Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
That is a great point that GP makes (on ADVFN), and key difference between the US and UK that I hadn't appreciated - the importance of not being front run by other companies when you have a success, and snapping up the potential value available locally for other wells.
You could if you had more information about existing well and this one.
Not all nearby wells are necessarily accessing the same reservoir. there may be faulting creating a different trap.
The fact that the well was drilled shallower than expected suggests that you CAN'T infer from nearby existing wells.
Yes, but what I'm saying is that flow rate in isolation has nothing to do with the share price, because it can't be used to work out the size of the recoverable resource and thus a value for the asset.
How long will it flow for? Its NOT a shale well, so it won't drop off at 45% per year. That's ALL we know.
An oil well is valued on the basis of the number of barrels it will produce in its lifetime, not on how many barrels per day it produces initially.
Flow rates mean nothing really. No one with any knowledge of oil and gas will buy anything based on just initial flow rates of a well in the complete absense of any sense of the size of the resource. We haven't even had pre-drill estimates of the reoverable resource with this well. We know next to F-all.
We need NUMBERS: Thickness of reservoir, permability and porosity, API of the oil and gas content and pressures.
Its possible that the wireline logging has already been completed. THAT is what I want to see.
I'm not sure where the pant wetting about money is coming from.
Well completions cost much less than druilling, and they were obviously able to secure vendor financing during the drilling overruns......therefore completion vendor financing is much less risk for ther lender.
On top of that, the oil produced during cleanup wil be sold for income and as has been noted already, UJO has a track record of providing liquidity for strategic partners.
100% of 200 bpd at $80 is a LOT of money in the near term.
I don't buy the US Shale oil new tech thing.
Any 'new tech/ will require even more energy to extract. Anyway, its the wrong type of oil for the US refineries, and its difficult to get to refineries too. US refiners need medium sour crude, which is why they are still draining their SPR I think.
This article fails to address the main point - that oil fields don't produce at the same rate for ever.
We know there's a been a HUGE failure to increase E&P investment in line with demand in the last decade and its fallen off a cliff since covid.
Natural decline rates are significant, and 6 months of status quo either results in reduced production, higher costs from stimulating reservoirs or a depletion of reserves that are not replaced by E&P.
The supply side is not a given.
A million barrels here or there is within the noise for inventory. I understand that the hub at Cushing Oklahoma (where futures are settled) has a minimum operating inventory, and they spent 2022 within a whisker of that for months on end.
The US SPR refill is the elephant in the room as far as I'm concerned. They need medium sour crude, but shale is producing 10m barrels per day of light sweet crude that needs to be blended down of the US refineries run inefficiently and produce much less diesel. They need to import the oil to refill the SPR.
If they could refill it with Russian crude on the grey market at a $35 discount, then they would turn one hell of a profit having sold 100 million barrels or so over $100.
The market is pretty much in balance, and the Saudi's have more potential impact to the REDUCED output side than they do the upside for production. The world did not invest enough in E&P in the last 10 years outside of US shale (which is peaking) thanks to misguided green ESG nonsense, so we're stuck with existing fields that will decline and pushing them harder will exacerbate that decline rate. The chickens are coming home to roost in the medium term.
In the meantime, the bond market and yield curve say 'recession ahead' and have priced it in, as has oil. The broader equity markets on the other hand defy gravity still with no recession priced in.......except probably the oil and mining stocks which are on sensible multiples with FCF and dividend looking solid.
Trouble with banks, financials and the financing of 'growth' knocked oil the hardest and it hasn't bounced back like the broader index. Bonkers stuff. What a time to be alive.
2000 barrels per day is a very conservative estimate for a plateau phase for a two well Wressle development, with the Todgerstone interval (the big one) chugging along, and the option to perforate/complete the Wingfield and Santon intervals from either well in the future.
With a single appraisal well on the field, which is now a producer obviously, there's a limit to the reserves that can be 'banked', but the lack of any depletion/water cut thus far makes a mockery of the offical reserves. A second well, stepped out a bit, and then another exploration/apraisal at Broughton North thereafter....this is a long term producer play
How long were Brent and Forties supposed to produce for?
Who is this idiot and where did come from?
'Low chance of success' at Wressle!! ROTFL!
The field has be be drilled and appraised. The *****tone interval (the big one) has been drilled, analysed AND flow tested. The next well is neither exploration nor appraisal, it is 'DEVELOPMENT'.
Why would they mention West Newton?
The RNS was simply due to price sensitive information about joint projects announced this morning in their RNS.
Any update about West Newton worth reading will be announced by RBD (the operator) first!
A milllion dollars a month on top of the £10m in the bank in the meantime.......with gas monetisation at wrestle to add on in the next year.
There are options to do development drilling at Wressle and Keddington too, which could be announced and completed inside of a quarter or two at any time. Wait for EDR results/update in November.
Dividend and/or buyback should be announced this year too.
In the meantime, what happens if pound drops further against the dollar, or Putin voluntarily withholds 1m barrels oil from the market after the start of the Northern hemisphere winter and/or China slackens on the lockdowns after their CCP party conference in the face of weakening economic data?
The upside risk for the price of Energy and the USD are not inconsiderable.
No he wasn't you strange man.
He was speaking in generalisations about what SOME wells do, which again is obvious. The whole reason for the interview was that a lot of people DO NOT understand basic petroleum geology and engineering, and some people WILFULLY misunderstood and took to the bulletin boards.....for reasons that are fairly obvious to all.
Because of the obvious need for clarity on a BASIC level, he was giving context about what some wells do as a CONTRAST to what Wressle is doing because he was not able to actually say anything specific outside of an RNS.
We know the well is restricted by choke to 800bpd. No RNS so far as conformed a pressure drop, and ALL RNS so far have conformed ZERO water cut (unlike UKOG's horse hill which as an oil cut in its water).
If you produce a barrel of oil, you DEPLETE the reserve by one barrel.....that's obvious. That's why DB said 'we are seeing depletion' (because we're seeing production). If there was NO DEPLETION after 250,000 barrels produced, then they'd have to RNS the discovery of a new branch of physics.
What he also said was 'we SHOULD be seeing some pressure drop, some water breakthrough' and then checked himself, because the fact that they are NOT seeing that would, and stating it categorically, would be price sensitive information and in the gift of the operator to reveal. The tone of voice implies what?