Member Info for Moleinahole

The reason was not discussed of course.

It seems to have been opportunistic but the company have wanted to get back into those zones since Niko came up short 18 years ago.

I think the answer may be in the CPR. The CPR goes as far as zone 19 and does not put numbers on the lower zones. Hence the obvious reason to me would be that the purpose of what they are doing now is revisiting the data that was used in the CPR. They have long term profile of zone 9 from Dino. They are getting zone 14 /15 from. T45 and Dino. T39 will give them zone 19. A big problem with the old cpr was that they were unable to fix the flows from any one zone due to them flowing multiple zones at once.

Zones below 19 are not in a CPR so require alot more work rather than an update. I think there would be a good chance of that when Niko is revisited.

If there is more associated gas the lower you go it also would need a solution to process it let alone the increased risks of problems with the increasing pressures. While zone 19 might be reconcilable to eldari a z 14/15 the deeper you go the comingle must get more complex with the higher amounts of gas and rising pressures.

Remember also T39 had already been identified as being best location in that part of the field for zone 19.

Possibly but now not the time to be doing that unless it was to a household name! But can't see them quitting now. But you are probably correct that Steve might be the first to cash in his chips as even he must be getting on a bit now.

Prod - if they have not got a plan around what they are doing at T45/Dino/T39 then poor flows at Ud2 will look like a sideshow. For sure UD2 has not helped sentiment and simply helps feed and reinforce cynacism.

It is very odd that we have had no media round so far post the announcement other than a short Malcy repeating the RNS (with a bit of an aside on the time being taken) and a WHI holding note and a few others just repeating thew RNS. Have i missed anything of substance? Not sure what to read into that. Possible change of target audience or a orcestrated sequence for the flow of next news?

Well stranger things have happened but the board secretly selling in the background would not be high on my list.

First, we have an institution who took a locked in equity position.
Second, YA reduced their monthly conversion and were happy to be push the date out.
Third, Outrider remain with a place on the board but no equity voting rights we know of
Fourth, the board have added shares in the last year at prices higher than current and converted nominally their debt at 1p a share.

The truth is usually simpler. This is going to be a difficult period till the next news on here at this rate.

Here we go again. Devex it was most definitely applied to UD2 of that I have no doubt.

But two things:

I think people really need to learn how to listen to Zaza. First, you need to be careful applying literal numerics to some of his comments! Comparing art and science comes to mind here.

The context of the 90% COS comment is more important than the actual number. The line before it was that originally UD2 was 10% chance due to the well being obstructed and them not being certain whether the obstruction could be removed. Once they had figured out what the obstruction was and that they could fish it out then I read it as the well operations became a 90% chance of success. They could not have known at that point what volumes the testing would show. And that has indeed been shown to be true the well was cleaned and stimulated. But the use of the rhetorical device switching from more likely to fail to more likely to succeed was the intended takeaway not that it was measured empiraically as 90.00000000001% success or 89.00000000099%.

Then we move on to the now tired discussion about christmas presents. The context of that comment was of course the revisit to UD2 at stage 2 in december. Zaza was aware from the AGM in November about how excited people were about UD2. So prior to them testing stage 2 with a bit more power and proppant I would say he was hoping he could deliver good news (christmas presents) to the expectant children (shareholders) from that piece of work. They tried it did not flow as everyone wanted. Going on and on about it is unhelpful.

So if you track the history of this well:

1. UD1 was abandoned by soviets as they could not control the drilling weight making it impossible to complete.
2. UD2 was drilled within 10 m of UD1 by the same people over a long period. To get better control they used vast amounts of drilling fluid and worked on the well over several years going right down to 5000m. October operations showed the well bore below 2500m was in bad condition and the drilling mud was an issue. December into January showed that you could get it to flow but that contact was poor. May operations have shown that the well bore cementing was not strong enough to handle the fraccing power needed to get out into the formation and unblock it. It sounds like the fracs have gone up and down the weaker areas around the drill and not out into the formation.

So going back to the change of success. They succeeded in getting the well to a position it could be worked 100%. But the venture has ultimately not been successful in terms of commercial flows but 100% successful in terms of technical information gained.

That won't help the share price today and given the vitreole I'm likely to generate I'm not sure why I'm even posting this.

offtheball. On T39 I have asked several times for any technical people to explain what technical solution would enable Zone 19 and zone 14/15 to produce together given the pressure differentials and presence of gas. That would answer the question as to how long it will be left to stabilise.

Either:
1. You test flow zone 19 for a short period and then plug it pending getting a solution for the gas and do zone 14 and 15
2. Equally maybe you flow 19 the higher pressure zone until the pressure drops deploying a solution to handle the gas (monetise or re-inject) and equalises to zone 14 and 15 and then add them - that could take a while.
3. You have a technical solution to equalise the pressures and flow both zones simultaneously.

They won't learn anything that they have not learnt at Dino and T45 about zone 9, 14 and 15. I think T39 is the pre-run for the Niko re-entry and is now aimed at learning about the eldari b. As I've said before I also think doing work in the eldari b supports the study defence in any arbitration discussions.

Ok T45, Dino and T39.....but short term T45 and Dino deliver revenue enabling YA to be paid off and dilution avoided.

I agree that the deeper horizons look promising but we will have to see how they develop. The different profile of zone 19 and below means that you have a second play in the Eldari b and below that a third play in the gareji gas. So yes as per Monty Python spanish inquisition we have 3 plays but short term zone 14 and 15 are pretty important I'm sure you would agree on that.

After that we could go back to Mirzani, Basin Edge or even back to Mtsare deep gas. There are so many plays that they need to concentrate and get at least one properly monetised - and I think eldari a in taribani should do that.

I'm neither confident nor pessimistic about results. They will be what they are. But I got really fed up Friday with the negativity so took a deep breath and bought as much because I think the shorters talking the share down have limited capacity now other than frightening people. I've always been here for the long haul.

Flakey you say you have been invested just over two years. I must say I find it hard to reconcile your tone with that period. If you invested in 2016 you would have invested while the company was at serious risk of insolvency and the shaeprice alot lower. You then continued to hold through a 10 month period where the insolvency went through the courts. Are you sure you have been invested for just over 2 years or more like 1 year across 2017 and 2018?

I ask because had you held through that period I am amazed at your posting comments as the company is in a way better place than when you claimed to have first invested.

I added to my position on Friday and whilst we are clearly losing people who rode up from last year's rise the vast majority of the equity is being held and not traded.

Ud2 didnt make people rich quick but it is far from a duster from an exploration persoective. T45 and Dino will be close now and those are the results that will make it break the company not ud2.

The black line is the BOED for 2018 is under 50% of the 5000 increment so 2000 to 2500 boed. The difference is I read the blue as the well count you are reading it as the production which I think is the black line.....

SA - nice post. Whilst they may not want to perforate too large a part of section - the other reason they are doing smaller sections is that while they are stimulating a 3m section they are also going deep and out into the formation greater than the 3m look at page 15 of the presentation.

I will however point out that graph on page 11 follow the thick black line for the production volume and the light blue for the well count. If you do that production for 2018 is 1000 to 2000 bopd and well count 3 to 4 The scale is a bit wonky on the printed version I have in front of me from the meeting however.

So I think the plan is as described and the WHI estimates (page 12 to 14) are based on lower numbers per well. The January presentation from memory has a pumped and unpumped case for zones 9, 14 and 15 before the actual results of 300 to 450 bopd over 10 years.

However, what is interesting is how the economic model was amended after the 2 week post initial flow data point was taken for T45 upwards. No guarantee but if the numbers are sustained and come in reasonably close to those numbers then the wells will all perform well.

Sadly we are in this little period before the numbers can be hardened up.

Prod - you including UD2. T45 and Dino should now be stable enough to report. T39 obviously needs to wait a bit. So I would say only 2 are now falling due.

If they are good then the third result 6 to 8 weeks will confirm flows from a totally different zone.

T45 and Dino supports the numbers from the old CPR for taribani. T39 is in the main addressing information not included in the CPR's or WHI estimates.

Sentiment. At the moment the share price is being driven by fear. The obvious news that will change sentiment is the results from the two wells that they have held back. Alternately a very good funding package from someone like EBRD.

Once the fearful ones have departed, shorters have closed and the market makers have squeezed what they want it will reverse. Then the traders will buy back to try and repeat the cycle. that's how it works.

Without the extended flow test numbers fundamental investors and bankers will be unable to value the company. That is the missing piece at the moment I'm afraid and no one here can tell you the answer to that.

Let them finish all 4 wells and then judge where we sit. If at end of August 2018 we have managed YA debt down and paying from revenue and have 3 producing wells doing 300 bopd to 1000+ bopd in total we will be in a much better place than same point in 2017 when we had no funded program of work and $7.1m of YA debt to pay down and 150 bopd production.

TSBS - I'm sure Zaza and the team on the ground are disappointed as well. Success from 3 of the 4 wells in this campaign will be a major step forward for this company. The gas isn't going anywhere but when they go back to it I think the chances of success on that will be significantly higher as they know how to carefully drill and cement their own wells or sidetracks into the formation. Also when they do go back I think they would do so determined that it would succeed.

The comment was made on the field trip on 1st September 2017. So it's 1st september. By then Dino and T45 will have been released and half year results will be due. Even T39 would have been going for over 60 days and the first payment on Niko will be due.

Come back on 1st September and provide us with your analysis on that date.

Notice how the size of the interval perforated has increased for zone 19. They have done a 21 metre interval whereas they did a 4m/3m and 3m/3m at the other two wells. So they have tried a bit more volume in zone19 which perhaps explains why they have hit the associated gas probably deliberately at they would have known it was there from the drilling logs.

They also didn't work the very lowest part but came 60m up the well to hit the spot they selected but no doubt got the logging information.

Also after the numbers note the company anticipate that production could be SIGNIFICANTLY higher.

UD2 they have no choice really but to plug and cease what they are doing if they are not going to produce as it's a high pressure well now they havecperforated. Abandon seems a bit too strong. I would guess they intend to put a plug in around 2000 to 2500m and if they sidetrack do it from around 2000m. So it would not seem to be a difficult job once they are ready to try again.

The commentary around ud2 implies that while the stable flow was lower they were getting higher flows.

Extra drink about to be served and then I feel a revisit to the Niko archive coming on....

blackelv its interesting that they have stayed in this zone. Do you have a view on how they would go about working across the pressure differential between 15 and 19? There is clearly not just a pressure difference here but a totally different method required to work either side of zone 15 to process the hydro carbons.

But agree its an interesting problem to be facing.

5p - quick read for you on associated gas.

https://pgjonline.com/magazine/2010/september-2010-vol-237-no-9/features/gas-management-solutions-in-oil-production

Pyro they are initial natural flows same as what we got for T45 and Dino. But note they are for part of a single zone 19. They now have long term 9 year profile for zone 9, a 3 month profile on zone 14 and 15 and are just commencing the profile for zone 19. The wet gas will be interesting to see how that is handled and whether they monetise it or re-inject (they can't flare it). All this is vital for a CPR and they are most definitely testing each zone carefully to generate data to feed into the field commercial development plan.

Agree with Canny the issue I guess now with not commenting on Dino and T45 at this time is it no doubt will be interpreted as hiding further (bad) news. Those results are now of critical importance and will quickly now play on peoples nerves so it would not be a good idea to hold onto them for longer than is required.

On UD2 there was always the chance that over time the gas would find a way into the well bore even with the poor cement job. So should they have reported it earlier or was there a chance that over time it could have started to clean up and flow hence the wait? Would be a hard one given Zaza would have known how excited everyone was about the gas to call it too early without giving it a chance.

Given the dynamics today - volume was very modest indeed it shows to me there remains enough in the RNS to support the share at this level pending the most important news from Dino and T45.

Finally, to anyone I've been a bit short on today (Puddy and the Tombola fellow) apologies but the traders and shorters don't need to be helped on days like today. What I don't apologise to anyone about is being positive about my investment here and supporting the company. Anyone who doesn't like that filter me.

Prod - the estimate sin the plan for a gas well in the 36 well model for Mtsare is $5m not $25m a well!

If they sidetrack from say 2000m at either UD2 or one of the V# wells then the cost must be similar to the work done at taribani.

The real cost of the gas I suspect would not be the well but the rest of the infrastructure which also takes time. When the dust settles hopefully we will get some guidance on the next steps on the gas window campaign. But the oil window is progressing well and just needs the extended flow results to enable the economic models to be confirmed for the full field development.