Member Info for KeithOz

@Voskos. Here is the copied & pasted text of the standard ONHYM agreement, Section IV, Article 15:

Section IV.

ARTICLE 15.

BONUSES

15.1 Contractor Group agrees to pay the STATE, when a deposit of Hydrocarbons in the Area of Interest in which it has a Percentage Interest is declared pursuant to the Association Contract to contain commercially exploitable quantities, a discovery Bonus of an amount of one million US Dollars (US $ 1,000,000). This payment has to be made within thirty (30) days of the official granting of the Exploitation Concession.

15.2 In addition, starting from the date the total production of Crude Oil or Barrels equivalent Crude Oil, from all Exploitation Concessions in the Area of Interest in which Contractor Group has a Percentage Interest has reached and been maintained during a period of thirty (30) consecutive days at the daily production levels listed below, Contractor Group shall pay the STATE the corresponding bonuses payable within thirty (30) days of the end of the Month in which the aggregate levels of production have first been so maintained:

50,000 BOPD/BOE per day, one million US Dollars (US$1,000,000)

75,000 BOPD/BOE per day, two million US Dollars (US$2,000,000)

100,000 BOPD/BOE per day, three million US Dollars (US$3,000,000)

More than 100,000 BOPD/BOE per day, four million US Dollars (US$ 4,000,000)

It is understood that the Bonuses specified in Article 15.2 will be a one time, lump sum payment for each level of production when such level of production is reached and maintained for a period of 30 consecutive days.

The Bonus payments established in Articles 15.1 and 15.2 above shall be deemed development costs and shall be deductible for the calculation of Contractor Group’s taxable profits."

I hope that this has knocked this question on the head.

I don't bother with HotCopper - even worse than here. "Also weathered basement suggests possible atmospheric exposure before overlying sediments were laid down...Timing of helium release critical." Jeez, talk about trying to turn a positive into a negative.

* Reasons have been given here in detail yesterday for why 2D seismic is imprecise (especially by @seisprocessor at 19.59), and the CPR highlighted that issue. Investors should be delighted that the primary potential reservoir is a lot thicker than expected.

* The basement is up to 3 Bn years old. Yes, we know it has been uplifted and weathered on a number of occasions. The weathering will help the breakup of the top basement, facilitating Helium release. The Karoo Supergroup ranges from 360M to 180M yrs old, so was of course laid unconformably on the underlying basement. That's what basement means. Perhaps the HotCopper poster thinks that 300M yrs is a critically short time for Helium release and accumulation.

More questions on timing of test results on Telegram. My response, fwiw:

One thing you have to remember - upon a declaration of discovery, a $1M bonus has to be paid to Morocco within 30 days. I can't recall if that amount is held in escrow, but it will have to be handed over. You wouldn't want to make such a declaration until you had someone lined up to buy your gas, who was also prepared to pay at least $1M upfront. For that reason, I expect no announcement will be made until both sets of tests are complete - 2 wells minimum will be needed to ensure continuity of supply. I have said previously that a minimum would be 7 days testing for each well, plus 3 days to agree wording with ONHYM. That would give us the end of this week at the earliest. The recent Prospectus suggested 3 weeks for each well test using Sandjet - but PRD is testing a smaller number of horizons with faster conventional perforation equipment. If the tests took 2 weeks each, that would take us to around Thursday 16th November. All this assumes we started on 16th October as planned. If only one well is announced at a time, or results come earlier, I will be very happy to be wrong.

@DrillbitBill. You ask how there could be such a variation in depth from that previously forecast. Only 2D seismic was shot, which is far from ideal, but a sensible cost-effective approach for shallow onshore drilling. From your username I assume you know that in order to convert TWT (two-way time, the time taken for the seismic wave to travel from the surface, be reflected off the subterranean strata back to the surface) into actual depth, it is necessary to estimate the density of the rock - the denser the rock, the faster the transmission of seismic. Of course without drilling it is not possible to know the density of the rock, so they extrapolated from the two early hydrocarbon boreholes which are some considerable distance from Tai-C. The CPR recognised considerable uncertainty, and consequently already had a wide range of possible depths for the Karoo. I can possibly understand that your "confidence in HE1 is shot" were the potential principal reservoir only half the thickness initially proposed, but in fact it appears to be almost double. This will also result in a larger area for the closure. The CPR gives a 3U (high estimate) of 3.2 BCF for the Karoo. and that was with a miserly 1.75% He concentration. I suspect it will actually be well above 5.

However, I appreciate that there is a set of unscrupulous people on here who are trying very hard to make positives seem negative in order to get nervous folks to sell, thus driving down the share price in order to achieve their own agendæ.

"The primary exploration target for the Tai prospect is the Karoo Sandstone".

Fig 2.7 shows the Karoo to have an estimated thickness of 490m at Tai-C.

Oh look, the primary exploration target is 400m thicker than expected.

@EarlofAim - "scam RNS" - your ignorance never ceases to amaze me. Have you no idea at all what a spectrometer or a chromatograph do? Rule #1 is you really shouldn't invest in something you don't understand.

@Joe90 & @Fart123 - you are both incorrect in your negative interpretations, again.

@Blubay, there was Helium last time, it was not sampled for solely mechanical reasons - borehole conditions - not because there wasn't gas to sample. Everyone involved, from all the companies, already knows there is plenty of Helium at Rukwa.

This was a positive news release, but as I've just previously suggested, many folks here are missing the point of what is going on.

'my', not mu!

Looks to me as if NHE & HE1 are coordinating releasing TD / wireline results / gas composition results synchronously. This would reinforce the idea that all three Rukwa licence area companies are working closely together, and that an 'interesting' corporate transaction will result - it is that, and not the day-to-day share price, that is mu final goal of this investment.

The actual level of He detected in the gas mixture bubbling up in the drilling mud cannot be correlated with the concentration likely to be found in the reservoir rocks. This gas has come out of the formation despite the pressure from the drilling mud designed to stop it from doing so. On the way up to the surface, the formation (released) gas is contaminated by drilling mud and air. Nevertheless, this is an excellent sign that He is present, and the estimate of 60% net pay in the strata drilled so far is also very encouraging. When drilling for hydrocarbons, a level of 1% formation gas (in that case methane) is often indicative of a likely commercial prospect. Since He is 150 -300 times more valuable per given volume than methane, a much lower formation gas reading for He is still a positive indicator.

Also noteworthy is that despite He concentrations increasing with depth, this trend was not echoed by levels of CO2 or methane, demonstrating that this is likely to be a real indicator of Helium presence. Obviously direct in-hole gas samples will need to be taken, and measurements made both on-site and confirmed in the lab.

I suspect that this announcement by NHE will provoke HE1 into issuing an update today, including information on at least He shows, hopefully also measured He levels.

NHE has just closed at 24.5¢, 6.5% up on the day, after a peak of 26.5¢; +15% on the week; and +34% on the month. Imho, HE1 has some serious catching up to do.

This is what is happening underneath that cloud cover:

https://twitter.com/KQuick20704342/status/1718779534957482473/photo/1

@GoldGirl - as well as spudded? Surprised they had the time & energy 😍

Challenger is doing some financial juggling - taking out a bridging loan to cancel the convertible loan note, in anticipation of near-term finance from the Cory Moruga sale to PRD. Now 10.5 billion shares in issue, plus a new set of 250M warrants issued today. Perhaps they might like to throw in Innis-Trinity for a few bob extra - looks like they need the money.

https://www.londonstockexchange.com/news-article/CEG/short-term-conventional-bridge-loan/16184406

Some of you are aware of the TDFI - Troll Density Forward Indicator. This is the number of green boxes on this board representing posters that I have filtered for providing malevolent nonsense. The higher the density of trolling posts, the greater the likelihood of positive news in the next couple of trading sessions. I have found it the only effective TA indicator.

I have just filtered colonpolyp for 20 worthless posts in the space of two hours - presumably it was going for some kind of record. Added to the other green boxes, this gives the highest reading of the TDFI I have ever seen for any company covered by lse.

Draw your own conclusions.

1. Maybe 1st test is still ongoing.

2. Maybe results are still being calculated & interpreted.

3. Maybe results from individual wells will not be released - only at end of the whole programme.

4. Maybe ONHYM are discussing matters with that nice Mr. Mohammed, who owns lots of gas-dependent industry, and who has personally led talks with US, EU & Israel to promote bilateral agreements.

My bet is on #3, but it's only my guess. One thing I do know - it's my bed time.

Q. (from danielpile) "Any guys from PRD there?..would have thought Paul would be attending "

A. (from Malcy) "Nope, no one although I messaged Paul to ask for a chat his reply was terse and to the point, he’s busy on the ground prepping the next test. "

NEXT test? You mean the one after the one that's just finished?

Just turned up this quote from 2022:

"“Errors are always possible but, contrary to the information relayed, the National Office of Hydrocarbons and Mines does not use the term ‘discovery’ and treats the subject with great caution because words must be weighed. This is our guarantee to avoid a second Talsint affair,” says the associate researcher at the Policy Centre for the New South (Rabat)."

https://www.theafricareport.com/199829/will-morocco-hit-the-oil-jackpot/

@PredFan. You are asking if management know if they have gas yet. Since I don't know when they started testing, and don't know what tests they are running, that's a bit of a difficult question to answer. The nearest I can get is that management knew before the testing started that they were going to get a very good flow rate, just not the exact number.

There is also the small issue of approving the wording of any announcement. Morocco has an unfortunate history of premature announcements of self-reliance on hydrocarbons:

* 2000, King Mohammed VI, newly on the throne, went on national TV to announce a discovery of oil and gas at Talsint that would forever change the economic future of Morocco. Unfortunately the company involved, Lone Star Energy, was allegedly a scam, and there weren't any hydrocarbons.

* 2009 Repsol drilled Anchois-1, again announced as a great discovery. 14 years later, no sign of production.

* 2016 Sound Energy had a blowout party to celebrate the life changing discovery of measureless gas at Tendrara. 7 years later, we're still waiting.

* 2021, Europa Oil & Gas announced they had 2bn boe offshore Agadir. 2022 - revised down to 1Bn. 2023 - surrendered the licence.

I suspect approval will need to go higher than ONHYM.

Sorry, no flare at MOU-3 or MOU-1. Everything looks more intense in infrared yesterday - probably the increased ground heat due to sun / time of day at transit. I do not know what testing procedures are being undertaken, but it would be very lucky to catch a view of a flare if intermittent/isochronal flow testing is being performed, since the satellite transits every 2½ days. I assume that the flaring will be done in a pit (there was a Tweet of one being constructed at MOU-4), so may not even be readily visible from the ground during daytime. Someone asked about the PANR flare last year - this was done from the top of a 20+ metre mast right beside the Dalton Highway. Only oil & ngls were being flow tested, so all the gas was vented, and since it was a fracked bore, a 30-day continuous flow test was employed. Very visible from the ground, and also from satellite using infrared, given that the flare heat signature was contrasted with an ice & snow background. Not comparable with the PRD situation.

Petrowicki has a useful briefing on gas flow testing:

https://petrowiki.spe.org/Deliverability_testing_of_gas_wells

Much of this is rather over-technical, so here is a brief extract:

"Several deliverability testing methods have been developed for gas wells. Flow-after-flow tests are conducted by producing the well at a series of different stabilized flow rates and measuring the stabilized BHP {bottom hole pressure}. Each flow rate is established in succession without an intermediate shut-in period. A single-point test is conducted by flowing the well at a single rate until the BHFP {bottom hole flow pressure} is stabilized. This type of test was developed to overcome the limitation of long testing times required to reach stabilization at each rate in the flow-after-flow test.

Isochronal and modified isochronal tests were developed to shorten tests times for wells that need long times to stabilize. An isochronal test consists of a series of single-point tests usually conducted by alternately producing at a slowly declining sandface rate without pressure stabilization and then shutting in and allowing the well to build to the average reservoir pressure before the next flow period. The modified isochronal test is conducted similarly, except the flow periods are of equal duration and the shut-in periods are of equal duration (but not necessarily the same as the flow periods)."

Surely it is common knowledge that deep beneath the Swiss Alps there is a system of vast grottos, wherein tens of thousands of malign elves, sublimely skilled with the abacus, are employed by all the market makers. Every MM has an elf for each individual stock, and they spend all day plotting how to steal fractions of a halfpenny from dumb private investors. In this esoteric world, keeping a balanced book, profiting from spreads & volumes, algorithms, are all concepts unknown. This must be true, JH talks about nothing else all day and every day.

@Revoy - sorry, didn't read your post correctly. I had suggested an upside of 2 mmcfgd PER METRE of reservoir. Methodology & others have been using a little over 1 mmcfgd per metre of reservoir - this was based on data from wells drilled in the Rharb basin by Circle/SDX. However, the small size and lower pressure of those reservoirs meant that testing was done with the use of small diameter chokes - averaging around 32/64". I suspect (but do not know) that with overpressure and a reservoir that is large enough not to be quickly depleted, that PRD may be able to test with larger choke sizes, likely enabling higher flow rates per metre than out to the west.

Again, anyone with specialist knowledge of this please let us know your views.