The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Here's an interesting paper on P&A well process in 10 different US states. It's very detailed and makes for interesting reading if you want to understand the process and it's not too technical. https://www.npc.org/Prudent_Development-Topic_Papers/2-25_Well_Plugging_and_Abandonment_Paper.pdf
I and I’m sure many others invested in JOG because the risk was somewhat mitigated as they already found oil with at least proven bottom end of 25mmbol. Of course, we were all hoping for a higher figure and that’s what the appraisal well set out to do, prove the higher figure. So as a simple analogy, it’s a bit like backing a horse, your confident it will win, but just in case, you bet EW, because if it comes third your get your money back, if not more. OK, our horse has come in third, not out of the placings but third, think about it?
Excellent summary Sir and my thoughts exactly. The 3D would have indicated the sequence they were expecting, i.e. upper Jurassic, but what they were seeing was not what they found. I'm a geologist, but not a petroleum geologist, so interpreting 3D seismic surveys is not in my résumé. I'm sure they have spent the last week, analysing the data to work out what to do next, hopefully a side-track.
noix, I see you have got this info from PESGB. I just joined as I thought it might help me better understand some of the geology around the Verbier license. It's a complex area and more appraisal wells will have to be drilled before we know the full STOOIP value of this reservoir.
Just got my monthly copy of PESGB. I see Equinor have not had a lot of luck with their last 3 West Phoenix drills, with PIP, Bigfoot and now Verbier all coming up dry. Bigfoot was a abandoned after only 19 days. Maybe the rigs jinxed!. Alas, I will continue to hold JOG
What I don’t understand is how they could miss these Jurassic sands as they were using the new 3D data and there is a wealth of experience on these teams, not just JOG, but also Equinor. I’m sure there have been some heavy meetings in the last few days and a lot of head scratching going on trying to figure out where they went wrong with this “optimal location for the appraisal well”. Just goes to show, even with the latest technology at hand, when you drilling to depths of over 12,000ft nothing is certain.
What I really like to see is a Monday RNS stating either plugged, drilling deeper, or a side track. We need this so the share price has some sort of direction, as the information they gave out on Wednesday was abysmal and lacking in a lot of detail. This has resulted in all the speculation going on at the moment on social media and other sites.
A faulted graben seems like a credible answer; however, I am SURPRISED (there’s that word again) that this did not sure up on the seismic survey, but I’m not a seismic expert. Sedimentary strata show up as different horizons as they drill down, so I guess they were looking for the same horizons as the 1st drill, but the important Jurassic sands just did not show. Either they had run out or were faulted down.
However, without seeing the data all this is just pure guess work. I suppose the only positive is, the Jurassic sands did not show, not the sands were devoid of oil and they did mention something interesting lower down the sequence. I would love to see that data so I could get some answers, however even though I have a BSc and MSc in Geosciences, I must admit I only have limited knowledge of Petroleum geology.
This is my first and only post today. OK, today's news is very disappointing to say the least. I and i'm sure a few others wrongly believed the downside risk was small, but that's the OIL business I suppose, there is always a risk until you start pumping the stuff out of the ground. A lot of people including myself have lost a lot of money today and it doesn't help when the small minority gloat at other peoples misery. Those that do this can't be very nice human beings and I feel more sorry for them than the people who have lost money.
There was no mention in the RNS about plugging the well or a sidetrack. So i'm guessing in the next day or so, once all the partners have met, they will decide the next steps, so I expect another RNS very soon, saying either plugged or a sidetrack. As this well well was only 2km from the first well, they can't be too far away from the oil bearing sands. What is also interesting is they only went to the same depth as the first well, so if the sands are faulted down, which is why they missed them they may decide to go deeper. Who's knows, I'm sure we will find out in the next few days. Over and OUT!
Grewber - page 11 and 14. Appraise & De?ne - Mid 2018 Verbier Appraisal well and Drill Stem Test commenceshttps://www.jerseyoilandgas.com/wp-content/uploads/2018/01/master_investor_presentation_18-10-17_public_final_1_.pdf
The 2018 investors presentation clearly states the appraisal will also include a Drill Stem Test (DST). Setting this up will take time as they have to get to TBD, so they can seal it off top and bottom of the pay zone before the pressure tests can start. The process involves replacing the drill bit with a DST assembly. I think the TD is around 4,267m, so thats a lot of pipe to retrieve and then put back down. The initial well in 2017 took about 30 days from spud to announcing water and they used a wireline log, which I think is quicker than a DST. If they side track add another 30 days. So this all takes time, so patience everybody, all will come good to he that waits!
If it was an exploration well then they would have to inform the market as soon as they found oil, but being an appraisal well I guess they don't, but any good news will leak out in the form a share spike. Depends how tight they are on keeping the data secure.
This seems to have slipped under the radar.
The headline:
Buzzard, classified as a Giant oilfield, was discovered in 2001 by well 20/06-3Z (OWC). It took until 4q2017, a further 16 years, before Verbier was discovered 20/5b-13Z. How large will the Verbier discovery become?
On the 2th October 2018 at the London headquarters of the Petroleum Exploration Society of Great Britain (PESGB) an interesting lecture was given on the Buzzard and adjacent Verbier oil fields. The Buzzard field was proven in 2003 and came in production in 2007. As of 2017 the Buzzard field was estimated to contain 1,500 MMbbl of oil, later classified as a GIANT field and by mid-2018 over 685 MMbbl of oil had been produced.
Buzzard is located in the ‘Ettrick’ sub-basin, Verbier is located 55 Km to the east northeast in the ‘North Buchan Trough’. The two sub basins are separated by a structural high of upstanding Caledonian basement and possible Devonian syn-rift with the Scotney High to the immediate south of Verbier.
The geology is a bit difficult to understand even for me and I have a BSc and MSc in Geosciences, but the bottom line is, as they continue to sink new wells in the Buzzard field to stave off the decline in production of the original wells they are getting closer and closer to the area where the Verbier discovery lies. So, I don’t need to tell you, the Verbier discovery so far could just be the tip of a very large oily iceberg. Here is a link to the PESGB site. Check it out for yourself.
https://www.pesgb.org.uk/news/buzzard-and-verbier/