.

So many companies putting themselves up for sale - looks like the "concern" that raising money is getting more and more difficult is correct.

Bad news imo for DES and BOR and ARG - who all need to raise cash before doing any more drilling.

No problem for RKH and FOGL - both with plenty of cash.

i'm now back to plague you :-)
yippeezippeedoodah!!!!

Some interesting posts on here since my last comment.
Apparently there is ramping afoot on the Xcite thread, was that directed at me?
For the record, in the month of September, the Xcite thread has 17 posts, on the other hand this thread has 78 posts, of which 25 have been made by Proselenes. If the accusation is correct that he and grannyboy are the same then add another 10 or so.
Ramping on the Xcite thread? At best amusing, at worst, how two faced can a two faced person be?
Best buy Xcite, it's going up. Even if it doesn't go up anymore, it won't crash by 50% like this will when it it comes up dry or with a gas find.
It's very Xciting. Ta da

A lot of people may not think, when I say FOGL's top 100 prospects, that FOGL has a prospect hopper of over 100 leads/prospects.

They are probably familiar with only the map below - which simply highlights the shortlisted ones, for now.




However, this is the map below where the top 100 prospects/leads were displayed - and shows just how many prospects/leads there are - and there will be more to come to add to this once 3D seismic is done later this year/early next year.





Enjoy :)

Just how big are FOGL's licenses ? Well look below (they have been trimmed a little since this graphic was done, but not by much !!)




.

Updated 7th Sept.

Apart from GMP comparison I thought I would run my calculations against the prices being quoted for Mozambique offshore gas. The Falklands has a better tax/royalty regime than Mozambique by a few percent, and also the Falklands allows much more costs to be reclaimed via tax deductions - so overall its more attractive fiscally in the Falklands, but anyway.

Mid case 45 TCF recoverable (between 30 and 60) based on link below.

http://articles.economictimes.indiatimes.com/2012-06-11/news/32175164_1_gas-discoveries-mitsui-e-p-miozambique-lng

45 TCF mid case - 3 billion US$ for 10% as per link below

http://www.businessweek.com/news/2012-09-05/dhoot-said-to-seek-3-billion-for-africa-gas-block-stake

10% of 45 TCF recoverable is 4.5 TCF

3 billion US$ for 4.5TCF = circa 666 million US$ per TCF


Loligo 25 TCF recoverable on a P50 basis.


25 TCF with 75% ownership = 18.75 TCF net to FOGL recoverable.


18.75 x 666 million US$ = 12.48 billion US$ = £7.9 billion

£7,900,000,000 divided by 320m shares in issue = £24.68 per FOGL share for a full on gas discovery at Loligo


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I thought I would run my calculations against GMP - who did a report earlier only based on the T1 shallow reservoir.

GMP report is here : http://cgxenergy.ca/cmsAssets/docs/analysts/GMP%20Securities/GMP-Dec15-11-2012ExplorationThemes.pdf

GMP report is based on 60% work in (FOGL having 60%) and only on the T1 reservoir based on 1509 mmBOE (1.509 Billion Barrels of Oil Equivalent (Equivalent as based on most likely gas find in T1 shallow of 9TCF recoverable = 1.509 Billion BOE). It excludes T1 Deep/Trigg/Trigg Deep/Three Bears.

GMP come up with unrisked 3176p per share just for the T1 reservoir - but we must allow for the placing in 2012 which was to ensure FOGL could drill Loligo Deep and go through all 5 targets.

3176p a share just for T1 shallow (60% WI) was based on 208m shares in issue. There is after the Jan 12 placing now 320m shares in issue, so the figure needs reducing to 2064 pence per FOGL share for just T1 shallow target.

However, its not a 60% WI, it was put back to 100% and then farmed to EDF via Edison SPA - so the FOGL WI is now 75%.

So 2064 pence per share for just T1 shallow with 60% WI, becomes 2580 pence per FOGL share with the 75% WI.

So GMP value a T1 shallow (excluding T1 Deep) strike at Loligo on a 1.509 BBOE P50 basis at 2580 pence per share (thats 25 pound and 80 pence per share).

GMP actually make my calculations look very conservative, but that is what I wanted my calculations to be - very conservative. I have used lowball US$ figures per barrel for oil and per TCF for gas - GMP are using around 8.5 US$ figure in their calculations.

(For very simple conversion 1 TCF recoverable = 160 MMBOE recoverable or
1 BBOE recoverable = 6 TCF recoverable)

The barrel of oil equivalent (BOE) is a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil. The BOE is used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure.





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--------------------------------------------------------------------



My earlier "very conservative" calculation post.




Final Version :

Luckily FOGL have retained 75% of Loligo, otherwise I would have had to re-work this.

A very rough guide on what success, IF ANY, has in terms of monetary value. Given this mornings Noble farm in I would suspect Noble will farm into Loligo as well, but only after drilling results and any success - allowing FOGL to monetise success very quickly.



Loligo - Interpreting the results of the drill


Loligo is 75% FOGL and 25% Edison SPA (EDF), as according to the recent farm in deal.

First up one should consider the strategic importance of Edison SPA as the farm in partner. Edison are highly experienced in gas and oil exploration/production/distribution. You can see there latest gas PDF brochure on the below link :

Edison SPA (majority owned by EDF)

15.2 billion cubic meters of available natural gas supply. Edison accounts for 19.60% of Italy’s demand for natural gas, 83 concessions and exploration permits in Italy and abroad, 3 natural gas storage centers, 1 LNG terminal, 49.8 billion cubic meters of hydrocarbon reserves.


http://www.edison.it/media/brochure-edison-gas2012.pdf


As can be seen, Edison is a major part of the Italian energy supply system, and its parent company EDF is majority owned by the French government. This brings both the Italian and French governments in with the UK government as having direct opposition to any Argentinean harassment, add on an upset Spanish government over the nationalization of YPF (stealing it from Repsol) and you are seeing a clear picture of major world powers all becoming aligned against Argentina.

.


In the South Falklands Basin the weather/sea conditions are similar to the Norwegian North Sea / West of Shetland. Water depths are not extremely deep (Loligo is around 1400m water depth) and most targets are shallower than 1500m water depth.

However, owing the remote location the criteria for a commercial discovery is higher than it would be elsewhere in the world.

Before proceeding some companies quote OIP or GIP figures (these are Oil in Place or Gas in Place figures and are not the same as "recoverable barrels" or "recoverable gas" which is the Oil or Gas figure after the "recovery factor" is applied. Owing to decent reservoir formations one assumes a 32% oil recovery factory and a 50% gas recovery factor on the OIP/GIP figures)


Oil - a find needs to be at least 200 million barrels recoverable to be commercial as a stand alone project. Smaller sizes that this would only be commercial when tied into a bigger development nearby. In reality to gain maximum value from a discovery it needs to be 400 million recoverable barrels in size - owing to economy of scale, the larger the find you hit a point at which its very attractive to develop, as opposed to being able to develop and make money, you come into being able to develop and make a lot of money.

Gas - a find needs to be at least 5 TCF recoverable to be commercial as a stand alone project. Smaller sizes that this would only be commercial when tied into a bigger development nearby. In reality to gain maximum value from a discovery it needs to be 10 TCF recoverable in size - owing to economy of scale, the larger the find you hit a point at which its very attractive to develop, as opposed to being able to develop and make money, you come into being able to develop and make a lot of money.

Condensate - no idea on this. Condensate is more complicated as there has to be gas re-injection in order to gain the maximum recovery of the oils. If you produce the gas and remove it then very soon the well will stop producing condensate and the total recoverable condensate will be very low. You have to therefore re-inject the gas back into the reservoir to maintain pressures so that gas again lifts the condensate out. Condensate often trades at higher than Brent crude per barrel - but its extraction costs are higher than oil due to the processes needed.


MAKE NO MISTAKE AT THIS POINT - LOLIGO IS A 4.7 BBOE recoverable target - thats 4.7 billion barrels of "oil equivalent" that are recoverable based on P50 estimates. THE UPPER TARGETS WILL LIKELY BE GAS - and owing to their mammoth size very commercial as well (which is why Edison SPA farmed in and Falklands gas via LNG could be a major part of Italys future energy supply) - the lower targets could be oil or could be more gas.

As FOGL are drilling well away from the high pressure/temperature area of the Southern South Falklands, they are drilling in the Northern South Falklands, there are no undue concerns about high pressure as was seen by BOR who were drilling in the high pressure Fold Belt area of the Southern South Falklands.


Loligo's 5 targets :


OIL BASIS - This is the LEAST likely end result, IMO.


T1 = 1509 million recoverable barrels - P50

T1 Deep = 644 million recoverable barrels - P50

Trigg and Trigg Deep is 969 million recoverable barrels - P50

Three Bears = 1588 million recoverable barrels - P50


Based on Sea Lion of RKH and therefore using a 4.7US$ per barrel valuation and taking 75% of that for FOGL's share and 320 million shares in issue.

T1 = 1509m*75%*4.7/1.55/320m = £10.72 per FOGL share value if P50 size oil
T1 Deep = 644m*75%*4.7/1.55/320m = £4.57 per FOGL share value if P50 size oil
Triggs = 969m*75%*4.7/1.55/320m = £6.88 per FOGL share value if P50 size oil
3 Bears = 1588m*75%*4.7/1.55/320m = £11.28 per FOGL share value if P50 size oil

If all targets are oil, based on Sea Lion price - potential £33.45 per share.

As FOGL already have a farm in partner and reservoirs are going to be, if there, large massive thick sandstones and simple to develop the price should be higher than Sea Lion's 4.7US$ per barrel, however, I will use that for now to be conservative.

--------------------------------------

GAS BASIS - this is a VERY POSSIBLE outcome to the well on success.


T1 = Circa 9 TCF recoverable - P50

T1 Deep = Circa 3.8 TCF recoverable - P50

Trigg and Trigg Deep is circa 5.8 TCF recoverable - P50

Three Bears = Circa 9.5 TCF recoverable - P50


Based on Cove's (COV) sale and therefore using a 513 millions US$ per TCF recoverable and taking 75% of that for FOGL's share and 320 million shares in issue.

T1 = 9*75%*513mUS$/1.55/320m = £6.98 per FOGL share value if P50 size gas
T1 Deep = 3.8*75%*513mUS$/1.55/320m = £2.94 per FOGL share value if P50 size gas
Triggs = 5.8*75%*513mUS$/1.55/320m = £4.49 per FOGL share value if P50 size gas
3 Bears = 9.5*75%*513mUS$/1.55/320m = £7.36 per FOGL share value if P50 size gas

As FOGL already have a farm in partner and reservoirs are going to be, if there, large massive thick sandstones and simple to develop the price should be higher than Sea Lion's 4.7US$ per barrel, however, I will use that for now to be conservative.

If all targets are gas, based on COV price - potential £21.77 per share.


----------------------------------


GAS UPPER, OIL LOWER - This is the MOST LIKELY end result on success, imo.


Most likely outcome, if successful, would be IMO, gas in T1 and T1 deep, gas in Triggs and a bonus API 18+ oil discovery in 3 Bears.

This combo of oil and gas would give as below, if all were successful and P50 size.

T1 = 9*75%*513mUS$/1.55/320m = £6.98 per FOGL share value if P50 size gas
T1 Deep = 3.8*75%*513mUS$/1.55/320m = £2.94 per FOGL share value if P50 size gas
Triggs = 5.8*75%*513mUS$/1.55/320m = £4.49 per FOGL share value if P50 size gas
3 Bears = 1588m*75%*4.7/1.55/320m = £11.28 per FOGL share value if P50 size oil

Total gas upper/oil lower result = Potential £25.69 per share.


The strategic importance of having Edison SPA on board now in the farm in is very clear. Had FOGL discovered gas, as is to be expected in the upper zones, then they would, like RKH and the small and complex Sea Lion, had to probably accept a low ball offer to get the project moving.

With Edison SPA on board and their expertise in gas FLNG, storage, transportation and with them having a market already which needs much more LNG pumped into it, as in the earlier PDF, any gas discovery with over 5 TCF recoverable in size is likely to get developed. If T1 and T1 deep come in as gas as is expected then immediately Loligo is well past the 10 TCF threshold at which it becomes very commercially attractive to develop, meaning we would see pretty quick development of Loligo imo.

The joker in the pack is Three Bears, this will be the last reservoir target to be drilled and could well be the one that contains the oil there - exciting that if T1 and T1 deep are gas, we have a commercial success and then we have the icing on the cake possibly down below that. If T1 and T1 deep fail, there is still the big one down below to save the day.

Obviously if they have a duster then its a duster and none of the above matters, but it should act as some sort of rough guide with which to value success on a reservoir target by reservoir target basis, be it gas or oil.



Drill hole / casing of the Loligo Well below :




Drilling depths (below mud line - actual drilling depths) rough comparison between RKH Sea Lion well and FOGL Loligo below :




As Loligo has 4 independent potential "company making" targets (putting Trigg/Trigg Deep together as one) I fully expect them to make multiple RNS announcements of progress during drilling, and not just a single one at the end. Had there been a main target and some small secondary ones then yes, maybe one RNS, but with 4 potential company making finds on the way down, I expect updates to come as drilling progresses. The first 2 targets, T1 and T1 deep are under half the actual drilling depth from sea bed/mud line that the Sea Lion main fan was for the RKH drill, so I expect some news fairly soon, perhaps in 3 weeks or so.

The values for oil in the ground and gas in the ground are low, imo, but its worth starting there at low points to please the bears a little.



As ever, all is IMO, NAG, DYOR !! etc..

If you look at the original 100 leads




And then compare to how the license area's have been trimmed down over the years - you can see they pretty well kept all the bits with leads/prospects in and "returned" the bits with no leads in.

FOGL are of course well connected to many influential Falklands people, and have done a grand job retaining the best bits over the years........ :)


License area's now (but of course not 100% now following the farm outs to Edison and Noble).



.

a further upwards chug likely by XEL ..... at least they have some FACTS to disseminate

I c Mr P started his ramp at 3 in the morning........all old stuff re hashed......yarn

Thanks once again Proselenes for taking the time to put up the research(figures and the potential) and the maps,which is very interesting..

You'l now get the usual moaners coming on griping!!..

Yes there we are, TWO already...

same old carp put on every thread he can on the internet

does old carp smell as badly as old crap?
btw, i see the shovel man is following the horses again

There you go!! "They don't like it UP UM Capt Waring"

Tweedle dee! Tweedle dum!!..

Yes and you know where the mulched up material goes then don't you two?!!!!..

On the vegetables.. Turnips and Cabbages...Feeling any of the benefits yet tweedle dee, tweedle dum?....

i'm having another WONDERFUL day on the markets, with FOGL not helping at all ...... and we make a lot of our own compost here, which gets used on the potatoes, beans, tomatoes, chard etc as well as on the flowers

With all the focus on the currently being drilled Loligo structure its easy to forget that Noble have no farm in on Loligo or Nimrod - their farm in excludes these - and Noble are very excited about the Scotia drill.

Noble Energy presented yesterday, 7th Sept (2012 Barclays CEO Energy-Power) and their CEO was quoted as being "very excited" by the potential of the Falklands.

Their full presentation is available to download on the below link.

http://www.nobleenergyinc.com/_filelib/FileCabinet/PDFs/Presentations/2012_09_September_books_FINAL.pdf



Page 39 as below link is for the Falklands. Note that "two 3D seismic surveys are scheduled for early 2013" !!!







Media coverage of Chuck's comments below :


http://www.bnamericas.com/news/oilandgas/noble-pegs-gross-unrisked-potential-at-12bboe


Noble pegs gross unrisked potential at 12Bboe

Falkland Islands | Oil & Gas
More Oil & Gas news

Published: Friday, September 7, 2012

By Abigail Wilkinson
Business News Americas

Noble Energy (NYSE: NBL) sees 12Bboe of gross unrisked resources on the Falklands Islands acreage it gained through a farm-in deal with Falkland Oil and Gas (AIM: FOGL).

"When we look at just our top 10 Cretaceous leads over this region, we see about 7Bb of gross unrisked resources," CEO Chuck Davidson said during a presentation at the 2012 Barclays CEO Energy-Power Conference.

Another 5Bboe of gross unrisked resources comes from other play types within the 10mn acres which Noble has access to under the deal, announced August.

Noble agreed to farm into FOGL's northern and southern area licenses for a 35% interest, excluding the Loligo and Nimrod-Garrodia areas, with Noble committed to spend between US$180mn and US$230mn over the next three years.

The first prospect to be drilled under the deal, named Scotia, will be drilled in the fourth quarter and has around a 20% geologic chance of success and is estimated to hold 900Mb gross unrisked mean resources, according to the presentation.

"What really gets us excited is that it is scale, and it is multiple opportunities," Davidson said of the farm-in acreage. "It's a little bit out of the normal neighborhood and we really believe it could open up a whole new basin."

The Falklands is one of the firm's three significant areas lined up for testing this year, with the other two prospects named as deepwater Gulf of Mexico and Cameroon, testing gross mean resources of about 1Bboe.

And do not forget the other farm in partner - who are "spearheading" EDF's gas strategy, which is very relevant to Loligo and the expectation of gas in the upper targets, of which the P50 estimate is over the 5 TCF recoverable needed to be commercial.


Edison SpA

Company Profile

Edison S.p.A., directly and through subsidiaries, generates and sells electricity and explores for, produces, and distributes natural gas.

How could anyone possibly forget anything about your favourite stock of the moment? You never stop posting the same thing over and over and over and over and over and over. You must win the gold medal for being the most boring man alive.

I am making every single ounce of available information "available".

I do not ask any to buy or sell - all I do is put all the information out there so people can be, if they want to be, fully informed and make their own decisions.

There is going to be considerable attempted ramping and deramping of this on various BB's - one way to stop that is to ensure everyone has access to all information, as much as is available to a non-insider.

So therefore yes, I do post a lot, but the reason is to ensure that everyone, if they want to, has access to the information.

If you do not want to read it, "squelch me" - simple as that, you'll never read another post I make then.