Member Info for pauldrayton

Yes Sam:

The proven oil and gas in the Falklands has the potential to form a material part of wider UK energy supply in a relatively short time frame, bringing with it huge potential security of supply and financial benefits for all stakeholders.

Good that they have encountered hydrocarbons in both targets. Sidetrack required due to formation issues and it’s interesting that they want to perform a DST.

Not a definitive result yet but certainly better than nothing!

I agree regarding a sidetrack. I don’t think they would announce it unless it took them significantly over the original stated timeline (hence costing the company more money).

I guess we just have to wait and see.

Yes they did include a potential sidetrack in the permit application. As it’s an HPHT well I guess they were making provisions in case they encountered formation problems. They stated a sidetrack would take an extra 37 days which seems like a lot, but if that’s the case then it could be a while longer yet as you say.

Is it possible the operator are keeping Longboat completely in the dark, and Helge is therefore making his comments innocently with no knowledge? You’d think as 20% holders in the license they would be kept up-to-date.

Crossed my mind too - Helge has mentioned a Oswig in his comments in the last two RNSs. An odd thing to do if Oswig is no good. You’d think he’d have an idea of how it’s looking by now unless they’ve had major delays.

Having said that I remember him saying he was looking forward to updating the market on Cambozola results so I’m wary of reading too much into it.

I would be amazed if they did not spud Serenity yesterday. Not sure about the “later this week” comment in the RNS.

I’m sure Helge mentioned that they were looking in other jurisdictions at one of the more recent Investor Meet presentations. I do agree that there is no need to restrict themselves to Norway although that’s obviously their comfort zone.

I would have thought Kveikje could be sold or swapped, and the broker note hinted there might have been some progress on this.

With regards to Oswig, most of the shipbrokers are showing 1st October as the ‘next available’ date for the supply ships which suggests there are about 10 days left of operations. Some of that will be P&A so news should come a bit sooner unless that date gets pushed back again. Apart from one large sell there doesn’t appear to be much in the trades today to suggest any kind of leak.

Haha I assume that’s a joke but they don’t stop work offshore for anything.

Stena Don is now at SA02, so yes I would expect a spud RNS on Tuesday morning.

Stena Don is on the way to Serenity now.

Well I think we will find out next week either way.

The duration makes me think/hope they might have found something of interest, but if so then reservoir quality and thickness of sands are going to be the key.

Nothing we can do now anyway for those still holding!

Well spotted. What do you make of it Mozza?

Some very large trades printed today but surely the UT is a mistake?

Doesn’t time fly! I clearly remember that day when L2 hit water and the share price crashed - I was looking at a wedding venue with my fiancée at the time and started to wonder how on earth I was going to afford it!

Well the Maersk Intrepid stopped reporting its location 5.5 days ago, and the supply ships and Ocean Mermaid all switched off their AIS as well when close to the rig. So it looks like there may be a comms blackout around Maersk Intrepid - perhaps that was when they started to drill through the target reservoir.

I don’t think there have been enough trades (buys or sells) to indicate a clear leak, although somebody somewhere will know what’s going on and they may or may not act on that knowledge.

I think the share price held up quite well considering another dry well was announced yesterday. Whether that’s to do with Oswig or perhaps expectation of Kveikje monetisation (as hinted at in the broker note) I don’t know.

Meanwhile Ocean Mermaid is heading back to shore.

Nomadic & Tony are partially correct.

The money men did influence the choice of well location which meant i3 drilled L2 before A3. They wanted to do it the other way around, and had they done so, I think they would have discovered oil and proven the western flank of Liberator. They would then have discovered Serenity as well and the share price would have rocketed.

The i3 geo team (mostly Mihai Butuc) did think L2 would hit oil though and it was supposed to be a safe bet. It was the highest relief sands mapped close to the original discovery well, but the difficulty with Liberator is that most of the eastern flank’s sands fluctuate just above and below the oil-water contact. They weren’t trying to find the edge of the field, they just got their seismic interpretation wrong - most of the previous seismic interpretations showed L2 being below the OWC, but they trusted a new version which ended up being wrong. A small difference in the depth of the sands meant a lot more than they hoped was below the OWC.

I still think the western flank of Liberator and the Minos High is full of oil, and I sincerely hope this is included in future drilling if the Serenity appraisal is successful.

With regards to Serenity, there is much more leeway for error on the seismics. At Liberator it was very fine margins but the sands are are at a higher relief at Serenity, meaning there is a thicker section above the oil/water contact. The i3 theory is that those sands thicken to the west, with a larger section above the OWC (they are suggesting 40ft at the appraisal location). Even if they are 20ft out, there should still be 20ft of sands above the OWC. The oil in place would be lower but it wouldn’t be a total failure.

That doesn’t make this appraisal well a guarantee - there are always unknowns when appraising an oil field, especially at an early stage, but it’s not the same issue they faced at Liberator.

I would agree about Buybacks but let’s get Serenity drilled first.

I noticed a while ago that the Oswig supply ships (North Pomor & Norsea Fighter) had a ‘next available’ date of 15th September (so they were scheduled to finish work for Maersk Intrepid today). That’s 45 days after the spud RNS, although I agree with Mozza that spud was probably a couple of days earlier (but it was announced on the Monday when the market opened). Assuming that’s true, 15th September would have been 47 days after spud. The OMV document had an estimated well duration of 46.6 days for a dry well, including P&A. So I’m guessing that 15th September was a provisional date provided to the ship brokers on the assumption the well was drilled as expected and came up dry.

A week or so ago that 15th September ‘next available’ date for the supply ships was pushed back to 20th September and in recent days has been pushed back again - it’s now listed as 25th-30th September, depending on which broker you look at.

If we take the earliest (25th September) that’s 57 days from spud, and the latest would be 62 days from spud. OMV’s estimate for a discovery was 58 days which included 11 days of logging - pretty much in line with how long the supply ships are ‘currently’ forecasted to be required.

Now before we get excited, it’s an HPHT well and it’s definitely possible that there have been delays. I should point out that OMV did state that it could take up to 58 days to drill to TD in a ‘worst-case scenario’. So genuine delays are a plausible explanation, and I think the Ginny/Hermine well was later than anticipated and that came up dry.

The other thing to bear in mind is that reservoir quality was one of the key risks for this well, mainly because of the depth of the target sands. So even if they have found hydrocarbons and the time has been extended to log, they won’t know the quality of the target reservoir until they have completed wireline logging.

What we do know is that the well has gone on longer than the standard ‘dry well’ estimate which assumed no major delays. We don’t know whether there have been delays or if they’ve found something worth logging, and if they have found something then there is no guarantee it’s commercial. So whilst I’d like to get excited, it’s probably too early for that yet.

The other point of interest is obviously the Ocean Mermaid vessel which has been surveying in and around the Oswig license area for several weeks now. They can’t have known the outcome when it first started so it’s strange but intriguing nonetheless.

If the supply ship end dates don’t get pushed back again then I suspect we will hear news at some point next week.

B*gger.

So 2 out of the original 7 wells were successful (Kveikje & Egyptian Vulture), and Kveikje had a CoS of over 50% so was more likely to be a discovery than not. I’m not counting Rodhette because it’s too small - might be worth something in the future but not for a long time.

That’s not a great return for the LBE geo team to be honest. A 28.5% success rate compared to an industry average of over 50% over the past few years - they would have been better picking prospects at random!

Anyway thankfully a lot of these wells have come in quicker than anticipated and therefore a bit cheaper, which has allowed them to farm into the extra two (Oswig & Velocette). So the hope rides on them now.

I’m surprised we haven’t heard anything more about Egyptian Vulture - I thought they were supposed to be planning an appraisal well in the spring. Let’s hope LBE have the funds for their share of it because it would be a disaster to be raising more equity at these prices.

Onwards we go - poor effort from LBE so far but still a bit to play for.

Yes it’s back to the Faroe Petroleum model.

They hoped to do it quicker this time through acquisitions but looks like they are reverting to type.