The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Thank you to emptyend for this insight: "When the CPR is published, it will be useful to ask a few "what if" questions on the risking - and on the implications for adjacent prospects (and, indeed, the secondary objectives at Gemsbok) if a well were to come in. I understand that the nearest proven source is 100km away but, in a lightly-drilled area like this basin, that isn't too surprising. If you were to assume (for arguments sake) that source is present, the CoS would double to 24.6%. There is, of course, no evidence one way or the other right now......but if source is there then it would ALSO derisk other prospects in the vicinity.....so the source risk seems even more key for potential upside of the plays in the area than it is for the structure itself. Similarly, the other key risk is reservoir. Completely unknown at present until drilled....but carbonate reservoirs are important elsewhere in Africa so it seems a fair bet that reservoir quality would be good enough. Seal seems not to be a major risk, with good shale seals in other wells and neither does trap, because the structure looks very robust on the 2D (though 3D may show more complexity). So I'd say source is the main risk - but, if present, there could be really substantial upside, well beyond the volumetrics of the structure itself. And IIRC, there are seeps in the area, which at least suggest a source somewhere. As wildcats go, it seems to have very attractive upside characteristics."
So if the gentle, urbane Steve Staley, CEO of Upland, has stitched up Hugh good and proper when Hugh offloaded a slice of Wressle, then what hope do we have that Hugh won't get completely rogered backwards until he's black, blue and bleeding (and us with him) when farming out Corrib?
It was a bull trap by the look of it. It will get there - Gemsbok is too big to be ignored. GBP may now have to concede a bit more during the farmout than they would like, but they will still retain plenty of licence.
I'm here still and I've have seen a big fat juicy PAPER profit disappear very quickly :-( I wish I was good at trading, but I'm not. I hold because I'm confident that GBP with get a farmout for 3D and, subject to good 3D results, a carried drill on Gemsbok.
In this morning's RNS, the CEO says: "We are delighted that AGR TRACS has confirmed the high level of prospectivity...." and "....we now have the time and flexibility to find the right partner to progress further this exciting acreage." Also, the POS should go up with the 3D to, hopefully, a number that would make it worth drilling. With three or more big players already farming into Namibian acreage, I reckon GBP will get their 3D and, most likely, a drill. It may not happen this week, but it will be soon enough.
This paragraph is interesting: "Oil seeps seen on satellite close to the mapped prospects and work on source rock maturity based on the recent 2D seismic mapping has further reduced the play risk, and it is expected that the POS will increase further following the planned acquisition of 3D seismic data." Sounds to me like a farmout will happen soon enough.... "planned acquisition" eh?
A farmout is the objective here, but do we get (#1) an RNS for the CPR followed later on by an RNS for the farmout, or (#2) a single RNS for CPR & Farmout combined? We'd expect #1 but the wording of the RNS does perhaps allow #2. Maestro's "market sensitive news" points us to #1 but Oilspec's point steers us to #2.
From Tullow's lates Operations Statement: "Tullow plans to drill the Cormorant prospect on the PEL37 licence in Namibia in the second half of 2018 and preparations for drilling are under way. The prospect will target light oil and has a number of similarly-sized follow-up prospects in close proximity." Just thinking aloud here... Cormorant has a ~ 20% COS, so ideally Tullow needs another drill target in the Walvis basin but one that's not associated with Cormorant.... Gemsbok perhaps?
This is just speculation.... Tullow are bringing in a drillship in H2/18 for Cormorant in PEL0037 but no other targets have been announced...yet. It's unlikely Tullow would bring a drillship over to Namibia for just Cormorant. Tullow's campaign needs a large, high COS target.... something to improve the risk/reward for the whole campaign and to really get the basin/area going at last. Did Tullow nudge Global early last year? The timeline fits and shooting & processing 3D for a late H2 drill is still feasible.
2d seismic location: https://www.rns-pdf.londonstockexchange.com/rns/4590H_-2017-6-7.pdf Prospects on PEL0029: http://www.globalpetroleum.com.au/operations/namibia All of Gemsbok, the yellow prospect to the right in the operations map, was reshot with 2D whilst the large southern lobe of the central prospect was reshot. It's probably that the CPR could include figures for the central prospect as well as for Gemsbok. But just look at the size of Gemsbok....
I'm not sure that the 2D shows the oil seeps. Satellite imaging picks up oil on the sea surface: http://www.infoterra.es/products-globalseeps
Hi maestro We're probably debating luxury features here :-) Any farm-out to shoot 3D and drill a well will be great and we will then see a share price way north of 3p. I don't want to be in the position of Eco Atlantic shareholders where some feel that Eco mgt have sold 25% of Orinduik to Total for peanuts compared to that licence's prospects updip of Exxon's megafinds offshore Guyana. But I'm happy to debate this what % GBP manage to retain as it's a nice problem to have ;-)
pay for all? You mean for the FPSO and getting to production too? :-) That's the beauty of this play: - no planning committees (see Wressle In Lincolshire, UK) - no fractured basements to prove (see Hurricane's Lancaster, etc, offshore UK) - well understood subsalt (Petrobras drilling offshore Brazil) - deepwater? 1500m is quite workable nowadays / reasonable latitudes and reasonable seas - stable country, licence looks pretty safe, free from Nigeria Delta issues, etc - 200km2 structural feature - wow!