Member Info for Victor384

31-Dec-25 08:58:14 175.7956 10,000 Buy* 175.40 175.80 17.58k O

The Lundin Group

Group Total Market Cap: Dec 2025 | CDN$66.69 billion - over £36 Billion Sterling.

They have deep pockets.................

:-)

Fully agree !

I fully Machersman ! I haven't gone through all these years of hell to be ripped off !

How could DNO afford to takeover Genel and GKP ?

Not sure they could even afford GKP ?

IT'S NOW ONLY A MATTER OF TIME ! - IMO.

HATS OFF TO THE ELECTORAL COMMISSION FOR SLAPPING DOWN STARMER THE DICTATOR - AND DEMANDING THAT THE LOCAL ELECTIONS ( INVOLVING MILLIONS OF VOTERS ) GO AHAD AS PLANNED ! WE ALL KNOW WHY HE DID THIS AND NOW HE WILL PAY THE PRICE - THE ******* !

A couple of v technical geophysicist Qs that meant nothing to me... Overall JS seemed to be straight batting the Qs- not really engaging to any degree.

My Q: Given the size and complexity of the structure are you able to estimate the RF? "No- its too early... and you wouldn't expect me to say" (Sorry Gramacho- bit of a waste that one but I felt a bit cheeky asking anything amongst PESGB members!) He didn't touch on the drive mechanism as I remember and no-one asked about it. He did refer to the Aidayah formation and it acting as a seal there which allows for gas injection.

I hope this gives you a flavour of the presentation. It was good to see a technical man clearly amazed by what they had discovered. The 1000ft continuous oil column in the Jurassic clearly impressed everyone (JS joked that he hoped it was his persona that had drawn the audience but suspected it was the 1000ft oil column).

Cheers all,

Robbean

and the 'market' continually tells us that GKP shares are only worth 49/50p !!

Today's presentation focusing on Jurassic, not Triassic. Base sargelu - looked like a hot shale, + core data find there's no clay in that interval. Lots of coring. in totalwe have now cored 320m. You see very fine porosity "it's a source rock" porosity in micro fractures.

Sh-7 scheduled to go to the Permian.

"Fractures are key in terms of deliverability"

"Extremely fractured reservoirs" various sets of fractures... "All in all it's a bit shot to pieces... but that's a good thing."

JS seemed very upbeat about the fractured nature of Shaikan.

Pressure and fluid description-

"Sh-3 sh-1: 400m apart clearly in open communication- pressures respond almost instantly in both."

Sh-8 vertical interference test Adiyah provides an effective vertical seal (good for gas injection) . But zooming in on Butmah and Mus and you see tidal forces going on in the data- diurnal variation.

It's important to flow the well for more than 12 hours and record the time of year as there is as much as 6 psi diff depending on whether summer or winter. (Due to amount of water saturation- very dry in summer, v wet in winter.)

Some very big, very open fractures in here and they respond very quickly.

FDP: phased development. PF-1 PF-2. Well count 7, 20, 30.

In summary: It's a massive structure and "we don't pretend to (fully) understand it yet".

Questions

Production:will production come from fractures, matrix or both?- "We don't know". "We are confident some (zones?) will be both, others just by the fractures" (Did he say dual porosity model?)

One of the questions was about the difficulty of drilling in Kurdistan and JS reeled off 3 or 4 major issues. Massive mud loss (at one point injecting more than 8000 bpd of mud!. Took 8 days to get it under control), one drill taking 410 days, H2S gas + one other). Then said "It gets your attention" to a few laughs from the audience.

Have you found any water? "We have found water- can estimate contacts, not with a great deal of confidence"

Drilling problems in Kurdistan? "One of our wells took 410 days, massive mud loss- took 8 days to control it, at one point pumping in 8000 bpd equivalent of mud".

Here is another historical message ( from last year ) from a poster called 'Robbean' - who attended a presentation on GKP at the Petroleum Exploration Society of Great Britain (PESGB).

Robbean

Date posted 2013-07-10 01:12

Subject PESGB presentation_John Stafford

Votes for this Posting Voted 129 times.

Message

Hi all- here are a few notes from last night's presentation. The presentation by John Stafford was very techie so I sometimes struggled with some of the terminology. It was effectively a history of the Shaikan discovery (and more broadly how things had changed in the oil industry in Kurdistan since 2007). All fascinating stuff, attended by around 200 people, members of the Petroleum Exploration Society of Great Britain (PESGB)... and me.

Some notes:

Overall impressions: This is mammoth. The sheer scale of the anticline is difficult to comprehend and John did well conveying just how big this is... A 4x4 car, pan out, steep side to the anticline that takes 1 1/2 hrs to climb up. Pan out again and those steep sides look small fry in the bigger cross section) And how much work has been done to try to understand what is a complex structure. The other point he made about the sheer scale was that currently we have only 7 eight inch holes in the ground to work with in trying to understand it. He did a really good job in putting into context the amount of work required to understand something this size.

History: Very few there back in 2007. Didnt make notes here as we know about this. Through to the Sh-1 result with cumulative flow of 18000 bpd "to say it exceeded our expectations hardly covers it"

Understanding the structure first with 2D then 3D seismic, plus other things (giving higher definition). They have changed the way they view the structure. It is more of a box fold (?) architecture... Containing sharply turning hinges. Haven't drilled one of the hinges yet (more fractured)... "Going to be an interesting challenge."

Wondered for some time whether we had an anticline in the crest of the structure. We do. Improvements in imaging. He showed a slide of two images of rock formations (small scale) and likened one to Shaikan (with the fold) and the other to Sheikh Adi- more scrambled looking- no clear fold.

Detachment fold (Shaikan)

Sheikh Adi more scrambled (my words)

Oil seeps. In summer ot drips out "you can smell it". You could argue there's a seal problem- other exploration companies took this view and chose not to participate.

Http://en.termwiki.com/EN:skin_factor

skin factor

A numerical value used to analytically model the difference from the pressure drop predicted by Darcy law due to skin. Typical values for the skin factor range from -6 for an infinite-conductivity massive hydraulic fracture to more than 100 for a poorly executed gravel pack.

http://www.pe.tamu.edu/blasingame/data/z_zCourse_Archive/P620_02C/P620_02C_Exam_2/SPE_xxxxx_VE_Skin_Effect_WBS.pdf

The pressure drop in a well per unit rate of flow is controlled by the resistance of the formation. The viscosity of the fluid , and the additional resistance concentrated around the well bore resulting from the drilling and completion techniques employed and perhaps from the production practices used.

The pressure drop caused by this additional resistance is defined as the skin effect .

This skin effect considerably detracts from a wells capacity to produce.

——————————————————————————————————-

At Shaikan we have seen little in the way of formation water and yet we have a high skin factor. it is possible that this high skin factor was caused by drilling mud and associated liquids being pumped into the fractures effectively blocking them. Was it SH4 that had an acid treatment to counteract this and we all know what effect that had. SH4 is huge.

All of which only scratches the surface of the Ryder Scott Report.

There are many members of this board who have far more knowledge than I.

So the following conclusions are from a drilling novice and I’m happy to be corrected.

1. The permeability at Shaikan is VERY high when compared to Ghawar.

2. The skin factor noted by Ryder Scott could be due to blocking of the fractures by drilling mud

3. The wells can be cleaned up and better flow rates accomplished.

4. There is the possibility that the RF will rise over time as the fracture system and associated matrix is better understood

5. The Shaikan Reservoirs are remarkable – absolutely world class.

Kind regards

Dalesman

If we move to Texas there will still be the network of arterial routes but the density of the road network as you move away from the cities reduces.

If this is the model for Shaikan then the permeability will be less and the RF is less likely to rise.

A simple analogy but its one I find useful.

Ryder Scott comment on the lack of water being produced at the surface.

They don’t talk about a regional aquifer but should one exist then the ability to maintain pressure in the various reservoirs must mean that the RF will increase.

Returning to Ryder Scott

Ryder Scott is saying that the analysis of the test data from the Sargalu indicates a permeability of 9.8 Darcies and a skin factor of +56.

We now know something about Darcies but what is this term skin factor?

http://www.ogj.com/articles/print/vol-110/issue-8/drilling-production/new-method-evaluates-efficiency.html

Introduction

As a consequence of drilling and completion operations, most wells have reduced permeability near the borehole (skin zone).

At oil-water production the radius of the skin zone increases over time. It is known that reservoir waters associated with oil-bearing formations contain a variety of dissolved solids (scales). At simultaneous production of oil and water, precipitation of scales occurs

In the vicinity of the well the pressure logarithmically increases with the radius. As a result deposition of scales mainly occurs near the wellbore. Due to partial blocking of pores a skin is created whose size increases with production time.

A comprehensive study of the essential mechanisms of formation damage by pore blocking can be found in the literature.1

Deposition of scales in the pores greatly reduces the permeability of formations around the wellbore. This results in pressure loss through the skin and a corresponding reduction in well productivity. Well stimulation through acidizing or hydraulic fracturing can improve well productivity even above production levels in undamaged conditions. Quantitatively, the skin is defined as a parameter (skin factor), which depends on the thickness and the effective permeability of the skin zone2 (Equation 1).

Now that’s interesting as scaling appears to be increased by water being present. But at Shaikan no water has yet been reported and it is thought that the reservoirs may be full to spill.

However RS says that the Sargalu had a skin factor of +56. Whats that mean

http://www.ogj.com/articles/print/vol-110/issue-8/drilling-production/new-method-evaluates-efficiency.html

Here we learn that the permeability is down to 322 milli Darcies. But the oil is light – 59 API – almost a condensate and the well flowed extremely well. There was a much greater GOR, Gas to oil ratio .

Well how does this compare with other mega fields?

GRH pointed to Ghawar in Saudi.

5 major sub sections are attributed to Ghawar

The have reasonably light oil of around 34 API and a permeability measured in MD – around 600- 650 MD on average. The reservoirs have been producing since the 1940s!

So what if anything can we conclude from this short foray?

Well the Shaikan reservoirs appear to be very highly fractured carbonates (Limestones and Dolomites). W knew that. The permeability appears to be world class.

What we don’t know is the extent of these fractures.

Consider a map of Britain.

Add in the motorways

Fill in the trunk roads, the A roads.

Now add in the plethora of B roads

And finally the tiny C roads.

The vast majority of the UK would be covered by a complex inter connected road network which in turn is connected to many arterial route ways. This network is dense.

If the fracturing at Shaikan is like this then I would expect the recovery factor to rise as oil flows down the well defined route ways into the well bore.

There will of course be certain regions say the NW Highlands of Scotland that will not have the density of roads compared to those around our major cities but there will still be some trunk roads and some highways and byways to allow the vast areas of the Highlands to be accessed.

A darcy (or darcy unit) and millidarcy (mD) are units of permeability, named afterHenry Darcy. They are not SI units, but they are widely used in petroleum engineering and geology.

Rock permeability is usually expressed in millidarcys (mD) because rocks hosting hydrocarbon or water accumulations typically exhibit permeability ranging from 5 to 500 mD.

The odd combination of units comes from Darcy’s original studies of water flow through columns of sand. Water has a viscosity of 1.0019 cP at about room temperature.

So Ryder Scott is saying that the analysis of the test data from the Sargalu indicates a permeability of 9.8 Darcies (9800 milli darcies) and a skin factor of +56.

That is HUGE! – Wiki says that rocks hosting hydrocarbon or water accumulations typically exhibit permeability ranging from 5 to 500 mD.

So the Sargalu exhibits 18 times the permeability found in typical rocks.

Again from Wiki.

Permeability

Permeability is a property of rocks and is an indication of the ability for gases or fluids to flow through rocks.

High permeability will allow fluids and gases to move rapidly through rocks

Permeability is affected by the pressure in a rock.

The unit of measure is called the darcy, named after Henry Darcy (1856)

Sandstones may vary in permeability from less than one to over 50,000 millidarcies (md).

Permeabilities are more commonly in the range of tens to hundreds of millidarcys

If we move on to the Kurre Chine A we find that the permeability as measured by Darcys has declined to 5 but this is still 10 times that of a typical reservoir rock.

The viscosity has increased to 39 API as opposed to 18 API in the Sargalu.

Lighter oil was found in the Kurre Chine B.

Here is a 'technical' report from 'Dalesmann' from a few years ago - he comments on the original DGA and Ryder Scott 'Competant Person Reports' - worth reading again.

Dalesmann: Understanding Mr Darcy.

The last Competent Persons Report was back in 2010.

Why so long between updates I hear you cry.

This was the Ryder Scott report, which was technical in nature and hard to understand – well it was for me!

It does however contain some colourful language like ‘’world class”

But world class what?

Here is an extract from page 11

The Completion Test and the Extended Well Test run after the well was cased over the Sargalu, ……..it did suggest extremely high reservoir permeabilities possibly at the high end of reservoirs found in the world.

Well I liked the last bit – it sounds very encouraging.

I understand DST – Drill Stem Test and I understand the difference between porosity and permeability so far so good.

On page 10 we learn a bit more about the tests – its depth – the loss of drilling fluid, the flow rates and the pressure tests.

Ryder Scott then moves on to comment on the Extended well test

We learn that for the Sargalu analysis of the test data indicates a permeability of 9.8 Darcies and a skin factor of +56.

What is all that about?

Well a little bit of googling gives us the definition of darcies.

Slumberger say it should be spelt Darcys but we will let that pass.

Whats a Darcy?

From Wiki

Only started to trawl through old 'stuff' I have squirelled away over many years. May be more interesting snippets to come..............

Regards.

Yes ValueS - ISIS was the first of several problems ( and the worst problem ) we could have encountered.............

But hopefully things are picking up. A lot of positive things have happened since - and ( most importantly ) the the vast majority of the oil and gas is still there waiting to be exploited.

We still need an Erbil / Baghdad agreement.

Please DYOR other scenarios are possible but I hope that this post if it does nothing else, focuses on the upside that remains locked in the company ‘s assets following the CPR.

They are still considerable and can be seen by all.

Still holding :0)

Would love to have the cash to add!

Kind regards

Dalesmann

(i) $2.092 billion can be added to the cash position of the company taking GKP up to around $2.1 billion ($2.33 / share)

(ii) We still retain 50% of our original assets at Shaikan (now diluted to 27%) which due to pending change in classification (by a new cash rich Operator) from 2C —–2P results in a $2 billion valuation of the remaining asset. Using 900m shares in issue this equates to £2.66 as a valuation of the Shaikan asset alone based on the figures contained in the CPR.

(iii) We now have 27% of Shaikan

(iv) We still retain 80% of Sheik Adi

(v) We still retain 40% of Ber Bahr

(vi) We still retain 12.5% of Akri Bijeel.

All of which when looked at through the lens of the CPR have huge upside.

CONCLUSION

If we were to farmin a Major player to the Shaikan block, the upside in term of our financial position and our ability to develop our remaining assets would be considerable and transformational even after the downgrading of expectations following the CPR.

I suspect that sharing in the upside still to be had at Shaikan would include:

1. SH7 Lower Triassic / Permian discoveries

2. Additional barrels in the hanging wall in the North West Corner.

3. An increasing recovery factor

4. An increased fracture porosity

5. (Perhaps) additional reserve barrels after re working / side tracking SH 6

6. An accelerated production due to taking on a major.

7. Something for the 3.3b barrels in the Cretaceous.

This continued involvement would add considerable value to the company over time. The potential upside of Shaikan and particularly at Sheikh Adi would be considerable. I leave you all to do the maths on that.

The thing is, you could reduce my figs by a third and the upside would still be considerable and impact positively on GKP while the freedom that a sound financial position would give to GKP going forwards would be immense.

DEBTS DEBTERS AND BIR

We know from past presentations that GKP has expended around £850 m in its drilling programme particularly in constructing the PF1 and PF2 facilities. They have taken out a corporate bond equal to $350m and this is debt against the company and an additional $250 m is now being sought. So the net figure is around £364 m , lets call it £500 m when the interest payments are included.

I’m not sure if the cost of financing this loan, the interest required to service any bond issue is recoverable under the terms of the PSC – I think that this is likely but need to be convinced on this point. Anyone help with this?

A major taking half of GKPs entitlement would therefore gain £250m in costs already spent approximately equal to one Production Facility.

This equates to $417 m.

So let’s add that on to the bill for 50% of GKPs Shaikan asset – this gives an EV valuation of $1675m + 417m = $2.092 b (This addition pays for the Major’s share of PF1 and PF2 etc)

This then would be added to the cash position of GKP.

The major now has an asset based on the CPR of roughly $4 billion if the additional percentage from the BIR and MOL are actually acquired and added to the 27% gained from GKP. They will have PLENTY of upside left which would allow the net price paid per barrel to be effectively reduced over time (such upside is listed in the conclusion to this post) This, at least to me, would be a good deal for both the Major and GKP.

As noted above the Major would also be entitled to half the BIR. For the purposes of this calculation, the value of those BIR has been subsumed into the $6.16/barrels to be paid to GKP. This would be one of many ways that the price paid per barrel would effectively be reduced.

WHERE DOES THIS LEAVE GKP?

From a cash strapped company we suddenly find that: