The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
The RNS on the 15th of November guided that the stimulation program would start 3-4 weeks hence.
So around 15th of December is when operations are due to start.
I wonder what information a member of this B/B is privy to that enables them to say that "I believe that the kit isn't in place yet?" It may be, and there might be another reason that the operation has not started.
Maybe the operation has begun and we have not been told, to keep a lid on expectations.
Making noise on this B/B is NOT going to affect operations in Argentina move forward quicker.
Do you honestly think that Ms MacAulay or Dr Bessa are influenced even a tiny bit by unfounded speculation??
I look at what is written and wonder why it was said/
I also wonder if senior Management were able to be face to face with them, would they utter the same words.
Thought not, so back to waiting.
We have 5 days to the end of the advisory estimate. Nothing is late as yet, unless someone has a directline to the EMS-1001 wellsite and REALLY knows something.
There is no point predicting an RNS tomorrow or the next day. Statistically you will be correct eventually but up untill then you might appear to be deluded.
The one thing that I do know is that those who have demonstrated a complete lack of patiece would not have lasted a week in an oilfield environment.You, I would contend do not have the charactar or the knowledge, but you already know that!!
WT
abzzba
I really do as an exercise.
But there comes a point when one cannot get anywhere near even a guesstimate without more information.
It does however give one a feel for the possible extent of the prize.
I think that we have gotten there.
50M bbls recoverable estimate from an RNS from Echo should give the SP quite the boost.
After that, a CPR might be really exciting.
But for now to the Ravens @ Chiefs with a good dinner and a better botte of wine!
WT
abzzba
To my mind, the crux is what is the volume (M3) of hydrocarbon beaing Tobifera within the 4-way dip structure that EMS-1001 penetrates. There may be others in the vicinity?
Being fanciful it may only extend in a 2km radius around the well, it may be 5km or apocalyptically extend out 18kms to the Laguna Maria well that produces 300bbls/d
Depending on the 3D siesmic that Echo have, they will be able to estimate that volume then the OIP and recovery factors can be applied and then you van calculate the total volume of recoverable hydrocarbons.
If the field is massive they may require 20 wells (pure guess) to develop and extract, given the pay zone may be 120m.at the centre but peter out at the edges I cannot imagine that the stratigraphiclal trapthat they see, is small, if it was they would not be that excited.
But you can only make an estimate of OIP when you know all of the numbers whch must include the volumetric's.
As investors, we have not ben given that information, but there again I would not expect Echo to have released that information because speculation might be rife, the SP affected and a ton of bricks would land on the heads at Echo.
Also, to drain the resevoir effectively, I think that long horrizontal wells would need to be employed, but that is for another day and another discussion.
This is a vertical discovery well, lets wait and see what has been found!
Geologists and resevoir engineers typically spend 3 years of study on their first degree and 3 years getting their doctorate. What is being done here is "back of a fag packet" calculations without much of the required information or knowledge to come up with a defendable estimate.
So for me, that is the end of my input on numbers, we have our sweepstake, it was fun.
I vote that we let Echo and CGC get on with it!!
WT
abzzba
Ah, a Sunday morning, baiting question that I would be absolutely delighted to answer.
I cannot express it any stronger that in MY mind, I am confident.
About what you might ask?
EMS-1001 will almost certainly flow, this is E&P, and there are absolutely no guarantees.
How much?
We had a sweepstake. and I gave my estimate then, with reasons as t why I chose that number.
It is there in the thread.
The well logs will have been gone over with a fine tooth comb.
Echo and more importantly CGC who have good experience with the Tobifera and they in conjunstion with the experts who were brought in as well (oops, sorry!! lol!) as Schumberger will have gone over all the possiboilities of what might happen. They will have Plan A, then B & C & D...........ad nauseum!
That is what you must do with with a well of such importance.
Echo know that if anything untoward occurs then their competence will be under forensic scrutiny.
Echo (& CGC) have had the thick end of 6 months to examine every "What IF?", almost certainly all will be OK, but you must have contingencies, that is what proffesionals do.
But what I think is of no importance.
For every investor or even potential investor the decision to buy, stay or go is down to them.
Not my opinion or yours or every ramper or de-ramper that seeks to move the SP in their desired direction counts one jot. We must all take full responsibility for our actions and not seek to blame others.
Many, I think on this B/B have never stood in the control room on day 1 of the start up of a hydrocarbon processing facility, let alone on 2 occasions to see it all go pear shaped. The first time I was a sprog, my boss assured me that morning that "it would all be alright!!" He was as wrong as it was possible to be AND I never believed anyone who spouted absolute confidence ever again. This is E&P. things go wrong, and if and when they do, you fix them.
When the instruction is given to flow EMS, you can be sure that many sphincters will be twitching, there may even be a queue for the facillities, that is the real world.
I will not fall into the trap of absolute or utter confidence, that would be moronic. What I am sure of is that the Echo and CGC teams will have done all that they can, and after that it is in the lap of the gods.
Heck, all that they are doing is bringing on a well, how difficult can that be?? LoL!!
WT
abzzba
I would imagine that you would, but no; I will wait and see what Julian estimates and Ms MacAulay posts in the EMS-1001 RNS. I do see it as a conservative number, it can be increased later especially when a CPR is requested.
I see no point in making a prediction without knowing what area the physical extent of the 4-way dip closure encompasses..
Without that information a stab in the dark is pointless, and a little reckless.
Uninformed investors might spend their savings on shares relying a number that I couldn't justify, maybe unlikely but I'm not taking that risk!?!
We must wait!!
WT
abzzba
I am delighted that you've had a bash at the volumetric's
I would disagree with 1 bbl per M3, it will be far, far lower than that and one has to apply a recovery rate of the oil in place (25% is a good number), but you have got the idea.
Potentially, it is massive given some assumptions, Julian and his colleagues will have run low, mid case and high estimates, they would have gotten samples on which they could do porosity and permeability factors (look it up, if you are not familiar) and seen a range of numbers. They would have also checked the potential volumetric's that may be trapped within this 4 way dip structure that was identified on the seismic that resulted in Echo drilling at this precise location. Julian would have then presented a report to Fiona and the rest of the team, time for a lie-down in a darkened room with cool, damp flannels for their foreheads. Given the numbers it was decided to reach out for top quality people to handle the fiscal side and we see that in the recruitment, the dates fit.
ALL they then had to do, was to plan in conjunction with CGC, Schlumberger with assistance from the experts that they told us about, the stimulation program. Julian told us about workshops in London with CGC and experts. I don't think that they did that for the ELM well, good as it is; this was all about the potential of EMS. .
So we, at worst case estimate are a week away from the start of the stimulation on EMS, best case starting about now. It cannot be a coincidence that the "team" are currently in country and we hopefully would concede that all news of late, except the bare minimum has been at a premium. Virtually a blackout.
I would be the first to admit that the evidence is circumstantial but you have to start somewhere.
Barking up the wrong tree, some might say and you may well be correct.
I happen to choose to differ, and it is easy to shoot the messenger from afar without contradictory evidence.
But right or wrong we, within a month will know what EMS might deliver to Echo and ultimately us as shareholders.
And for those who shout and even wail for action, then you probably have no work history within E&P, these things take time, it is better to take an operation ahead slowly and get it right first time rather than rush and have to repeat. And being cautious is cheaper in the long run, always a bonus.
And this might be a subject for the weekends discussion, if you are not getting hauled out to the shops by your better half or being a cut price taxi service for your kids. lol!!
.
You have my input, it is my view and I may be off the mark.
But at least I am prepared to share it and would welcome informed comment.
And success in this world is rarely binary, more one of the 1024 shades of grey.
I really cannot contain myself within the waiting game, more like the child at Christmas who was beside himself to see if Santa had indeed visited and brought him the train set he so coveted!?! It will be soon eno
MrMarkyB
Scale - How big
Volumetric - Really how BIG
Value - light oil worth more than heavy crude
And if you are thinking 100% you are way off the mark.
Get your calculator out, Julian has.
All the required info is out there to make a very approximate calculation, you just have to know where.
Edison have run the numbers, that is why they said...............................on page 1 of their report??
It is like learning another language.
NN
WT
Leeholden44
If you do not understand the RNS's, then maybe E&P is not for you.
You should be capable of understanding the content, it is your £2000 after all.
If you don't buy and for some reason EMS-1001 fails then you will be the smart one, and many on this B/B might envy your caution with 20/20 hindsight.
There again with a big success the SP might be substantial and you miss out.
I suspect that a building society might be your best option,,,,,,,,,,,,,,,,Northern Rock, strike that!! LoL!!
Whatever, your decision.
You never know, maybe the stimulation is ongoing as we speak and an RNS will be in our Inboxes at 7.00 am, Monday morning. You may not have a decision to make as you might be overtaken by events.
I am flummoxed why you are wondering as to invest late on a Friday evening, the working week is over, nothing now left to do except worry that you really might have missed the boat.
Have a good weekend.
WT
Leeholden44
It is my opinion that due to the constraints on extraction companies in Argentina, that they cannot confirm anything substantive until they have produced hydrocarbons to surface.
They, Echo can only reference wireline log indications as to what "might" be in place, I do not think that they can use the "definite article" until hydrocarbons have been physically observed.
As I said, my opinion and it is not out of the bounds of possibility that I am incorrect.
I do not think that I am but each and every one of us should have read all the RNS's from day one, the admission document, the CPR, watched all the interviews and presentations that Fiona has done and the one by Dr Bessa. To invest in Echo without doing at least that and hopefully a shedful of background reading one might come to a conclusion. Then one might decide quite how much of one's hard earned capital one was prepared to risk as this is not only an E&P company but also on AIM. There is risk here, there must be; there is no such thing as a slam dunk. I worked all my career in the Hydrocarbon industry, I saw some drilling disasters in terms of huge amounts of lost capital, technical problems that cost a mid sized fortune to rectify and around me people died in awful accidents.
I personally am as happy as it is possible to be, you may take a different viewpoint, that is your prerogative but one never knows. That includes Ms MacAulay & Dr Bessa, and they are in possession of ALL of the facts and indicators. It would not surprise me if they were not at the EMS-1001 site at the moment, I am aware that the team are currently "in country," Fiona is a geologist as is Julian; and I could not imagine them not wanting to be "there" as IF and / or when the well flows. It will be a huge moment for them as it is their baby, but for us as shareholders a great outcome may have a significant effect some the lives on this B/B!!
That's me done, not had dinner or a glass yet!
WT
MrMarkyB
On the Argentina Update report from Edison (21st August 2018) on Page 12, they state that the Laguna Maria Well is "around 18km from EMS-1001."
I hypothesised last weekend that the hydrocarbon accumulation might have extended from the "regional high" to the Laguna Maria well. We know that production here is 300bbl/d from a 4m zone and invited posters to have a crack at estimates given some assumptions. That was fun!!
What Echo are about to do is to measure what is actually there and our Sweepstakes winner can collect their well deserved plaudits!!
And our SP may go up a penny or two, hopefully.
Roll on the RNS!!
WT
MrMarkyB
Just to keep interest levels up, and for information to new investors, or those with short memories.
21st June 2018 Echo announce EMS-1001
"significant oil column"
"very significant oil column"
"suggests a material and potentially transformational LIGHT oil column"
"very encouraging from a volumetric and value perspective"
"confirming the SCALE of our new oil discovery"
https://ir.q4europe.com/solutions/echoenergy/3748/news/newsArticle.aspx?storyid=13963074
29th June Appointment of Martin Hull, ex Rothschilds
https://ir.q4europe.com/solutions/echoenergy/3748/news/newsArticle.aspx?storyid=13972579
2nd November Appointment of Dr Gavin Graham, 29 year Shell man
https://ir.q4europe.com/solutions/echoenergy/3748/news/newsArticle.aspx?storyid=14113395
Heavy hitters like these do not join what is effectively a mickey mouse mini-cap company unless there is a Big Pot of Gold at the end of the rainbow.
The RNS on the 21st of June, if properly read gives the picture. You need NO MORE.
You cannot use the words Fiona employed without being in full possesion of the facts.
Dr Julian Bessa could not give that sort of mega enthusiastic interview withou knowing what he is talking about.
If they used inappropriate or missleading language, their careers might be in tatters and their stellar reputations ruined.
And Martin Hull our CFO and Dr Gavin Graham would have to have been attracted in by more than a TCF or two of gas.
All my own opinion, but I go on facts; nothing else.
Although I really do enjoy playing with numbers.
Have a good weekend.
WT
WT
abzzba
If EMS -1001 does have a healthy flowrate, that will be terrific.
Echo will know what the extent of the Tobifera is on the block.
I imagine that they would have reworked the available seismic to death, already!!
I think that they would have to drill a number of appraisal wells to delineate the extent of the field, if that is what we have. That will take resources both technical and fiscal, but there would also be pressure to get stuck into Tapi Aike. Could we do both concurrently? Maybe if EMS-1001 could be brought onto production ASAP, funding both would satisfy both aspirations. Who knows?
We are getting to the point when the stimulation program will start, we might even get an RNS advising us of that and even guidance as to how long they estimate that the EMS stimulation operation will take.
So it's sit on your hands time, be patient and keep an eye out for an RNS.
The "fact" that we have been in a bit of a news "blackout" for a while does add to my optimism, but that is my norm!!
WT
trellis35
I bought in the mid-range from CH9dP 2016:
Piedlong
Coudoulet (The N7 separates it from the actual Appellation, so technically a CdR)
Giraud
The Rhone 2017 EP campaign has started, so lots to buy from there.
The vast majority of the best CH9dP 2016 will have disappeared, never to be seen again!
WT
MrMarkyB
What was the date of that report?
WT
I will confess that I know little about Sound except that they have discovered a large gas field in NE Morocco.
13th September, Sound embarks on a "potentially transformational" 3 well drilling program "High impact, de-risking"
Share Price 39P
!9th Nov Ist of 3 wells, announced as non-commercial. Share Price now around 18P
Currently drilling 2nd of 3 well program. Share Price 15P
One might speculate, that if this 2nd well is not successful, then the Sound and Echo SP's might be aligned!!
There is much on the line with wells 2 & 3.
I am not sure that I would want any part in the risks attached.
But who knows, you pays your money,..........?!?
WT
Antrim Energy bit the dust earlier this year.
Overall unsuccessful one might speculate/
WT
My view is quite simple.
We stimulate the 30m perforated interval in EMS-1001.
See how it flows, close in build up etc.
Select another 30m interval, perforate, stimulate as per 1st interval.
Repeat until as much of the Tobifera is flowing as possible and then decide quite what we have got.
Echo have said that bringing this well onto production can happen quite quickly, but I cannot find where I saw that!
Hopefully on EMS-1001 we will not need to preforate the Springhill.
WT
Seriously, jack of all trades.
Allegedly competent in Chemistry, Mathematics, Physics with a soupcon of Biology and some imagination!! LoL!!
You need the last but one bit to have a rudimentary understanding of fossils.
And you forget a lot of it, so keep the books handy.
The most important thing is to be aware that you don't know everything and that you MUST never stop learning.
WT
We know that there would appear to be at least 120m of pay zone at EMS-1001
We know that 300bbs/d being produced from the Tobifera 18kms away.
If you assume that it is the same field and linearly reduces over the 18km.
You might assume that EMS-1001 lies at the centre of the field. (regional high)
You may wish to apply a factor of how much hydrocarbons is contained in every M3 of Tobifera.
You can then apply a conservative recovey factor.
And BoB's yer Uncle, you've got a rough and ready ballpark of how many M3 might be available.
Not forgeting to multiply the answer by 6.29.
Of course, you can make your own assumptions based on what you know.
I like playing with numbers, how about you?
And if you would like to learn how to read geological maps, then this short book will help.
https://www.seoe.sc.edu/segchapter/sites/sc.edu.segchapter/files/attachments/97936453-Geological-Structures-and-Maps.pdf
WT
bigspike
My thoughts are IF EMS-1001 is a BIG producer, then they might perforate another 30m and flow, etc to see quite what the Tobifera was capable of producing. Doing it that way you wouldn't require a drilling rig for a dual completion.
But again, getting ahead of myself.
One step at a time, get it flowing and see the numbers!
WT