RE: Old timers16 Mar 2021 23:00
Best post I’ve seen today !
There are some crazy valuations mentioned on reddit but I thought I would try and get an idea of the best case upside based on the company's latest resource report.
Looking at the geology map on 88energy's Peregrine prospective resources report it seems that the Merlin-1 drill will drill through all 3 of the Nanushuk targets. The main Merlin target and deepest is N14 and is the same geological layer as Conoco Phillips successful Harpoon discovery 50km to the North. However even though they are unlikely to have the time for the Harrier drill targeting the other two Nanushuk targets at their optimal position the Merlin drill will still intercept these layers, N18 and N20, and so it is possible that they will check the reservoir properties with logging while drilling or more as they drill through them or on the return testing phase.
So although the drill is primarily targeting Mean prospective resources of 645MMstb in the N14 it may be able to determine reservoir information about the other layers too, I don't know if the company has proposed this. If a discovery is made then they will case and then carry out a flow test. Assuming $3 a barrel for 88energy's 50% share this one Nanushuk layer alone could be worth $1bn if sold to a major with plenty of upside as the high case for N14 is more than twice the mean at 1,463MMstb. So the mean case is 7 times the current price but the best case is more than double that.
So lets hope they end up with a successful flow test like ConocoPhillips achieved in the same layer. If the well is unsuccessful then as well as the re-interpretation of Charlie-1 there is the additional fortunate back up that Pantheon resources could get Talitha well to flow from the Kuparuk next week which is a layer likely to extend under 88 energy's acreage. So plenty of upside and possibly some protection from the downside.
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