Member Info for Madpunter

The wet gas from T39 could be re-injected into zones 9,14 and 15 from another well to help equalize the pressures between the zones.

Sorry I copied the link from my previous posts and it didn't work.
http://gekengineering.com/Downloads/Free_Downloads/Choke.pdf

If they are flaring the gas, then I assume that is the reason for testing with a 6/64" choke and not a 8/64" choke or a higher number. The pressures and their associated risks might also be a factor for the choke size.
http://gekengineering.com/Downloads/Free_Downloads/Production_Choke_Basics.pdf
When the EWT is completed on T39 (I wrongly thought this had already been done due to the wording of the last RNS), then until processing and transporting the gas via a pipeline is available, the gas could be re-injected to maintain higher well pressure and oil production.
https://en.wikipedia.org/wiki/Gas_flare

WHamBoy - If the flow rates are 1000bbls/d then yes 1.2p, but with a field plan for 10,000 in the next year, then sentiment could drive the price quickly for the 12p party IMHO. If a major is happy that the gas is commercial with new wells, then very much higher is possible. Mtarekhevi has 8.3TCF (OGIP) of which 5.8TCF is recoverable (70% recoverable). Tarabani has 4.6TCF (OGIP) of which 3.2TCF is recoverable (70% recoverable). With the same geology for Block 12 and 202TCF, then @ 70% recoverable = 141.4TCF.

As many as 60 companies bid for BHP's assets which BP bought. IMHO when the flow rates from the EWT's confirm 1000 bbls/d the majors will be queueing up to bid.
https://www.bloomberg.com/news/articles/2018-07-26/bp-to-pay-10-5-billion-for-most-of-bhp-s-u-s-shale-

Assuming 1000bbls/d is achieved by the end of the year from the four wells. Then the cost of each well, $3.3m x 4 = $13.2m. The cost for the wells to produce 10,000bbls/d would equate to $132m. Then for 190,000bbls/d = $132 x 19 = $2.508bn (the 190,000bbls/d is just for comparison). BHP spent $20bn to reach 190,000bbls/d from the assets that they have just sold to BP (from the link below). No wonder some of the majors have been in the data room!
https://www.reuters.com/article/us-bhp-divestiture-bp/bp-to-buy-u-s-shale-assets-from-bhp-for-10-5-billion-id

WHamBoy - The article in the link below states that the breakeven for the Permian is well below $50 per barrel. Assuming that means more than $49/bbl, then multiplying the value of FRR x 4 would seem appropriate.
https://www.reuters.com/article/us-bhp-divestiture-bp/bp-to-buy-u-s-shale-assets-from-bhp-for-10-5-billion-id

BHP paid over $20bn for those assets in 2011, so with the interest on borrowings for the transaction and the running costs per barrel they made a loss of $0.8bn for the year ended 30th June 2017.
The following paragraph is taken from the BHP RNS:-
For the purposes of completing the disclosure under the requirements of UK Listing Rule 10.4.1 for a class 2 transaction, the gross assets the subject of the Eagle Ford, Haynesville and Permian sale were approximately US$10.9 billion (excluding goodwill of US$3 billion) at the half year ended 31 December 2017, and the loss before tax for the year ended 30 June 2017 was approximately US$0.8 billion.
Therefore, you're not comparing like with like, as the costs of $12 per barrel for Block 12 are very low. ~I don't know the costs per barrel for BHP assets sold, but if they were $48/bbl for example, then your valuation for FRR would have to be multiplied by four, giving $220m.

WHamBoy - The operating costs must be very high, otherwise why sell for $10.5bn, when 190,000 bbls/d @ $70/b = $4.85bn/y.

FiXXXeR - Any chance of posting your chart here? Thanks in advance.

Your right 5p. I should have written it down or used a calculator instead of doing it in my head. I'm out by a factor of 10. It should be 176 bbls/d. I think Zaza must have been out by a factor of 10 as well. With only a 8/64" choke the flow rate was 529 bbls/d.

Each year from each well in zone 19, after paying for the cost of each well. Zaza said this about 5 minutes into the interview. $4.5m equates to a flow rate of 1760 bbls/d. This could be achieved with the choke reduced, which increases the pipe bore. eg. if the choke changes from 8/64" to 24/64", then the bore is 3 x bigger. If the flow rate increase was linear (It's not as there are other factors), then 3 x 529 = 1587 bbls/d. At $70/b = $4.05m/annum. IMHO a choke of between 24/64" and 32/64" will give the profit Zaza anticipates just from zone 19 for each well.

If each well produces 4 - 5 million per year from zone 19, then for $4.5m = flow rate of 1760 bbls/d, using $70/ bbl. If it is £ the flow rate will be more. IMHO this would require the choke to be in the 24/64" to 32/64" range ( the flow rate increase with the pipe bore opening is not linear, so I can only guess. eg. 3 x bore size (8/64") = 24/64" or 3 x 529 bbls/d = 1587).

StarRage - As T39 is much deeper and also has associated wet gas the pressure is much greater. If they open the pipe bore by decreasing the choke it may cause damage from erosion and vibration. See page 23 of the link below :-
http://gekengineering.com/Downloads/Free_Downloads/Production_Choke_Basics.pdf

offtheball - Yes, there's a huge variant between 529 and 250 bbls/d, just from a choke decrease from 6/64" to 8/64", hence the following sentence from the RNS :-
'The Company anticipates that production rates from future development wells may be significantly higher.'

StarRage - Read my post at 1125, it's a 8/64" choke. With the choke fully open then 8 x 14 = 112 days if linear, which it isn't.

Sorry link didn't work.
http://gekengineering.com/Downloads/Free_Downloads/Production_Choke_Basics.pdf
StarRage - Where does it state 'initial flows' in the RNS. The EWT started on 4th July and finished 14 days later with the RNS 15 days later. See my previous post about the EWT.

offtheball - Yes.
SimonT - It is a conventional oil play from zone 19, therefore it doesn't need fracking and the recharge rates are much quicker. The historically declining wells were all fracked, were at much shallower levels without the associated wet gas and had much lower pressures.
Timster - Yes, it is one zone, therefore, there is no waiting for the co-mingled zones pressure's to equalize.
Furthermore, the choke is only 8/64". If the pipe was fully open, then with a linear increase it would give 8 x 529 = 4232 bbls/d ( this wouldn't happen as there are other factors) and the pressure would drop and also the recharge rate. Again, if it was linear, which it isn't it would take 8 x 14 days = 112 days. If the choke size is decreased and the pipe is opened, there is a greater risk of damage; they would have to flare the gas for much longer (they aren't allowed to produce in Georgia with flared gas and I don't know the legalities on times allowed for testing), and there could be logistics problems with the amount produced.
http://gekengineering.com/Downloads/Free_Downloads/Choke.pdf
Malcy's blog also states 'the EWT delivered' when writing about T39, but 'continue', when writing about T45 and Dino.
https://www.malcysblog.com/2018/07/oil-price-frontera-resources-dgo-echo-energy-link-and-finally/

IMHO when the PI's who have not fully understood the significance of the RNS are gone and the share price stabilizes, then Zaza will release the extended flow test rates from T45 and Dino. We already have T39's EWT as stated in the RNS:-
On 4 July 2018, Extended Well Testing ("EWT") commenced at T-39 well, by perforation of 21m interval of Zone 19, situated between 2970m and 3000m. After a well clean out, the well started to flow light ( 41.5 API), sweet crude oil together with wet gas and, under natural flow, achieved following production rates: 529 bbls/d of oil and 600,000 scf/d of gas using an 8/64" chock size, 347 bbls/d of oil and 425,000 scf/d of gas using an 7/64" chock size and 250 bbls/d of oil and 350,000 scf/d of gas through 6/64" chock, demonstrating excellent well deliverability. The Company anticipates that production rates from future development wells may be significantly higher.
As T39 is a conventional oil well and didn't need fracking, there are no fissures that require opening as the reservoir is in a porous rock. Also, the greater pressure and the wet gas improve the recharge time.

WHamBoy - If the choke size only gets opened up a few notches, it shows how the flow rates could be significantly higher.