Member Info for noix

Most people appear to be putting a value of $10 per barrel in the ground giving £345 m @ $/£ 1.30.
JOG in their last presentation gave a maximum production cost of $35 a barrel leaving $35 a barrel for us at current oil price. That converts into just under £27 a barrel @ $/£ 1.30.

And I've just looked back at the trades at both of those times and both of them were executed over the offer price at the time. It does look as if they were buys.

As we know the giant Buzzard field reservoirs are analogous to both Verbier and Cortina. A previous head geologist at Nexen was Graham Dore, who can really take the credit for getting them to drill it in the first place, such was the complexity of the geology. And of course the technologies then were not as advanced as they are today.
Mr Dore says this about the Buzzard discovery:

The field, in fact, is a stratigraphic pinchout with the pinchout toward the sand source, which is unusual for the Jurassic for the North Sea."

"Another unusual thing, it was drilled within a graben within a low rather than a traditional Jurassic trap drilled on a structural high," Doré said, "which is the norm for the most part."

I recall someone saying either here or on the other board last Wednesday, that perhaps it has faulted down. Perhaps, as in the case of Buzzard, this part of the discovery lies in a Graben and they simply have not gone deep enough ?
I'd have thought that would have shown clearly on the seismic but stranger things etc.

As it's a fair way back in the thread, I'll post it again:

"The Verbier gross recoverable oil resources are estimated to range between 25 and 130MMboe. This wide range in resources reflects the uncertainty in the reservoir mapping, the nature of the sandstone geobodies and particularly the net-to-gross and the resultant net pay. Verbier was mapped and drilled on conventional seismic and therefore Equinor decided to shoot new Broadband 3D data (contractor PGS) across Verbier. The new broadband seismic was needed to interpret the basin infill of the Upper Jurassic: more accurate identification of sequence boundaries and the recognition and mapping of individual sandstone reservoir geobodies, variably bounded by potential intra reservoir mudstone units that act as dynamic barriers, as was found in the case of Buzzard. (Buzzard and Verbier, PESGB). This helped to mitigate reservoir presence risk in Verbier. In turn it allowed a more accurate STOOIP and Reserves estimate and it was used to choose the optimal location for the appraisal well."

As I originally asked you and this equally applies to anyone else, can you throw any light on the "intra reservoir mudstone units that act as dynamic barriers" ? I'm no geologist but my line of thinking is could we have hit one such unit and it's void of sands or is that a none starter.

I'm amazed that you have even contemplated the possibility of Equinor abandoning their investment in the area. I'm not even sure contractually they could walk away, both in terms of their commitment to the partners and the OGA. They recently made a discovery in the Norwegian Sea at Ragnfrid North of between 6-25 mmboe and that is going to be tied into the Kristin platform 20 kms away. It also forms part of their Norwegian Sea strategy to prove up these smaller reserves, using existing infrastructure to keep development costs low. The same strategy they have declared for the UKCS.
And on the subject of costs going forward, JOG's contribution on any similar drills to Verbier would be in the region of £3-4m, so I don't believe we have any problems on that score. They paid under £1 million for the discovery sidetrack. So it's not unreasonable to deduce that they have enough cash for a sidetrack, an appraisal well and an exploration well, plus a fair slice of G & A.
And let me put this theory to you re the amount of oil initially discovered at Verbier. If the appraisal well has indeed not found oil, then I would have expected the Company to announce that the discovery rests at 25 mmbo in the immediate vicinity of the well bore. The fact that they haven't, logically suggests to me that there is a good possibility that it is higher. Time will tell.
With respect, if you have that little faith in the partners and the project, you are better off on the sidelines.
GL

Do you honestly believe Equinor are the sort of outfit who pack up their bags and scuttle away based upon one disappointment, following on from a confirmed commercial (in JOG's opinion) oil discovery. They have just spent millions on state of the art broadband 3D seismic. This enormous setback for us private investors is but a little tremor for Equinor. Their whole policy in the UKCS is to extract maximum remaining reserves, estimated to be in the billions and the OGA itself, estimates 300 mmbo of resource to be up for grabs in the 31st SLR.
And you do not know the commercially recoverable quantity for the Verbier discovery. The rns said that it is "likely" to be revised towards the 25 mmbo figure. That to my mind opens up the possibility that it is more than 25 mmbo. There's a lot of area on the discovery map north of the sidetrack discovery well. About 4-5 kms to be precise. That's over twice the distance of the appraisal well step out to the NW. Only time will tell where we are at exactly but it's a ridiculous to write the project off, given the readily verifiable hard facts to hand and given this paragraph in the rns:

"The appraisal well results will be fully integrated with the final processed data from the 3D seismic survey acquired in 2018 in order to evaluate the upside potential for further Verbier appraisal activity. A large part of the mapped area of the Verbier discovery, located to the north west of the 20/05b-14 well location remains untested. Additional resource potential, which was not tested with this well or the discovery well, has also been identified in a deeper horizon beneath the Verbier discovery. This, along with the Cortina prospect, will be matured with the new seismic data and be considered for future drilling. "

JAS78 The Upper Jurassic sands were not dry, they weren't there. They are currently investigating why and will take action accordingly. If it warrants a side track, they will side track. If not, they will formulate the next plan of action for another day. That's simply how it works in O&G.

How do you read this in relation to the appraisal drill result:

"The Verbier gross recoverable oil resources are estimated to range between 25 and 130MMboe. This wide range in resources reflects the uncertainty in the reservoir mapping, the nature of the sandstone geobodies and particularly the net-to-gross and the resultant net pay. Verbier was mapped and drilled on conventional seismic and therefore Equinor decided to shoot new Broadband 3D data (contractor PGS) across Verbier. The new broadband seismic was needed to interpret the basin infill of the Upper Jurassic: more accurate identification of sequence boundaries and the recognition and mapping of individual sandstone reservoir geobodies, variably bounded by potential intra reservoir mudstone units that act as dynamic barriers, as was found in the case of Buzzard. (Buzzard and Verbier, PESGB). This helped to mitigate reservoir presence risk in Verbier. In turn it allowed a more accurate STOOIP and Reserves estimate and it was used to choose the optimal location for the appraisal well."

I'm particularly interested on your thoughts on the intra reservoir mudstone units.

One other point:
"A lot depends on rig schedule "
We already know that the results were possibly going to be released anytime up to mid Qtr 2 or mid May, some 72 days after spud. We also know that a possible sidetrack was in the plans and we also know that latest news was that Equinor had West Phoenix booked for much of the rest of this year and in between times she is available to all comers.
So I don't believe the rig schedule is an issue.

My, your stance has changed somewhat from your post at 9.37am:

"Equinor are the industry experts and would have taken the lead on the exploration . Let’s pray and hope that they have missed the sweet spot and do another drill as it would be cheaper to carry on than re schedule as I would hope that the rig cost would be chesper . A lot depends on rig schedule . They must be close as one would hope why would you spend a fortune on siesmic studies when it didn’t pick up Jurassic sands ?. I would also guess that they would have been in a similar situation before and would know what the next course of action would be . Equinor are a serious outfit, one of the reasons why a lot of investors invested in Jog as they would think that Equinor don’t partnership with
anyone .Time will tell patience is key , I wouldn’t sell until we get solid news on way forward as it is early days . Good luck to all patient holders ! "

So what's changed your opinion in a little under 8 hours, or are you not allowed to say :)

I'm not splitting hairs but you do appear to have contradicted yourself with that post.
You state that it will be a plug and move on scenario with the rig costing £200K a day and then state that JOG and Equinor will study the data and see where we go from here. You may well be correct about no further action at this stage but based upon precedent in 2017, you have things round the wrong way.
Equinor and Jog will look at the data and then decide what do do. This took 7 days in 2017 and resulted in a sidetrack and discovery.
I'd keep all possibilities open at this stage, until we hear to the contrary. They deviated to TD by circa 500 metres last time and they can do the same this time round if the evidence supports it.

Apologies for the late reply.
No I'm not a geologist but in my extensive research on Verbier I had the opportunity to communicate with Dean Gagnon, the lead geologist at Buzzard. That came about, in a round about way, from the lecture he gave at the PESGB.
This is an excerpt that he sent to me from an e mail:
" The Buzzard Field comprises stacked Upper Jurassic turbidite reservoirs with its reservoir quality sand sourced from the Scottish Mainland and transported eastward across the Grampian Spur into the Ettrick Sub Basin. These reservoir sands are texturally sub-mature and are postulated to have been recycled in a shallow marine, shelfal area acting as the source area for sand-rich gravity-driven turbidity flows."
As I said previously, these turbidite reservoirs have complex geology, clearly beyond your understanding, so I'd be careful with the other questions you plan to ask. You might make yourself look equally silly and presumptuous again.

These turbidite reservoirs have very complex geology. Our hope is that they were very unlucky and put the drill bit into a small faulted enclosure within the main structure, they were aiming for. They have obviously got much more information than we have. Where the sands and oil have migrated from tells them a hell of a lot. They didn't head NW from the discovery on a whim.

Yup, as in 2017, they will be studying all the "preliminary" data to see where it went wrong and if viable will presumably try to remedy the situation with the rig on location. It would certainly be the most cost effective route if the data stacks up.

that nobody has made reference to the word "preliminary" in the rns.
"Based on preliminary observations during drilling, the well did not encounter Upper Jurassic sands as anticipated."
Seems a very strange comment to me. Are we re visiting 2017 ?

I was not accusing you of mis leading investors and apologies if you took my comment the wrong way.
My point is that if comments are made as facts they should have supporting qualified evidence. In your case I would suggest something along the lines of "the company advised me via e mail that there is no DST planned. Then it becomes verifiable hard fact.
To my mind anything posted on a bulletin board without a verifiable source as fact, is simply an opinion.
Nous or noix, I'm often called much worse than that :)

Then supply the factual evidence.

to correct some of the assumptions being made and presented as facts, which could have the affect of misleading investors.
Cebo-456, you have continually stated that no DST is taking place on 20/5b-14 but that is not a fact and goes contrary to the indicative work progamme that JOG released in this presentation (P11) immediately after the discovery at 20/5b-13z :
https://www.jerseyoilandgas.com/wp-content/uploads/2018/01/master_investor_presentation_18-10-17_public_final_1_.pdf
If Verbier was a single reservoir then a DST possibly wouldn't be required but it is analogous with Buzzard a compartmentalised reservoir. There is a credible theory, that has been put forward elsewhere, suggesting that Verbier also consists of panels and the discovery was made in the eastern panel. The current appraisal is being undertaken 2 kms to the west of 20/5b/13z and the theory is that they are testing the central panel, the larger of the three. The fact that JOG mentioned the possibility of a DST in the appraisal programme supports this hypothesis.
The dates have obviously slipped (they normally do) but the possibility of a DST is definitely on the agenda.
JOG also have a very strong technical team, who bring much to the party. I see no reason why they should sell any of their stake in P2170. Historically, there have been plenty of junior partners in sizeable oil discoveries and indeed the OGA is encouraging the marriage of majors and minors to totally exploit the remaining North Sea reserves, which still number in the double figure billions.

I actually thought that you were one of the more sensible individuals on here.
I think in future I'll stick to the other board, rather than waste my time on certain individuals on here.
GLNA

The bit at the end is quite important:)
Mr Benitz closed with this statement:
"The Company has the opportunity to grow its resource base, in and around the area, quite significantly in the next 12 months and we have the money to do it."

Thought it might be useful to do a precis of the Malcy/Andrew Benitz interview, which pro has kindly put on the board.
Verbier oil discovery in October 2017 within a range of 25-130 MMbo, 25 MMbo being the minimum proven volume.
1st appraisal well to define the range sited 2kms to the NW of the discovery and described as a relatively conservative distance.
On success,to fully define resource, further appraisal wells would be required with the next one probably early next year.
25 MMbo is commercially viable.
They already have three 3D data sets over the licence area. The new state of the art imaging has been specifically optimised to better define the Upper Jurassic reservoir, where the discovery was made.
The new survey goes beyond the licence area, demonstrating that they are thinking on an area wide basis to create a new NS hub. This is in synch with the OGA policy.
Equinor and JOG doing the initial interpretation of the fast track data, which is more about planning of the next steps and better defining other prospects, including Cortina, which has the potential to be as big, or even bigger than Verbier.
There's also additional prospectivity on the licence, which they are in the process of identifying.
The final processed data set is due at the end of Qtr 2 .
Equinor and CIECO are great partners and the working relationship is excellent.
Cagey about the 31st Greater Buchan area licensing round (wouldn't say yes or no)but made the point that Verbier "is slap bang in the middle. It's on our radar."
Still looking to acquire production assets and have been out bid on a few.Sensitive to equity dilution. Good cash flow and production assets, which could help with the future financing of the development of Verbier, will be closely looked at.
Capex to year end £7-10m and JOG had £22m cash in the interims. Conceivably the money could last well into next year.
Beyond that there will be capital requirements but there are multiple ways to solve that problem.
To the question "Presumably you wouldn't want to sell down any of Verbier. 18% is a very big stake." The reply "Absolutely not.It's a material percentage of potentially a world class asset."
The share price is currently factoring in the bare minimum on Verbier and not very much else. There is significant upside potential. The house broker is quoting £10 unrisked but that's just for Verbier.
They are very disciplined on G&A with a team of only 12, which is technically top heavy. Martin David (Geologist) has 40 years experience, as has Ron Lansdell (Geophysicist). They have just brought in a Geo Scientist for seismic work and have an in house Facilities Engineer for the topside development work planning.
The 12-18 month catalysts are:
1/ The appraisal programme.
2/ 3D seismic interpretation.
3/ Licensing round - that inadvertently answered the earlier question - are you bidding :)
4/ 2020 programme before the end of this year.
Mr Benitz closed with this statement:
"The Company ha