Member Info for KeithOz

Yes, the rig has been gone for several days. I gave a link to the Sentinel-2 L1C satellite on Thursday 10.35. You can clearly see the flare every day since then, even through the cloud.

Winnifrith has a grudge against anybody who is more successful than he is. If you want to decide if you should take Winnifrith's advice, this is a must-watch:

https://youtu.be/Kf5tT02Tw8A

Maybe the OP is thinking of a situation that occurred a few years ago when a flare was observed from the offshore rig drilling HUR's first hole. That did necessitate an RNS, because that was the first indication anyone had that hydrocarbons were actually present at that prospect.

A very different situation for PRD & MOU-1. It is already public knowledge that there is gas at MOU-1. This is what 'Contingent Resources' indicates. It has been publicly stated that flow testing is imminent for MOU-1 - this means that the gas that is already known to be there will be released to the surface, and probably flared. Observing such a process by a publicly-available medium would not result in a disorderly market, nor would acting upon such an observation be in any manner illegal, quite simply no price-sensitive information is revealed.

How and why one would act upon it is rather questionable, because information that is of value for trading purposes is not observable and not in the public domain. That information is of course the flow rates and indications of reservoir connectivity. No one with half a working brain would think that you can determine anything of commercial value from observing a flare under the current circumstances, it merely tells you that already announced operations are under way.

There may be an RNS stating that testing has begun, if so, that is merely a comforter to those with a nervous disposition, the impatient, or those unable to understand the language in the previous RNS. All that really matters is the quantified results, which we have been told will be available in March.

@MEM. You are correct re. market valuation, this is why Paul has always talked about a trade sale. A company already in the business knows far better than the market how to value a company, and in the current environment there will almost certainly multiple bidders, thus ensuring a realistic value will be achieved upon sale.

I think that Rosso is suggesting that MOU-1 will need to be developed to the stage that it is producing gas in return for money, before MOU-2 can be re-entered. Paul has made it clear that is not the case.

@Mick & Bob - did you see Cube's new name for it? - The Guercif Super-Basin (Feb 21 / Twitter).

Correct.

Here it is on the Sentinel-2 1C satellite, appearing for the first time yesterday. I have applied spectral bands 8A, 11 & 12 to emphasize heat. You need to copy the whole rather long link and paste it into your browser.

https://apps.sentinel-hub.com/sentinel-playground/?source=S2&lat=69.98542410191305&lng=-148.7045431137085&zoom=15&preset=90_ATMOSPHERIC_PENETRATION&layers=B01,B02,B03&maxcc=96.91999999999999&gain=1.0&gamma=1.0&time=2022-08-01%7C2023-02-22&atmFilter=&showDates=false

Ben told us that the announcement of 2023 strategy scheduled for end of January will now be end of February, so that means within the next three working days. Some of this delay will be due to the unexpected results at the KCB, but I assume the KSZ and Ditau plans would have been agreed some time ago. On November 8th, plans for the latter two areas were published on Twitter:

KSZ N - https://twitter.com/KavangoRes/status/1589928517672009730/photo/1

Ditau - https://twitter.com/KavangoRes/status/1589928557178159108/photo/1

We were also informed in the Prospectus of the minimum spend requirements for these projects. I am very curious to see what work has been performed between November and now, given that finance had become available and KAV geo staff have presumably been available since pre-drilling work on the KCB had by then finished. Some of the work planned, such as TDEM, would be performed by contractors, in this case Spectral. Contrary to what some may have assumed, CSAMT is a well-established technique where the field work could readily be carried out by KAV employees, although data interpretation & visualisation would almost certainly be done by an external company. The amount of work that has actually been performed over the last 3½ months will give a pretty good idea of how serious KAV are in making an economic discovery during the remainder of 2023.

@deep100: "The farmout process to fund our drilling programme continues, with Lab Energy Advisors Ltd in discussions with multiple parties with non-binding offers due at the end of Q1 2023."

@Deep100. I've now had some time to look at this issue. Most of Nobel's licence areas are either under the lake, or on steep ground to the east of the lake. I would assume that they would require a different type of drill for these. Noble has 3 lead areas - Chilichili is under the lake, but Mbelele and Kachinga are on the flatter land to the east of the lake, north of Tai. Noble are still defining the drill prospects on the latter two licences, but expect one drill in each during the 2023 campaign. These two are the same terrain as Tai, and close by in distance.

I expect that the order of drilling will be 1. Tai, 2 & 3. Mbelele & Kachinga, 4. Additional HE1 target, maybe Itumbula North. Yes - I expect we will get two hits this year, not one, since there will be substantial cost savings. I also assume that both companies have already agreed the rig provider in principle, and are now in a position to conclude negotiations and formalise a contract.

This announcement did absolutely nothing for NHE's share price, which was unchanged at an all-time low of 14¢ (issue price: 40¢) with less than 250K shares changing hands. Don't expect fireworks from HE1 today.

@BC2504 - stupid me! For me, tomorrow is today.

From Noble:
"The Company is pleased to have executed a cooperation agreement with our neighbours in the Rukwa Basin, Helium One Global Limited (AIM:HE1) (“Helium One”), to cooperate in sourcing and securing a suitable drilling rig, associated services and arranging logistics as required for the Drilling Campaign. We expect this common-sense development to result in significant synergies and cost savings, for the benefit of both groups and our respective shareholders. We look forward to working with Helium One to execute a highly cost-effective and successful 2023 drilling campaign in the Rukwa Basin"

"Maybe its time they got an experienced hands on O&G professional in, with a track record proven over many years".

They have, her name is Lorna Blaisse.

oh, and it's hardly the first O & G rodeo for NEDs James Smith & Nigel Friend.

Just an addition to MickTrick's post on potential pipeline costs for CHAR highlighting the cost differences for offshore/onshore. When Anchois-1 was drilled in 2009, the testing costs alone were $14M. You can probably double that or more for today's price. For that sort of money, PRD would get 3 wells into production, plus outright purchase of the CNG gear.

Hi O & W, you posted after my bedtime, but I see that others have partially answered your questions re. how long would a P90 resource last. I would expect that the conservative estimates used for just about every parameter of the CPR will put MOU-1 closer to P10.

With regard to the testing, it is not just a matter of confirming flow rate, but also investigating the extent and connectivity of the reservoir - not just to MOU-2, but possibly also towards GRF-1 to the south of the fault. MOU-2 has demonstrated an effective seal that has prevented upward migration of gas to the reservoirs that are equivalent to the shallow reservoirs in MOU-1. Therefore testing these shallow reservoirs in MOU-1 is not going to provide us with useful information other than simple flow rate, hence the decision to focus on the main deep reservoir sands, and expand the testing parameters there.

I am sure that this does not mean the MOU-1 upper levels will not be added in for production purposes, they may increase production by perhaps 50%. Although Paul has talked about pre-selling gas, I do not believe he will enter into any long-term continuous supply agreements until there are two (preferably three) producing wells. This ensures continuity of supply - most industrial users would want this assurance since they are investing in production that requires a regular energy supply. Just as a gas supplier wants a take-or-pay clause in the contract, so a buyer will want a clause covering penalties for non-supply. It is exactly this problem that prevented SDX from renewing a 5-year contract with their largest customer.

Interesting that I do not see an apology.

...but whatabout Hilary's emails?
...but but whatabout Hunter's laptop??

Whataboutery - the clear indication that someone is unable to formulate any kind of informed opinion about the actual matter under discussion, so attempts to change topic as a distraction.

It seems that some have forgotten (deliberately or otherwise) the potential of MOU-1 on its own. While we are waiting for an update of progress towards testing, perhaps a reminder is of use.

Rigless testing is to be performed on only the primary reservoir zone of MOU-1. This has a gross interval of 72m, net interval of 12m. The testing of this zone is being upgraded and will be extensive (RNS 25 Jan 2023). Specialist flow testing equipment and operator expertise is required due to the unconsolidated nature of the reservoir intervals, and the overpressured nature of the well. Depending upon size, your car tyres are likely to have an operating pressure of 25-40 psi. MOU-1 was pressured at 2700 psi. Needs to be done carefully, hence the time taken to select the right people to do the job properly.

MOU-1 wireline data was evaluated by Nutech, Petrostat did sedimentary work & QEMSCAN, APT did chemistry & source rock maturity work, Rockwash did the sedimentology. If you are not familiar with these four services companies, look them up, they are the best in their respective fields.

Our friend Methodology over on Reddit has provided a tour de force analysis of Rharb Basin flow rates, and concluded that on average, flow was 1.36 mmcf/d per metre of reservoir. Furthermore, these flow rates per metre tended to increase the thicker the reservoir. MOU-1 has the thickest reservoir yet to be tested, so even at average rates should produce 1.36 x 12 = 16.3 mmcf/d, my guess would be around 20 mmcf/d. Gas will be sold into the hungry local market at $16 / mcf. Let's assume a conservative figure of only 10 mmcf/d is produced, that gives $160K per day, of which $135K is profit. The intention is to lease CNG equipment, and begin production quickly - the area adjacent to MOU-2 will be the CNG plant site.

I said yesterday that once MOU-1 commerciality is proven, finance is no longer an issue. Even if the cost overrun for MOU-2 were to hit the highly unlikely figure of $1 million, that would be paid for by one week's gas from MOU-1. Paul has stated the intention to forward sell up to 6 month's gas to a local user, which would cover any possible drilling plans for the rest of this year. Alternatives would be eligibility for Reserves Based Lending, or a capital raise. For the latter option, doubtless the trolls will be throwing up their hands in horror and saying "I told you so" in imitation of Cassandra, but they clearly have not thought it through. If you have one well producing $1 million a week, isn't that likely to do remarkable things to the share price? Therefore, you won't have to place many shares to raise the necessary sum. Of course, that will be conveniently forgotten since it does not suit the shorting / lower sp for cheaper entry agenda.

My final reminder point - take a long, close look at pp 20 & 21 of the September 8 2022 presentation - that gives some very interesting financial projections for MOU-1.