Member Info for Scott22

yet we languish....

Share price at any one time point is always complex with factors related to global economy and geopolitics (complicated by pandemic), the global energy sector (complicated by climate change) , the overall stock market and the sector performance, the local economy and politics, the local energy enviroment , and finally issues related to the company specifically. Many of these are interrelated of course.

Druid's list of positives is very accurate and most items on list (everything but Royston discovery and good oil prices) are pretty much baked in.

1. Company is undervalued relative to already existing assets and proven reserves

2. Cascadura development is very low risk and additional reserves will be proven as first two wells are hooked up and additional development wells are drilled.

3. Coho will be tied in

4. Legacy program is ongoing now and will increase oil production incrementally, though only a little

5. Natural gas price (unlike oil price) is guaranteed at a price that ensures good margins.

None of those will change the share price quickly independent of other market forces. The changes will come over time by demonstarting operational excellence and proving it by growing production, revenues and profits sequentially.

Royston is a game changer as mentioned, and will have a quicker impact on share price. There are other items not on the list (and not baked in) that could have big positive impact - but they are out a ways. They include positive deep test at Coora, positive up dip oil well at Chinook, positive discovery at Steelhead, ....and the Holy Grail .... Kraken oil discovery.

5 bagger could or even should happen if Royston is equal or greater than Cascadura. Odds are good. Time frame is short.

10 bagger will happen if Kraken is oil filled cretaceous prospect analogous to Guyana/Surinam offshore oil discoveries. Odds are low. Time frame long. But what a nice little lottery ticket to have.

I do appreciate your wealth of experience. I am glad you and a lot of others with diverse background and experiences have made this a good board. I hope we all do well. May targets are were $ US 3-5 end of 2021 and $ US 5-10 by end of 2022. I have kept the target numbers but moved them back 6 months. I see the possiblity of a 10 bagger from here within 18-24 months. I am very intrigued by the geology and I have added to my knowledge base in that area. I totally appreciate XM for a number of different reasons. Also I like Paul Baay. Not so much John Wright and I wish he would retire. Mostly old baggage however.

Thanks, good strategy. Feel free to correct any errors. Information provided by XM has been very valuable in that respect and I always welcome good input and clarifications and corrections. I have been in TXP since the day it was purchased by Petrobank which at that time was a shell company with some cash. After the purchase the name was changed to TXP. But of course the OTC symbol in US is still PBEGF in case any one wondered where that came from. I too have made money so far and I do hope that TXP may be a significant wealth creator for me . Not life changing at this point, but possibly could be.

I did review the Petrotal story and I must admit I was disappointed that it had zero to do with TXP. They have an producing oil field in the rain forest only accessible by river. They have one pad on the edge of the river. They are drilling all the wells off that one pad and that is why they are drilling 1000 foot horizontals in a ray pattern to try to drain the reservoir from one spot on the edge. Each well costs $15 million dollars. Nothing to learn from that. This is not instructive of any situation facing TXP nor of anything they should consider doing. I would not trade the Cascadura discovery for the whole Petrotal company. Nor would I buy PTAL.LSE. I would not trade that for anything I own. But I am continuing to buy TXP with new money.

Thanks for sharing. Clearly you are the smartest guy you know. That’s good enough. Though so far I have learned more from others. Share whatever you feel like sharing. Whenever you want. No pressure here. No urgency either. We aren’t running the company but only trying to understand it. I think we are headed toward a great 2022 and 2023 for TXP. Let’s all enjoy that.

Also I see you were really asking about the shallow oil wells over on the legacy side (whether they would be suitable for horizontals) which I did not address. I think that also depends on geometry and how uniform the oil deposits are whether they are connected or disconnected laterally. Likely a much better question for Xavier Moonan. In US and also Canada the horizontal wells are used for layers of shale distributed over wide area that can be approached with long horizontals combined with fracking to allow the tight oil to flow. i don't think they would work or would be necessary if you are talking about smallish pools of oil that can be tapped by individual vertical wells. You question mainly makes me want to learn more about the geology over on the legacy blocks, including the shallow oil deposits but also the extensive deep sands that have not yet been tested. And also to learn more about applications of horizontal drilling. Maybe someone here can comment.

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Thanks, I did have one wrong number. I am not pessimistic about ramping Cascadura next year.

"Royston development wells (if it is a discovery, god willing) can not be drilled immediately, not fast enough to keep the drill bits from cooling. There will need to be a project wide EIA, additional roads and drill pads and wellhead facilities and gas and oil pipeline spurs. Will be mid 2023 or early 2024.

That is why fast tracking the Cascadura EIA is so important. Once that is accepted they can start all that work described above and drill Cascadura development wells, Chinook up dip wells, even some Cruse horizontals at original Chinook well. They should be able to drill at Cascadura project in mid 2023 [CORRECTION - IN MID 2022]."

I am not sure I can fully answer that but I think it is mainly about geometry. In a conventional reservoir a vertical well can drain the entire vertical dimension and a variable circumference depending on the characteristics of the reservoir. A small number of vertical wells can drain the entire pool with a limited number of producing cylinders. Horizontal wells would drain a larger lateral expanse but more of a rectangle than a square and would only drain part of the horizontal extent and and a small part of the vertical vertical extent of the reservoir. So it would be part of a slice. To drain the whole pool you would need multiple horizontal wells at each of multiple depths. That would be much more costly and much more complicated. I have never heard of anyone draining a conventional reservoir in that manner.

The Cruse on the other hand is a thin slice of gas with a huge horizontal dimension (more like a pancake). A vertical well drains only a tiny piece. A long horizontal could could drain all of the 30 m of vertical dimension but do it over 1500 meters of horizontal span. That might make the wells bigger producers and much more economic even at higher cost. I do not know how long they would produce as compared to a vertical well in a deeper structure less constrained from top to bottom. That might be complicated.

Sorry if this is overly simplistic.

Agree with huge potential of Royston and need for development wells there if discovery is made. But that will take time (drill its will have a chance to cool down.) They will need EIA for Royston development (if a discovery is made, god willing). They will need roads and pads and The will need infrastructure at the well heads and both gas and oil pipeline

Royston development wells (if it is a discovery, god willing) can not be drilled immediately, not fast enough to keep the drill bits from cooling. There will need to be a project wide EIA, additional roads and drill pads and wellhead facilities and gas and oil pipeline spurs. Will be mid 2023 or early 2024.

That is why fast tracking the Cascadura EIA is so important. Once that is accepted they can start all that work described above and drill Cascadura development wells, Chinook up dip wells, even some cruse horizontals at original chinook well. They should be able to drill at Cascadura project in mid 2023.

In meantime the can drill legacy development wells, a deep test at Coora, and maybe get started on steelhead once that pad is ready. They may only need one rig for awhile after Royston is finished. They won’t run two rigs again until Cascadura cash is coming in from the two existing Cascadura wells. They may even park the Canadian rig for a few months, though they do need the 110 drilling days a year that the contract requires.

So much is ahead. But not quite ready to accelerate drilling program and keep two rigs humming. That will come.

that would make sense - they haven’t talked about a second coho development well for a long time. the planned pipeline is big enough. Shell has capacity for sure. If equal to the first one (roughly 10 mmcf/day) would bring profits of US$6 million a year, payoff would be 6 -9 months. Every little bit helps. At its best Coho has 1/10 production potential of Cascadura. So Cascadura development wells take priority. But they may be able to get a second Coho well done (with Canadian rig or even Well Services rig after it is released from Royston) before the Cascadura development plan is done and drilling can resume there. A second Coho well would need permits and a second Coho well pad.

Agree that just reproducing the shell wireline won’t be enough but if you combine it with free flow of high pressure gas to surface that would be different. They will try to control that but may have to adjust mud weight or even do some flaring. That would take it a step beyond where Shell got to. They can announce a discovery based on hat but they will need flow rates and full pressure testing to talk about commerciality, reserves, projected production rates, gas composition. I know I am getting ahead of the story. It is exploration. They have nothing (but high hopes) until they prove it.

Drill bit should soon be entering the 700 feet of potential pay that was shown on the Shell wireline more than 60 years ago. Plus there is a deeper sand below that has never been tested.

Nothing fishy here. Clearly from the beginning the well was planned as the climax of the 5 well exploration program, biggest and baddest prospect. It is an exploration well but there are strong indicators including wireline from old well plus old and new seismic plus turbidite sand model is now proven. And Paul Baay is an oil man focused on exploration, finding and producing oil and gas. His father was in the same business and Paul followed his path. So Paul named this well after his father. I promise that he dreams of a nice discovery well. To honor his father. I hope his dreams come true.

Kind of exciting.

With the current contract price TXP has profit after taxes and royalties and expenses of about US $6 million per 10 mmcf/day. So if Cascadura (once all development wells are in place) can produce 200 mmcf/day which will give them $120 million a year in profit. PLUS the profit on 5000 bpd of liquids which are not included in the contract.

Remeber that the TOTAL production last quarter for TXP was 1400 bpd of oil.

There is another $6 million a year from Coho which is dry gas at 10 mmcf/day.

Now let's speculate that Royston is double Cascadura - It is exploration, nothing is proven, but 400 mmcf day (full development) would be $240 million a year in profits - plus any liquids.

Then there are multiple other prospects of course. Cruse with horizontals at Chinook? How about an up dip oil discovery at Chinook?
Maybe a deep Herrera discovery at Coora? Meanwhile TXP can pretty easily double oil production on shallow legacy blocks to 2800 bopd production. How about more turbidite sand discoveries at Steelhead, Guabine, Bass, about 5-10 more.

Don't even think about Kraken. (deep cretaceous oil prospect) . Too crazy to imagine.

Agree that a a Royston duster would be disappointing and would result in share price drop. But exploration is never perfect. We cannot expect that the even exploration wells in the queue will all yield big discoveries. But once revenues and earnings start to steadily and impressively ramp, one or more negative wells will have less impact. Royston, Coora deep test, Chinook up dip, steelhead, Kraken, Guabine, and Bass will not all be negative. Likely not all positive either. But the alternate story of increasing production, revenues, profits, dividends will support the value case as Cascadura comes on line and development wells at Cascadura and other locations are drilled. The exploration program will continue to add greatly to the story, but it won’t be the only story or even the main story.

Very interesting conference today covering all exploration commitment wells for oil and gas blocks on TT from 2008 through 2019. There were only a total of six on-shore exploration wells drilled and none are yet on production. There have been no new bid rounds since 2014
Coho will be first new gas discovery to go on production. Cascadura will be second.
Touchstone has drilled most of the exploration wells on shore Trinidad and had had most of the success. It is interesting to see how much they have been able to accomplish, with activity continuing to accelerate that will ramp over years. No one else has done anything like what they have done. And what is planned are development wells at Cascadura but also at least 7 more exploration wells (Royston, Coora Deep, Chinook up dip well, Steelhead, Guabine, Kraken, Bass. That is more than all the exploration wells on shore Trinidad in last 20 years, of which most of them were drilled by TXP too, the familiar fish we have been following.
This puts the delays in a little different light. TXP is moving pretty fast compared to peers and considering minimal level of on shore exploration in Trinidad in last 20 years including none on Ortoire block before TXP program. It is not exactly like hammering out wells in Permian basin or Montney with all the support right there to get them on production almost instantly.

Junky, I do not mean to irritate you though if Royston is a discovery you will find yourself less irritated.

It is hard to co-mingle production from separate zones at widely different depths and pressures. True anywhere. You mentioned one technique for totally separating the two zones. Does not always work that well.

And your comment about pressures being different under 100 feet of water and under 300 feet of water is true but totally unrelated to anything that I was talking about

Point is that Cascadura is bigger than people realize, the individual sands are conventional reservoirs that can be produced by simple vertical wells. The development plan will lay out optimal number and position of wells to produce the discovery. (keep in mind that there are also deeper sands - hence Cascadura Deep which did not get there - that have not even been tested. It won’t be that many wells and they will produce for years - there will not be need for major ongoing capital to keep production going. It is a major discover.

Cascadura is totally under appreciated. Now let’s move on to Royston which is double Cascadura and Coho put together.

I think both are true - a bigger well bore would allow higher flow from individual high pressure sands. But you still can’t easily co-mingle high pressure deep sands with low pressure shallow sands. (that is a problem you don’t have in tapping an off-shore pool, everything above the reservoir is water and the reservoir pressure is more uniform.)

Remember that both of these reasons that limit flow from the current Cascadura 1-ST well illustrate how big the Cascadura discovery is, its potential to produce gas, why it is not fully appreciated. The development plan will lay out number of wells (not that many) and size of well-bores (big) needs to exploit the resource in efficient manner. It really should produce 200 mmcf of gas for many years. Plus 5000 box of liquids.

It is a little more complicated than casing issues in terms of producing different reservoirs at different depth. The deeper of the two tested reservoirs (the one they are producing though not the deeper never reached target sand) at Casca1-ST is at much higher pressure than the more shallow sand above. So the upper reservoir really wouldn’t flow in face of higher producing pressures unless if was isolated and the two zones were produced separately. Lots of challenges there. Better to price the second more shallow sand from a separate well bore. They will have a plan by end of year for exactly how many wells they need.

Thanks all, good clarifications. Cascadura will need 3-4 more development wells - that will be defined by the development plan - but that is nothing like the number of wells (hundreds over a decade) needed to produce an unconventional shale resource of this size. Thanks for correction about the volume of liquids, should be 5000 bopd once Cascadura is fully developed. And there is that deeper sand that was not tested at Cascadura1-ST or Cascadura Deep simply because they were overwhelmed by all the high pressure gas above. That is not a bad thing.

Also Royston could be bigger, but right now it is ACTIVE exploration. Will become a discovery if they discover something. We are talking weeks to a month or two to find out.

Always follow Xavier Moonan on FB and Twitter.

Best to all. We are very early in this exploration and exploitation of the Ortoire block.

I think we could see a drop with a further delay, but no real jump with announcement that construction has started. After all construction could also take longer than planned. The two events (starting construction and getting the first 10 mmcf of Ortoire gas on production) will likely be met with a sigh of relief.

Royston discovery, solid Cascadura development plan accepted, first gas (and first liquids) at Cascadura, Cascadura development wells, maybe even good results from legacy commitment wells, certainly a discovery at a deep test at Coora - all those items will move the shares higher. Further down the road we have a lot of other possibilities, Royston development plan, onset of production from Royston, additional Royston development wells. Then the three well second phase of exploration that includes the mighty Kraken, almost too wild to believe and more of a speculative wild card (lottery ticket) than part of the orderly development of Ortoire which is focused on turbidite sands and not on deep Cretaceous prospects - and will unfold over the next 10 years.