Member Info for pauldrayton

Tony Durrant says they are in the top of the Zama reservoir at the moment so news on that due shortly.

Probably next week I'd have thought.

Welcome and good luck Nick. It's all down to the Board now - the prospects look fantastic so it all depends on what funding deal they can get.

All the best.

Conclusions on Serenity: The Serenity prospect is unusual to the extent that it is
supported by a wealth of cross disciplinary data vs. the typical geological approach. In our opinion, drilling the prospect is more likely than not to result in a success which is exceptionally attractive for a prospect containing circa 69 million barrels of recoverable oil.

Context: We believe that i3 Energy continues to be at the forefront of unlocking a regional geological model in its area of operation. Since WHI first assessed the regional model, the key developments relate to i) Serenity (as discussed); ii) the creation of a regional reservoir model inclusive of pressure dynamics; and iii) the construction of paleomaps to better understand the geography and geology at critical points in geological time. The geological model of the region showing Captain Sands structures above the 5,270’ contour interval is shown below.

Regional Reservoir Model: i3 Energy has created a detailed reservoir model showing the evolution of pressures in the Captain Sands regionally to reflect production and injection of fluids at the relevant fields. This model accurately matches well pressure data in the region over a period of circa 20 years. This model also determined that the 40 psi adjustment made to Tain’s pressure data supports an oil water contact estimate of 5,270’.

Paleomodels: i3 Energy has created paleomaps tracking the geological history of the
region. Most importantly for the prospectivity of Serenity and the Liberator Extension, during the most relevant geological times (Mio-Pliocene; 23 to 2 million years ago) the region’s dip orientation to the South was steeper. This would have encouraged oil migration from the Blake field (where oil is known to have been present) to the North and in particular towards the Serenity and Liberator Extension prospects. By implication, even if the current structural
maps are modestly inaccurate (and there is no oil communication between the relevant fields as i3 Energy has modelled) oil should have filled Serenity and the Liberator Extension during the Mio-Pliocene.

Serenity/Tain Depositional Model: Tain and Serenity are thought to have been deposited from the same turbidity systems although Tain being on the flank of the Captain canyon and situated on a higher terrace has considerably thinner sands (bright yellow in the image below - Figure 3) than those of Serenity (faded yellow in the image - Figure 3). Communication between Serenity and Tain is expected to improve to the West where the depositional geography was less truncated between Serenity and the Tain terrace. For reference, the geological model was similar at the Blake field and that field’s most productive wells produced from within the main paleo canyon.

Serenity amplitude anomaly: There is a strong amplitude anomaly at the Rodby / Captain Sands interface which is interpreted to be an oil-water contact. The anomaly conforms to the 5,270’ contour interval, which is also the oil-water contact of the Blake and Liberator fields. This corroborates i3 Energy’s regional geological model and other data specific to the Tain discovery. The anomaly does not occur over Tain due to the relative thinness of Tain’s sands.

Blake: i3 Energy’s analysis of the Blake field indicates that the field’s oil water contact of 5,270’ does not correspond with a structural closure specific to the Blake field which implies that oil is being trapped to that depth by a closure that is outwith the Blake field. This increases the prospectivity of Serenity by indicating that oil in the Blake field may be in direct fluid contact with oil from the Serenity prospect and the Liberator discovery.

Risks: We believe that there is excellent control over the Serenity prospect due to the high quality and breadth of data used to assess its prospectivity. We believe that this has essentially reduced risk to i) reservoir quality parameters, which will remain unknown until drilled although Captain Sands are systematically of a high quality in the region; ii) the structural image of the Serenity prospect may be different than modelled due to time / depth conversions required to create structural models from seismic data; and iii) migration / breach risks which would require some misfortune (including no connection to the Blake field occurring above 5,270’ combined with an error in the determination of the oil water contact at 5,270’ from Tain’s pressure data). On balance, we perceive that Serenity is an exceptionally high quality exploration prospect in terms of its chances of success.

Background: i3 Energy was awarded Block 13/23c, which contains the Serenity Prospect (and the bulk of the Liberator Extension) on 23 May 2018 through the 30th Offshore Licensing Round.

Tain Discovery: Based on the public disclosure of RockRose Energy, a 50% interest holder in the Tain discovery, the resource is expected to produce 13.4 million barrels of oil (gross). All four wells drilled through the Tain reservoir encountered light (32° API) oil and none encountered an oil water contact. The well locations that penetrated the Tain oil discovery are visible on the map below (Figure 2). The western most well had the lowest pressure which conforms to the reservoir and aquifer simulation model built by i3 Energy to reflect depletion from the Captain Field, which is located to the northwest. By extension of this
analysis, Tain and Serenity are expected to be in pressure and fluid communication.

Serenity pressure data: The Tain wells did not encounter an oil water contact and the pressure data indicates that the oil water contact occurs at 5,270’ when the data is adjusted by 40 psi to reflect the pressure effect of 387 million barrels of voidage (aquifer and reservoir) that occurred at the Captain Field to the northwest. Whilst recognising the 40 psi adjustment reflects interpretive/analytical work undertaken by i3 Energy, we believe that in
general pressure data is particularly robust for the determination of oil water contacts. This is critical because if the oil water contact occurs at 5,270’ it implies that Serenity is filled with oil down to that depth.

Tain production data: Tain’s 13/23b-5Z well was production tested and i3 Energy’s
analysis of the tests indicate that the well’s pressure sink is not bounded despite the well being drilled 230 meters from the southern terrace margin (the main fault defining Tain’s southwestern boundary in the structural map). This finding implies that Tain is in fluid/pressure communication with productive reservoir outwith the boundaries of the Tain terrace. This data corroborates the concept that Tain and Serenity are effectively a single reservoir in pressure/fluid communication.

Low Break-evens: Due to the highly productive character of resources in the Captain
Sands channel and the low cost to drill wells to this reservoir depth, we estimate,
assuming a success case, that Liberator Phase 1, Liberator Phase 2 and Serenity would have NPV10 break-even oil prices of $29/barrel, $30/barrel and $29/barrel respectively.

Commercial Independence: We believe it is important to appreciate that i3 Energy’s
portfolio is commercially diversified to the extent that Liberator Phase 1 is intended to be produced via the existing Bleo Holm FPSO (operated by Repsol/Sinopec) whereas we believe that Liberator Phase 2 and Serenity would, if successful, be produced through a fit for purpose FPSO with sufficient scale for those developments.

Serenity: Serenity is a prospect representing the downdip extension of the Tain oil
discovery. Serenity would, if successful, have a significantly larger surface area and greater thickness than Tain. If successful, we believe that due to its scale, Serenity would require independent production facilities (or shared facilities with Liberator Phase 2), whereas Tain could, in our opinion, be tied into existing infrastructure, namely the existing Repsol/Sinopec operated Bleo Holm FPSO either directly or via the planned Liberator Phase 1 infrastructure. The Tain reservoir is considered to consist principally of Captain Sands with a thin underlying bed of Coracle Sands. Tain benefits from 4 well penetrations. i3 Energy has undertaken an analysis of relevant pressure data, test production data, which along with seismic data and i3 Energy’s regional geological model directly supports the prospectivity
of Serenity. A structural map of Serenity and Tain is provided below. i3 Energy’s volumetric figures relate only to oil within its 100% held block (Block 13/23c).

Liberator / Serenity Context: i3 Energy announced on 17 October 2018 that it engaged an acquisitions and divestiture advisor to assist with a farmout of the Liberator oilfield. On the 12 December 2018 the company announced that it had begun marketing Serenity as a farmout prospect. A successful farmout would represent a highly material milestone by securing funding to progress the company’s projects. A farmout could take various forms, we believe a possible farmout scenario could see i3 Energy fully carried (funded) to achieve first oil at Liberator Phase 1 as soon as 2020, for the drilling of a pilot/test well to confirm the expected potential of Liberator Phase 2 and to drill an exploration well into Serenity. In return for providing funding, the new partner would earn an interest in the relevant blocks,
which are currently 100% held and operated by i3 Energy. First oil from Liberator Phase 1 is expected to provide i3 Energy with material cash flow from operations to fund subsequent progress.

Copied from ADVFN -

For those who haven't been able to access the WH Ireland note:

We have undertaken a technical review of the Serenity prospect and believe some
of our findings are also relevant for the prospectivity of the Liberator Extension
(Liberator Phase 2) to the northwest of the Liberator discovery (Phase 1). In our
opinion, i3 Energy has essentially unlocked a regional geological model that is
robust, coherent and supported by the entirety of a broad cross-disciplinary data
set. Based on this model and its supporting data, we believe that Serenity and the
Liberator Extension are particularly attractive in terms of the probability that
drilling them will result in success, although of course our positive appreciation
will need to be tested by the drill bit.

Context: Liberator Phase 2 has been ascribed 69 million barrels of potentially
recoverable oil (22 million barrels of 2C for Phase 2 East and 47 million barrels of prospective resources for Phase 2 West as estimated by AGR Tracs). These resources are additive to those of Liberator Phase 1 (consisting of 11 million barrels of proven and probable reserves as estimated by AGR Tracs). We estimate Serenity has 69 million barrels of prospective resources based on i3 Energy’s oil in place estimate of 197 million barrels and a 35% recovery factor. We perceive the risk/reward profile to be exceptionally compelling for both Serenity and the Liberator Extension to the northwest of the Liberator discovery. We further perceive that there will be a weak correlation between the success or failure of Serenity and the Liberator Extension, which favours a multi-well campaign in
our opinion.

Regional model: The Blake field, the Liberator discovery inclusive of its extension to the northwest, the Tain discovery and the Serenity prospect are all considered to be a single petroleum system sharing an oil water contact at 5,270’.

Chance of Success: For reference, AGR Tracs has ascribed geological chances of
success of 70% and 56% to Liberator Phase 2 East and Liberator Phase 2 West
respectively. We perceive that Serenity’s chance of geological success is comparable to that of Liberator Phase 2 West or 56%. This reflects our assessment of i) a robust petroleum system, inclusive of our appreciation of the ubiquitous high quality of Captain Sand reservoirs, ii) supportive pressure data from the Tain discovery and iii) supportive seismic data inclusive of an amplitude anomaly conforming to the 5,270’ contour interval.

Valuation: Based on a host of assumptions and a $55/barrel crude oil price (inflated at 1% p.a.) we estimate that the gross best estimate success case values (after-tax NPV10) of Liberator Phase 1, Liberator Phase 2 and Serenity to be $154 million, $457 million and $518 million respectively.

research-tree.com/companies/uk/oil-gas-e-ps/i3-energy/research/whireland/-review-of-serenity-prospect-/d902ef57-3b88-4f03-a717-eb341681e568

https://*********************/companies/uk/oil-gas-e-ps/i3-energy/research/whireland/-review-of-serenity-prospect-/d902ef57-3b88-4f03-a717-eb341681e568

For anybody following PMO, Zama appraisal results are likely to be announced before the vertical sidetrack.

Hugely important for their balance sheet and Sea Lion.

Results probably due within the next 2-3 weeks.

News end of Q1 unless I reckon.

There has been a fairly large buyer in the background for a week or two now though - very interesting.

Certainly is. But will the OPEC+ cuts work? And how will the global economic jitters affect demand?

If Brent can get back to $65+ then PMO will motor, but it's a big IF.

Giblets, the LOIs have all been extended on the same terms as before (no cost inflation).

Some positive news after some digging:

Discussions with UK Export Finance & HMG have taken longer than expected (Brexit has been taking up a lot of time!) but they are now close to completing their regulatory review.

The final elements of FEED are also getting closer to completion.

Nothing has been put on hold because of the oil price drop, but I get the sense that a strengthening oil price over the next couple of months would significantly help the cause.

Shame to see the wider market & global economy having a wobble. Hopefully Trump & China can get a deal done asap and the OPEC+ cuts have an impact over Q1.

I understand that results of the appraisal will be released prior to the vertical sidetrack, so news could come at any time in the next couple of weeks.

I think shareholders do deserve better than a cursory one-liner stating "good progress" on Sea Lion again. Yes Tony Durrant may have mentioned 3-6 months for FID in August and yes the oil price has fallen but the last communication from Rockhopper regarding FID was that it was targeted for the end of 2018. To allow that period to lapse and simply state that LOIs have been extended by 12 months is a bit insulting to shareholders who deserve more information.

Personally I think we need Brent at $65+ for the project to be sanctioned. We need to hope that the OPEC+ cuts have an impact, and a positive Zama appraisal for PMO would strengthen their balance sheet too.

Pathetic communication from the company today though.

The global cuts in CAPEX from 2014 until now must take their toll at some stage, even with cost efficiencies and shale growth.

The early 2020s will be key - can shale make up the shortfalls elsewhere?

Well OPEC cutting is a relief. Would like to see Brent to push up to $70 now, but the markets are jittery about a global slowdown/recession. Let's hope Trump & China resolve their issues asap.

Because the Oman oil minister suggested the cut might be just 1million bbls. Bulls are wanting a cut of 1.3million minimum, more like 1.5million+.