RE: California31 Jul 2018 15:30
Absolutely right, adouble. If Colter is a strike, it will be a very juicy prospect for a major oiler with the financial means to come in and exploit. It would be out of reach of juniors. But being the junior with the license becomes incredibly lucrative. That is the brilliance of the concept here - all they have to do is a small and relatively inexpensive, temporary offshore jackup rig to test the prospect. That's it. Limited cost and risk. But if it's a strike, the license becomes incredibly valuable.
Important to underline that A) massive BOPD figures are not the idea here. The rig won't be the sort that could support that anyway, and it's more about showing conclusive evidence of the oil than actually producing a huge amount. B) In success OR failure, either way the well will be plugged and abandoned. This is a TEMPORARY offshore structure with absolutely no plans for production. The production would be done by an oil major, accessing from onshore using horizontal drilling, most likely Perenco from Wytch Farm who will be watching this unfold extremely closely. Either way, success of failure, the rig is temporary, and this is why getting permission is not a problem. Stephen told me the other week that they'd had some minor amendments to the drilling plan given to them by the EA, which have now been made. That's not something that happens if permission is going to be denied!
But I feel it's important to always say this: The advantage of Reabold over other players in Colter or Wick is that Reabold has far more diverse exposure to far more projects around the world. Also it is cash-rich (we expect another asset acquisition using cash soon as the company has hinted unequivocally), and they have no drill cost obligations for most of their drills including Wick and Colter (as they are investor, not farmor). So the stock price doesn't rely solely on these UK drills. If anything, California and Romania are in some ways more exciting to me.
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