their research. Ignorant & rude.

Anybody who bought today on the basis of this misleading RNS should be suing the company. No mention of litigation that could cost more than 10x the CEG market cap, and a claim that CEG are evaluating a CO2 enhanced recovery programme for Innis-Trinity. Totally untrue, CEG do not have any access to CO2 in T&T - Predator (who are suing CEG) have exclusivity. Pure misrepresentation of the facts to shareholders.

sorry, should have been 'complete absence of the mention of litigation'...

Even more bizarre, the CEG RNS states "A proposed CO2 injection enhanced oil recovery programme for the Inniss-Trinity field is undergoing a detailed technical review for potential execution in 2023." Surely this statement, together with the complete absence of litigation that could wipe out the company, is illegal misrepresentation to CEG shareholders.

MEM - I have actually looked at phosphates in Morocco from a professional perspective (unsucessfully!), albeit 2-3 decades ago. Mick is quite correct that they are mostly in the Western Sahara, but also just inland on the southern coast of Morocco proper. Interestingly, this area has some of the world's most consistent wind & sunshine, so maybe green fertiliser is a possibility for a company with interest in green energy production...

Yep, I took a look at his history. He's either got a grudge against Botswana (why use the name of the resources minister?) is a professional deramper, or teetering on the edge of suicide. Filtered.

MEM - I wish I could share your optimism. We all know the saying that the stock market can stay irrational for longer than one can stay solvent, but Irish politicians can stay irrational for longer than Ireland is likely to remain a State. I attended a Providence Resources presentation in the mid '90s, where there was much excited talk of producing countless barrels of oil from 'the largest undrilled anticline in Europe'. Over 25 years later, still nothing has happened, despite PVR sending Minister Ryan two strongly worded so far letters this year.

We should also not forget that PRD only has 50% of the two licences. Whether PG's value estimate was in $, £ or € doesn't matter, they are all likely to be at parity by the end of the year. I agree Vermillion makes the most sense, especially for Corrib South.

DD13 - ? ? Please explain. I have two daughters, not boys.

Nas-K - If I was as confident that there is economic Helium there as DM appears to be, then I would make sure that the well could produce. After all, he is constantly telling us that he wants to make the most of every $ spent. I am not sure how much it would cost to complete a well ready for production, my guess is around $1M per wellhead on top of drilling costs, plus of course the $50M for the N/He separation and liquefaction gear. Let's get to discovery first, see the flow rates, then we can work out how many producing wells can feed into one set of production equipment, and how it is going to be financed.

TL13: Gautama Siddharta (the Buddha) said:
"Do not believe in anything simply because you have heard it
Do not believe in anything simply because it is spoken and rumoured by many.
Do not believe in anything simply because it is found written in your religious books.
Do not believe in anything merely on the authority of your teachers and elders.
Do not believe in traditions because they have been handed down for many generations.
But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it."

I am happy that what David Minchin is telling us is correct. I have a pretty hefty investment in HE1, this latest interview seems spot on to me and gives me confidence that we will see impressive results by the end of 2022:

https://total-market-solutions.com/2022/06/helium-one-global-ltd-may-2022/

It is the prerogative of others to disagree with my views and invest accordingly, that does not necessarily make them liars or conspirators.

FKC - 4.00am is for sleeping :-) I am quite happy to watch the recording after the school run.

Part 2. The next trick is to evaluate your resource further by way of a prolonged flow test (usually 30 – 90 days) and other pressure tests to confirm that the Helium you have found is going to be exploitable – if positive Commerciality is declared, and the Resource becomes a Reserve. Reserves are great, since they represent calculable potential cash flow, which you can use to more accurately value a company.

I suspect that Tai-3 will be drilled in order to declare a Discovery, and more cash will be raised by rights issue, JV, etc., but at less shareholder dilution. This money will be used to move to a declaration of Commeciality on the same borehole, and possibly also for step out appraisal wells at Tai, or investigation of new prospects such as Itumbula High.

HE1 now has a much broader and deeper management team, and more heavyweight advisors, that suggests to me that they will want to add as much value as possible before entering a JV, and retain the Operatorship of such a venture. Enticing a JV partner on the most favourable terms would involve a new CPR that includes updated volumetric data from the new geophysical work, porosity & permeability from the Qemscan, and most importantly gas composition and pressure from Ta1-3.

Part 1. I have waded through quite a few pages of posts speculating upon what actually happened at Tai last year, these range from the very probable to outright conspiracy theories. Based on these positions, more posts are appearing suggesting what will happen this year, and why. I suspect that some misunderstandings may have arisen as a result of HE1 management using certain terms such as 'discovery' in a technical rather than colloquial sense. May I take a few minutes to try and clarify what I think to be the actual past and future situations.

We first need to understand the technical nomenclature that defines what we have, or believe to have, in the ground by way of Helium accumulation, and its implications for raising finance.

The first stage is that based on a combination of theory, surface seeps, and geophysical indicators such as seismic surveys. An estimation is made of probable reservoir volume, porosity, permeability, and pressure (dependant upon depth). This is normally pulled together by an independent authority as a CPR – Competent Person's Report. The CPR estimates a figure for Prospective Resources – these are at best an educated guess, and are used to encourage suckers like you & me to part with our hard-earned or ill-gotten cash in order to evaluate the prospect further. It is important to realise that Prospective Resources have not been measured, so are high risk. Because of this high risk, most institutions will not lend money to the company involved. Other companies, such as an O&G major, may be more flexible, and prepared to farm in to a project, but it will almost certainly be with a deal that is very favourable to them, but very unfavourable to the owner of the Prospective Resource.

In order to move Prospective Resources up the scale to Contingent Resources, a Discovery has to be declared. This is not just seeing Helium bubbling like a high-pitched jacuzzi at the well head, which would be many peoples' idea of a discovery (note lower case D). It involves measuring the composition of gas flowing from a defined section of the borehole. This may involve various different probes being lowered, and temporarily sealing off sections of the borehole while measuring. This did not happen at Tai, since the borehole was too unstable to safely lower and raise the appropriate instruments. Losing the probes would not only be extremely expensive, but would get you into deep poo with the environmental authorities, since these devices contain radioactive material.

Having a Discovery and Contingent Resources makes borrowing cash and farming out the project a lot easier and cheaper, and with far less potential dilution of shareholders. This is why confirming a Discovery at Tai is the absolute priority for HE1. We know the Helium is there, and roughly where in the column it is coming from, it just needs to be measured.