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Proselenes - 13 Jan 2012 13:00 - 107 of 2065

FOGL CoS is not low.


Toroa was 3.8% CoS and it failed.

Loligo, back in 2006, pre CSEM, pre more seismic studies etc.. had a CoS of 11.5% as rated by TRACS (Nov 2006).

At the AGM recently the board said the CoS was now, after all the new work from 2006, at the 20% level for Loligo.

Scotia well, given the excellent sands at Toroa and the implications for Scotia deep well, is also around 20% CoS imo.

cynic, its quite easy really.

Seal / Charge / Reservoir / Structure

If all 4 were 100%

It would be 100 x 100 x 100 x 100 = 100,000,000

If as I suggest for Scotia is 60 Seal / 80 Charge / 80 Reservoir / 60 Structure

Then you get 60 x 80 x 80 x 60 = 23,000,000

So the CoS is therefore 23% (23,000,000 is 23% of 100,000,000).


Its all quite quite simple - nothing complex in it.

hyleo, yes, and Loligo ended up being 100%.

Scotia is around 20% CoS (I think 23%).

Some will quote low, some will quote high - the drill bit is around 50 days from letting you know for real - and then the CoS will mean nothing, only the actual drill results.

CoS means nothing if it finds more gas.

Based on the Tullow "TEN" field offshore Ghana I think it will be either oil, or a mix or oil and condensate.

Loligo is a condensate discovery - thats for sure imo - its just that until they drill a sweet spot and recover "liquids" its classed as a "gas discovery".

The moment they drill a sweet spot and get some liquids then its a "condensate discovery".

C5 is condensate, and Loligo had strong C1 to C5 readings. It it were dry gas you would get strong C1 and C2.

Condensate reservoirs have strong C1 to C5 - which Loligo had.

All they need to do is drill a sweet spot next time around and get some samples and Loligo will be reclassified as a "condensate discovery".

Until a liquid sample is recovered from a better located well, its classed as a "gas discovery" only.

But I will get into all this later when I do the Loligo results post.

throw all the pseudo-science gobbledegook at me that you like ...... in my UNSCIENTIFIC opinion, the odds of FOGL finding anything truly commercial remain no better than 5/1 ..... if there is a momentum trade to be had, then there's a good chance i'll hop in (and out!) ..... if i miss the boat and something commercial is indeed found, then there'll still be plenty of time and money to be made

So its not 16.6% but 23% then. Still doesn't really matter as I wouldn't call this a high rate for success.

If you however you think this is a really good rate and you can't lose then be a good chappy and remortgage your house so you can invest in FOGL...

Shortie, I am fully invested in FOGL, long all the way, thats clear from a long time ago when I was buying in the 40's and 50's.

Here for the whole hog, no selling, lets get that drill bit spinning and see what Scotia holds.

Proselenes...with all due respect : I thought you had sold out....then you must have bought back in heavily....

RF, I did not sell out.

Whats the downside if Scotia is a duster ?

Common question.

By my estimates FOGL will now end the 2012 drilling campaign with cash of 220 million US$ (circa 43p a share cash)

In 2013 circa 33 million will be spent on the 3D surveys and admin, this means FOGL enter the 2014 drilling campaign with 187 million US$.

Of course they might have a lot more than that if Noble farm into Loligo/Garrodia/Nimrod in 2013, however, for now, lets pretend they will not.


187 million US$ going into 2014 - so the downside will be circa 58.5 US cents per share or 35.5 pence per share.

This will mean for 2013 they will be "below cash" for a period of time, until 3D costs and admin catch up to bring cash down as they enter 2014 and drilling is back in the near term horizon again.

So, from today, a Scotia duster will see the share price down 50%. A strike at Scotia and you should be looking at 800% rise given the complex which houses Scotia.

Thats the short term potential for the share price imo.

I'm invested too, holding long futures but only a small part of my portfolio. I've already made a fair profit and expect to exit before the result on my remaining futures.

I'd agree 50% downside risk on a duster. Can you post your calculations for a strike that would give us an 800% increase? I'm curious how you get to this figure and what if any premium you've used.

Anyone got a link to the Jefferies note on FOGL ? If so please advise or send me a mail.

I consider myself very lucky Loligo wasn't a duster and probably won't be staying in until Scotia

A quote that I have a question. Don't worry I'm not saying picky

"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."

Proselenes.. I'm not saying you were wrong on the above, but could you please explain why the above didn't come through.

Thanks

Cortez, its very simple, they have not as yet proved they have net pay. Once they appraise Loligo and prove the sweet spots and prove the reserve base then the share price will respond accordingly.

At this moment in time they have gas, it might be massive BUT as far as the market cares, its not proven to be net pay flowing gas and fluids - and so until such time as it is or is proven it will be, the share price will lag way behind.

That gives you a future value - the process is now about proving up that value with 3D work, sidewall cores and appraisal drill.

Scotia drill off and running!!.. Well on time too, was expecting to be nearer end of week..

Spud RNS

I would suggest its going to be 65 to 70 days well operations. Loligo they said 60 days well operations and were done in 52 days (8 day saving).

Yesterday was 1 day for arrival and set up

Drilling time to TD at Scotia should be in the 45 day to 55 day range.

10 days for clean up and testing

10 to 14 days for P&A operation

1 day for pack up and go.


Expect rumours of gas or condensate or oil or duster to start coming from week commencing Monday 19th of November - that is when they will be through the target and approaching TD, if not already at TD.

Mark it in your calenders now ! Big red "Scotia Result Near" circle around the 19th of November.