Member Info for OilAnalyst

Bamps21: re logging tools, there's no big difference other than hole size so wouldn't read anything into this. The Quad was run in 8.5" and the Platform Express in 12.25". Both had sonic included. The lost in hole charges would be similar.

I think we'll have to wait until the test results to draw any firm conclusions from this well. The mechanical instability (ie hole enlargement) in the lower section of the well will have been significant for logs to not have been possible. Given this and the sands being of modest porosity (from offset wells), cased hole logging will give only uncertain results for porosity and oil saturation. The main uncertainty of the Cruse was the producability, so I think we can assume it will now be tested no matter what the logs show.

88E is the only fully funded company with a potentially transformational drill definitely being drilled this year in Q1. Thereafter there is only UJO in Q2 (or Q3?) and a raft of companies that may or may not get funding.
This will get a lot more investor attention in the next leg up and run-up to the spud in Feb.

Have been accumulating here for a while and looks like the persistent seller may now have cleared. Currently, it's still trading below the last placing price. CLNR say they're making significant progress on the licences which Shell farmed into last year, and they're now working towards a firm well commitment on Selene and Pensacola. Shells' business plan for 2020 will now be final and funding here contingent on the review of the most recent re-processing - which should be imminent and the subject of the next updates from the company this quarter. Their farm out process on the Dewar prospect has generated significant interest and announcement of the completion of this could act as a catalyst also.

Greypanther: you may be right in that the gas was from the lower zone rather than preferentially produced from a higher gas zone. It still comes down to the same uncertainty that no oil (despite gas filled tubing) was reported to have been produced into the well bore and produced or circulated out.

dkok/fairview. Only left out words to keep within posting size. I thought it was obvious any test will go through a test unit; my point was that oil is planned to be burnt rather than trucked. Trucking would be normal for an "Extended" well test (EWT). hope clarifies. I am a LTH and continue to hold. My purpose in providing commentary is that it is only through these forums that shareholders can attempt to fill in the blanks when experience tells me that key information is being withheld.

ericnat17 does make a valid challenge. Given the Sound story investors cant ignore this.
I only recently invested in Echo and did so with the full knowledge of the JP/MF reputation. My reasons for doing so are as follows:
- Sound has been a disaster and JP/MF will need to rebuild their reputation to continue to make money.
- The issue with shareholders who have got in cheap or will control placings for future funds becomes a consideration when the S/P is high or the company needs funds. Neither are true with Echo. The SP is close to the low - under the last placing price - and Echo doesnt need funds.
- At this stage, all shareholders have completely aligned interests - to see the SP materially increase and reflect the underlying value of assets once the drill bit/testing has proven these upsides.
- The question of possible future placings and the JP/MF group selling shares only becomes an issue once the SP is materially higher. As to future funding, Echo has an advantage over Sound or Coro in that success case drilling & development is low cost and can largely be phased and funded from future cashflows. Or the business more readily sold, which is perhaps more likely.
- Obviously for an investor that came in at 20p, the above has been a major concern. However, on a look forward basis at 2p I dont see any reason why all existing shareholders will not be aligned in seeing a material re-rate to reflect actual results next year.
- Martin Hull is the CEO and JP and MF are non-execs. This is important as JP was the CEO at Sound.

An unusual RNS from UJO and I've held off from forming a view until now on the expectation that UJO or RBD would be doing some of the usual PR/interviews that might provide clarity. But none have followed.
My conclusion is that we are either not going to see any A2 testing until the immediate run up to the drilling, which is likely 6 months away (a 2 well program with testing needs 6 months prep), or if there is an earlier test on A2 it will be only a "proof of oil" test that brings oil to surface and wont be enough to produce a CPR that can report on oil reserves (as opposed to volumes of oil in place). In other words, UJO is playing the market long and news may be limited until the drilling results in Q3 '20. OK for LTHs but not what we're expecting.
Here's the key points:
1. Firstly, SP Angels' Sam Wahib (UJO is a house stock) let the cat out of the bag in the 12th Dec interview. See link ref minute 6-7. "...they will go straight from the A2 testing into the drilling next year..." https://www.proactiveinvestors.co.uk/companies/news/909122/sp-angel-s-sam-wahab-discusses-hurricane-energy-eco-atlantic-tullow-and-union-jack-oil-909122.html
2. Sam makes a wrong statement in saying "...the 3 partners in WN are fully funded". Humber has 16.6675% is not funded beyond the approved 2019 budget for the A2 EWT. Humber has a sales process ongoing for their interest but had intended the EWT to have completed first to at least prove the presence of oil. They do not have funds for the drilling in 2020 and so at this point can not approve the WN budget for 2020. They may well feel aggrieved that the approved test was suspended to allow UJO/RBD to fund raise. Its possible that a proof of oil test will be done and this facilitates a funding of Humber's equity. It also seems unlikely that RBD/UJO will rely on the JOA default provisions as they would find it hard to go back and raise funds again for the same program. Until this is resolved, the budget for 2020 cant be approved and long lead items purchased. This means delay.
3. The RNS says very little about the A2 testing plan or timing: "...The well will be pumped to recover load fluid, directing all recovery through ...the incinerator". This wording implies it is not an EWT, but a short test to bring oil to surface. There is nothing on timing (notwithstanding planning). It is out of character for UJO to not provide detail and expected timing and so we must conclude it is deliberately vague.
4. A concern for the WN joint venture will be that the oil zone has been perforated together with the gas zone and yet the initial test was only reported to have produced some gas. Anyone who knows about well testing will know you always start testing from the bottom of the well and work up. Any new test will need to isolate the gas interval and try and clean up the oil zone where previously it did not flow to surface. This is possible with a pump but is uncertain.
I'm a LTH and invested around the last 3 placings

Good RNS. Nothing not to like here: low risk, up dip of a discovery, an "effective carry" on costs by Phoenix, and the Springhill is a very well know reservoir in the area with material volumes to Echo in the success case.
This stock is still very much below the radar because of its past but on a forward looking basis has got very material upside and limited downside. Success here on on top of the recent encouraging log results on TA should get the company back on the radar.

In my opinion, a takeover is the cleanest way that the administrators can "achieve the best outcome...in a reasonable timeframe" and I think that will be what they're trying for.
I have nothing to back this up other than analysis of the SH register, LOG position and administrator's pronouncements.

In order to start a swabbing operation they would have had the necessary equipment and tankage to carry out a test on site ie hourly measurements of oil and water with flaring of gas.

Its what the RNS doesnt say that is interesting. "Following a short period of swabbing, WR-38Z is flowing naturally." Firstly, 6.5 weeks is not a short period and secondly, it does not say flowing OIL. A well of this design should take no more than a week to clean up by swabbing (less if coiled tubing were available which it seems it was not). There are a number of possible reasons why it would take so long; (i) there were significant operation problems, but would seem to be inconsistent with "operations at WR-38Z continue to proceed smoothly"; (ii) the well was severely damaged during drilling due to large scale mud losses (at a reasonably swabbing rate of 500-1000bpd this would be a huge quantity of mud to be removed that would warrant comment during the drilling ; or (iii) the well connects very poorly with the reservoir and is not productive, perhaps due to limited open fractures, and the swabbing rate has been insufficient to lift the mud out of the well in a timely fashion. Whatever the real reason, shareholders are not being told and it would now seem wont be until the news of the next well spud is made.
I am not invested but have been following closely on the hope of seeing an investment case.

If CalEnergy had declined their - now expired - option on Harvey, IOG would have to have put out a RNS by now. So it would seem there is at least constructive discussions ongoing. Since fully funded, there's a clear situation here where the fundamental value is significantly in excess of the current share price but, given 1st gas is a long way off, the market is overlooking this. However, what appears most interesting is the wording of the recent LOG administrators statement; "our advice is that the share price is currently at a significant discount to IOG's estimated net asset value". Given strict fiduciary duties, it would be normal for administrators to accept the market price without question. Also significant here is the statement "achieve the best outcome...in a reasonable timeframe" so they're not going to take a long time over it. Their intentions would seem to be pretty clear...

Tight hole means that all those involved in the well are bound by strict confidentiality and any information release is controlled by the operator - which has just happened.

An interesting RNS from CERP. The tertiary target - which would have been drilled weeks ago - is reported to have had HC shows but was either not logged or the log results are not reported (more likely as it is a target zone). The RNS states that it has been cased to allow testing but only on a successful completion of the well. This suggests that it would not in itself justify completing the well for. The secondary target - which would also have been drilled some time ago - is reported as having oil shows but was also not logged or the log results are not reported (more likely as is a target zone). The reference to high pressures seems to relate to well bore instability and perhaps difficulties with the drilling operation. Reference is made to operational learnings. Drilling is reported to now be in the final section, but no reference to depth is provided. Given the well was expected to be a 30-45day well, which would imply TD this week to early next week, one is left wondering why the log results were not reported and/or why this RNS was released?

The key pre-drill risk is whether these sands will flow commercially. The Gas readings show 14.9% gas over 10m of potential pay in the Lobe G, 7.2-8% gas over 39m of potential pay in the Lobe C , and 100% gas over 8m of potential pay in the Anita. 100% gas means that the operator was circulating out 100% gas in the mud corresponding to the depth of the Anita sands. This would imply the gas flowed into the well and is supported by the reported 30% over pressure (it is not reported as such but it reads as though the operator took a "gas kick"). Overall these gas readings over a total of 57m seem sufficiently high to represent possible gas pay but we wont know until the testing confirms this. Barring an operational problem with testing, we can expect the Anita to flow given it has already; the question is at what rate.

So, do these figures for the success case on the current well sound about right to you?
19% of Lobe C prospect equates to net 58bcf mean resource (115 bcf upside). Ref GCA CPR valuation is approx US$1/bcf NPV10 here, giving approx 6p/sh on the mean success and double this on the upside case.
Whether the S/P responds would seem to be in part down to what Lombard and Phoenix do with their options (no lock up?) and shares (lock up to 21/02/2020) respectively, and, as you say, whether the company commences marketing...
Comments welcome

Samra: thanks. So no changes after the 3D being reported to the CPR figures on volume and COS.

Has anyone managed to get a chance of success of the current well from management?