Member Info for KeithOz

@Jimmy. You are quite correct that thinner sands are likely to have a smaller areal extent. I have been through Methodology's data on gas flow rate compared to reservoir thickness with a fine-tooth comb, and would also add a further negative that the thinner the sands, the lower the flow per metre of pay. These potential negatives should be balanced against a number of positive factors:

* SDX have run their entire Moroccan business on production from sand reservoirs generally 1m thick or less, and these typically produce 1 BCF over the life of the prospect. That is a high-margin sales value equivalent to half the market capitalisation of PRD. Now factor in that in MOU-1, because of a more cost-effective perforation method, PRD is able to measure flow rates from perhaps another 10 of such reservoirs in the one borehole.

* PRD will have data on the reservoir potential of a number of additional sands, which can be compared with logs from the upcoming MOU-3 and historical drillholes. This will provide a valuable view on both areal extent of individual gas-bearing sands, and optimise positioning of further appraisal and/or production wells.

* PRD will be able to assess if there is biogenic gas in economic quantities at shallow horizons , as well as the deeper thermogenic gas.

So Hannams have been dropped as broker, and SPA are now both NOMAD and sole broker - hopefully that will hurry things up in the finance area. The fact that no announcement has been made for Disko-Nuusuaq underlines my view that JAY intend to run both programmes in parallel, using the same base camp and much of the same equipment and staff. @IvRoche is absolutely correct - time is running out if they want to make full use of the short open season. By now, local contractors should be beginning mobilisation, ready for fieldwork to start around mid-June.

Amaroq (formerly AEX) are further south, so their season starts about four weeks earlier than D-N & Kangerluarsuk, but this is what they had to say on 31st March:

"Preparation for the 2023 field season is already highly advanced with an additional drill rig in transit as well as other consumables in readiness for the programme to commence in early May. Contracts and quotes are in place for camp upgrades, fuel storage, on-site assaying laboratory, and all equipment and facilities required for trial mining and processing."

@Matt - how about Jurassic Oil Park?

Good morning, Matt - may I refer you to a satellite photo I posted on my Twitter feed some time ago, that shows that part of the MOU-NE prospect is indeed to the southeast of MOU-3. I have often complained about the naming of prospects and drillholes constantly changing, but to no avail!

https://twitter.com/KQuick20704342/status/1584692915032317955/photo/1

Oh, another plus - sandjet technology should get an improved gas flow. Another minus - no mention of MOU-2

So someone yesterday acted on this info - very naughty, perhaps they will find out who.

Things I like - drilling MOU-3 & testing of MOU-1 & -3 early June, MOU-NE (now designated MOU-4) being drilled. Now appear to be looking at CNG development themselves.

Things I don't like - Novum picking up shares at 5.7p. Apparent change of strategy yet again - although this is an improvement over what was suggested during the Sunday Roast re. CNG development.

The report is by analysts MST. Their assumptions are that only the two prospects are drilled, and no helium production until 2026, He price of US$400/mcf - unrisked valuation is AU$ 2.60 / share, but are applying a high risk for commercialisation (cos 15%), to give AU$ 0.67c per share, compared to today's 21c. With 224M shares in issue that gives an unrisked / risked market cap of AU$ 582m / 150M, equal to £313M / £91M, vs current HE1 cap of £56M.

The slides are already available. Nothing new, but p.12 does state "We're drilling our first two holes next quarter", and on p.13 "Rig secured".

https://announcements.asx.com.au/asxpdf/20230509/pdf/05pj445m83fj8x.pdf

@Keel1 - I see where you mean, but looks agricultural to me. The change here was around 20th April, we know that groundworks started 10 days before that.

@Nigel - "Any man can make mistakes, but only a fool persists in his error." - Marcus Tullius Cicero

"Investments are underway in gas infrastructure wherein private operators are injecting up to 8 billion dirhams, she said." That's $800M for the infrastructure - they are obviously expecting a lot of gas flow. How much is available for the actual gas?

Forgot to say this is a continuation of the work by Oxford & Durham Universities, with additional local input from Dar-es-Salaam.

I said earlier that a lot has happened since the 2019 CPR, and that much of this new knowledge has not been communicated to shareholders. The following is a link to some diagrams published in 2022 in the rather obscure journal Basin Research - the work was carried out in 2021. I regret you will be unable to read the full article unless you are a paid subscriber, but as they say, a picture is worth a thousand words, and in this case the words are not really necessary. Have a look in particular at the seismic cross sections, and the maps showing where in the Rukwa basin they were surveyed - one goes right through Tai & Itumbula. You can clearly see how gas traps are formed at the basin margin against the Lupa fault (NHE's 'string of pearls') as well as some of the other type of closures that HE1 is prospecting, including fault closures and anticlines, and also where helium has been found at surface. It's a bit technical, but you don't need a PhD to see there are a lot of potential places to find helium.

https://www.earthdoc.org/content/journals/10.1111/bre.12646#dataandmedia

Some background. HE1 was originally a private Norwegian company. Solo Oil bought 10% in 2017 with the option to buy a further 10%. The buy-in was to raise enough cash to drill, and also get drilling advice from Solo's management. I was very interested in this opportunity, having read both the Oxford & Durham universities research on Rukwa, so bought in to Solo. Solo were then unable to come up with the cash for the additional 10%, this coupled with delays in granting licences, meant that drilling planned for 2018 didn't happen.

The Rukwa CPR was released in 2019, and despite a whole bunch of further exploration, assessment and even drilling, has not been updated for four years - I can only assume that if they did, the opportunity would be so obviously huge that someone would take over HE1 even before they even had a chance to make a discovery - the high interest in NHE would seem to confirm that as a real possibility.

Solo was always primarily an investor in projects rather than an operator, and shook up its portfolio holdings in 2020, and changed its name to the current Scirocco Energy. Part of this involved the float of HE1 on the LSE (it was originally going to be the ASX), with Scirocco retaining a smaller stake. HE1 facilitated its float by reversing into Attis Oil & Gas in late 2020. It was at that point I sold out of Scirocco and bought into Attis.

Some of you are complaining about rig delays - I have been waiting 6 years for a discovery - I am sure that apart from Tai-1 & -1A, Rukwa has not been drilled since my first involvement in 2017. I have not seen any mention of hydrocarbons as a potential HE1 asset, and if that was a realistic opportunity, I would have expected at least a mention in the CPR.

@Skittish continues to do some great sleuthing, and I am in full agreement that there is far more going on in the background than meets the eye. This is an enormous opportunity, I expect that we will see that HE1 has rights to 60-80% of the total Rukwa resource after the 2019 CPR is updated. It would make complete sense for the two companies eventually to be bought out by the same major O & G major, who would have the resources to be able to fully exploit the opportunity. My hope is that when this happens, HE1 will retain some stub equity, enabling us poor minnows to have exposure to the upside in the years to come.

Finally, a note on management - Lorna is now the 4th CEO since I have been involved in HE1, and I have more confidence in her than her predecessors. She has exactly the right technical experience to take the company forward rapidly at this stage, which is still very much exploration. There has been some criticism of her lack of corporate leadership experience - but this is not necessary - we have the eminence grise of Ian Stalker, who has all the contacts and experience of corporate machinations that you could ever need. Lorna will grow the resource; Ian will get us the best price.

Since Nico has already taken us down a mystical path, and it's a long weekend for most of you (but not me), I'll pass on a comment from my in-house astrologer. On Friday 21st April, the day the Sunday Roast was recorded, Mercury turned retrograde. This means it appears to go backwards across the sky. Mercury is the planet of communication, so retrograde periods are traditionally associated with miscommunication and misunderstanding, often resulting in various degrees of chaos. That seems to sum up the current situation. The good news is that Mercury's retrograde period ends on 15th May, so things should start to improve in time for the Proactive Q & A.

@michael - I agree this is very confusing!

@jstandmick - the Sentinel-2 passes over every 2½ days, but nothing happening yet at either MOU-1 or MOU-3. I'll post here if anything ever happens, assuming there is still such a thing as a bulletin board by then.

@Jimmy - I have the unfair advantage of having had a double espresso with my breakfast :-)

@Michaelnw. The RNS of 17th March 2022 refers to several target wells. The only one described as 'high risk' is the one designated MOU-NE, which was going to be drilled into the Jurassic oil prospect - this is now on the back burner, and will probably only be drilled by the purchaser rather than PRD. What we now call MOU-3 was at the time of that RNS called MOU-5. This is the mention in the RNS :
"Following desk-top modelling of seismic response to gas in MOU-1, two shallower gas targets additional to the primary 'MOU-4 Fan' appraisal target have been identified at the MOU-5 well location. The shallowest of these targets had strong formation gas shows in MOU-1 (dry gas) and was penetrated in MSD-1 where good quality reservoir was logged."

That sounds like an appraisal well to me, which I wouldn't put at high risk.

Nigel, you need to reboot your ChatGPT - it's producing gobbledygook.

@Legalwolf - the drilling costs will remain the same, since the rig and crew time and the materials requirements will all be the same. Where there will be cost savings is on the mobilisation & demobilisation, since each only has to be done once. I am guessing that this could save $2-4M, shared between the two companies.

The real benefit of a shared arrangement is not the cost savings, but an increased likelihood of a drilling company being prepared to ship a rig & crew to Tanzania for a 3-well campaign, rather than for a single hole which may not be worth their while.

@triplestar - you seem to be out of date with your info - have you not seen this announcement & the subsequent discussion?
https://announcements.asx.com.au/asxpdf/20230502/pdf/05p8vq7zkwxs0b.pdf
Contrary to what you have written, only 50% of past costs will be reimbursed, and the structure has already been revealed - it is 50% of North Rukwa only.