Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
So for reference, TE6 has 89m gross and 28m net payzone. Classed as highly potential. So I’d say that 10.5m (conservative) is looking promising.
The key here is the potential size of the target by comparison terms with TE6 - let’s see how it unfolds, but so far, not a bad start. We wanted gas, and now we have it. The next question is how much.
Ok, so not in 2018, but a heavy lacing of Jan will be the month when we seek the second contract revealed, and possibly Iran back on as well.
Can’t see why they would point to Jan on both, and a trading update unless things really are close on both and there is something tangible or tell.
Blimey, you couldn’t make it up - forged? Really.
SOU have made it public, and have specifically taken questions on it. Why would anyone in their right mind do such a thing. OGIF would call them out immediately.
I think a few are missing the point, that OGIF stand to gain themselves by stabilising and increasing the SP - that’s why they issued it.
Some of these are valid questions, but the whole story being built here around Moroccan govt confidence is presently without any foundation that I can see, and is starting to smell like a concerted effort to talk us down further.
I recall a recent specific question to J.P. around this issue, which received an unequivocal response of “never more aligned” or words to that effect.
I’m all for constructive discussion, but some of what is appearing here now is stepping into concocting every doomsday scenario possible. None of us is inside the company and therefore, the best we can do is second guess, which is largely unhelpful.
Let’s just ask sensible questions of the BOD and go from there. But trying to add 2 & 3 and making it 73, isn’t helpful to anyone.
That was referenced in the last FSC. I followed up in an email to check and ask why and was told that they got good Paleo data from TE9 so don’t need to do it again at 10. Worth remembering that Paleo at 9 and 10 were always secondary targets and never had a COS ascribed to them - therefore my take is that they were about data acquisition primarily and possibly to help with location and well design for TE11.
Agreed SO - SOU is ultimately worth what a buyer is willing to pay. That may or may not be reflective of the SP, and there’s only one way to find out.
Eric - your point about the TAGI being unreliable is a key one. But to discount a proven discovery on this basis is a little illogical.
What is perhaps more interesting to ponder is how that unreliability may play out in any sale of the asset. The asset after all is much much bigger than the TE5 Horst and is proven to have gas. The question of course is how much of that can be got out. We simply don’t know at this stage and will never drill enough holes to be clear on that.
But a buyer of course may have a very different view of this and thats the risk that they take. But with a field the size of Belgium, and gas appearing all over the place but often in tight rock, the odds of the TE5 Horst being the only viable producing zone seems very very slim to me.
So how much is that worth to a buyer? We’ll find out in due course.
There are lots of frankly crazy suggestions around at present around value of the asset. So it’s always useful to see well reasoned logic SO.
I accept of course that some have other motives and may not accept logic and reason. Value will out in the end.
Well the positive is that Predator think there’s gas there and given the Fastnet connection, an interesting long term conviction in Morocco it seems.
The uncertainty is why didn’t we or another major take the licence? Not sure we can read too much into that as there could be a number of very good reasons - I.e. existing licences look better, potential of gas pools looks much smaller, or we simply don’t need it etc.
SOU still have plenty to do in Tendrara alone, so no big issue in my mind, as it would simply have become another distraction. There is work to do in Tendrara and I’d prefer they focus on that. We have a significant gas discovery that is heading for GSA and infrastructure, so let’s get that sorted and focus on the next two wells, either of which could turn sentiment significantly on success.
And before anyone suggests that the TE5 Horst discovery isn’t significant, just remember that this alone equates to supplying the entire UK for over a month even after factoring in recovery rates. I’d say thats a pretty significant asset and I very much doubt it’s the last gas that we’ll be finding.
There is a strategy here, it’s still being delivered, and we still have options to play with. Let’s start focusing on the upside, because there most definitely is one, particularly from 15p.
Partridge, that not what the RNS said:
“Interpretation of the wireline logs has not established the presence of producible gas, and hence the well will be plugged and abandoned, and not tested.
The well encountered 60m of dolomitized silty sandstone, interpreted as an age equivalent to the primary target TAGI sandstone. The petrophysical analysis of the wireline data indicates the interval is of low porosity and therefore poor reservoir quality.
The well also encountered approximately 630m of a Westphalian aged succession of fine sandstones siltstones and mudstones. The petrophysical analysis of the wireline data indicates the interval is again of low porosity and therefore poor reservoir quality. However, the core of the secondary Paleozoic seismic target remains untested as TE-9 appears to have been on the downdip limit of the large Paleozoic closure.
Drill gas readings in both the TAGI and Paleozoic intervals showed a range of C1 to C5 hydrocarbons, which the Company believes is further evidence of a working petroleum system. All data from the well are subject to ongoing analysis, which also includes other rock and drill gas samples recovered during operations, that will provide further valuable data to derisk the prospectivity of the wider permit area.”
So in summary, the issue is porosity and producible gas - not whether there is gas. How else would the drill has readings have registered C1 to C5 hydrocarbons? And they explicitly say low porosity rock.
I’m with you there Jimmybob.
No one wanted to see a duster, and particularly not on TE9 - and I include the BOD and SOU team in that. But the chances of all three drills being a success was always remote and the BOD have been clear on that throughout.
The comments by some on seismic also appear unfounded. Had a chat with an O&G geologist yesterday to get his views. Bottom line is this, Western Geo are good at what the do, but no matter how good your analysis is, the only way to determine porosity is with the drill bit. We’ve been unlucky on tha count and very little could have been done to negate that outcome. It looked good enough to drill on seismic, but porosity is the key issue which needs to be determined - via drill.
I’ve also asked JP about the impact on the 5 analogous Tagi prospects, as a consequence of the TE9 outcome. Bottom line, the seismic holds true on these and they remains prospects - only the drill but will validate with certainty, albeit we have never planned to drill these. They therefore remain viable targets for a potential buyer.
The key issue is that the geology is known to be tighter than Algeria, but it’s also known to contain gas. We’ve proved that and also that even higher areas can flow at commercial rates, particularly with TE7 where horizontal and stimulation was tested to validate the principle.
So whilst TE9 was viable, we have yet more data, and also very valuable data on the Paleo zone. And two more different plays yet to drill. It’s far from a dead end, albeit I concede it’s dented morale.