.

Hi shortie,

I like to think I am a realist, or at least I try to be, so being as practical as possible and thinking with the head, not the heart, I agree re the success rate of around 16%.
As to a 300% sp rise being more practical than 800% on an oil strike I think it all depends on several issues.
1 The political climate in oil producing countries, especially Iran.
2 The state of the Eurozone, (yes it can only get worse).
3 The type, size and quality of the discovery.

1 and 2 could easily become worse than at present within weeks, never mind a couple of months.

3 of course will be the cruncher.

Post 2131.
Very true Marky, very true.

I think this best way of thinking is : if that strike oil : fine...if not stay put for a year or so.....be prepared for a longterm investment rather than in and out with a bad loss....there are so many prospects that oil, condensate or wet gas will in the end be worth getting out of the ground....or stay on the sidelines and jump in when possible....

Itchy fingers RF?

No.....I reckon that with the results from Loligo coming in a few months plus seismic....the sp will hover around what it is today regardles of a duster from Scotia.....if it is a duster ; then the sp will drop followed by recovery back to present levels....so this drill is priced in for nothing as long as you include a few months wait.....

http://www.globes.co.il/serveen/globes/docview.asp?did=1000787276

It's not how much gas, but where

A new discovery in the Falkland Islands outdoes Israel's Leviathan reserve for size, but that isn't necessarily reflected in the price.

27 September 12 19:20, Amiram Barkat
inShare

First surprise: Israeli gas reserve Leviathan is, as is well known, the biggest deep-water gas discovery in the past decade. Then again, maybe it isn't. Over the Jewish New Year, Leviathan lost the title to a new reserve, discovered on the other side of the world. The reserve is about 100 kilometers east of the Falkland Islands, in a license area known as Loligo. The amount of gas and oil in the reserve has not yet been announced, but, according to preliminary estimates, made before drilling commenced, it could hold 25 TCF (trillion cubic feet) of natural gas, which compares with just 17-20 TCF for Leviathan.

The discovery of a new gas reserve of this order of size in Israeli waters would presumably have sent the Tel Aviv Stock Exchange into hysteria. Take for example the Ratio partnership, which holds 15% of Leviathan. This small partnership, which has practically no other assets besides the Leviathan license, has a market cap on the stock exchange of about NIS 2 billion. This market cap expresses investors' expectations of sales of gas to the domestic market and of exports to countries in the Far East and Europe. What should be the value of a company that holds 75% of a reserve 50% bigger than Leviathan? You can only guess.

Luckily, Falkland Oil and Gas (FOGL) holds exactly those rights in the new super reserve Loligo. As if that were not enough, this anonymous company holds rights in a group of Northern Area licenses (40%) and Southern Area licenses (52.5%) in Falklands waters that have not yet been explored. The next drilling, which will take place in the northern licenses, is meant to discover an oil target that could contain 1 billion barrels.

This is where the second surprise comes in. Falkland Oil and Gas is traded on London's AIM exchange at a market cap of £220 million, which is just $350 million, or NIS 1.4 billion. This valuation also includes a handsome cash balance. In the company's financial report for the first half of 2012, it estimates that at the end of its current drilling campaign, it will be left with cash of not less than $200 million.

It is interesting to note that the company's share price has actually fallen since the first announcement of the discovery. This is because investors had expected the discovery of a 4.7 billion-barrel oil reserve, and were disappointed to hear of the gas that had been discovered instead of the black gold.

Now comes the third surprise: it turns out that the potential of the Falklands licenses has been spotted by on-the-ball gas exploration companies. On August 6, Falkland Oil and Gas announced that it had agreed to sell 35% of the rights in its licenses (except for Loligo and Nimrod-Garrodia) to none other than Noble Energy, the US partner in all the Israeli gas reserves.

Another partner well-known in Israel that was quick to take a share of all the licenses of Falkland Oil and Gas was Italy's Edison, which holds 12.5-25% of the licenses. Edison has also expressed in entering the Israeli market, and it is a partner with Delek Group Ltd. (TASE: DLEKG) in bidding for licenses in Cyprus.

The Falkland Islands are remembered for the war over control of them between Britain and Argentina in 1982. Uncertainty still hovers over the islands in the South Atlantic, and this presumably affects the pricing of the risks in the gas discoveries industry. Other risk factors are the distance from target markets for natural gas, and the stormy ocean that makes operation of floating production and liquefaction installations difficult. But still, even taking all this into account, the Israeli Leviathan gas reserve seems expensive in comparison with its distant Falklands counterpart. That too, however, is relative. Two months ago, we reported on the rights held by Cove Energy in gas results offshore from Mozambique, sold at a price several times higher than the market's valuation of Leviathan. It turns out that pricing of gas reserves is mainly a matter of geography.

Published by Globes [online], Israel business news - www.globes-online.com - on September 27, 2012

Good find Proselenes.
Makes mind boggling figures if it all turn good!

Its very interesting to compare GKP with the potential of Scotia - just for fun.

If you use a figure of 13 billion barrels of the famous GKP "OIP" (Oil In Place).

Run that with license percentage (54%) and Recovery Factor of 22%, but then GKP will only get 8% of the price of a barrel of oil (all PSC terms) - so taking the 8% into account you get :

13,000,000,000 OIP x 54% (WI) x 22% (RF) and times 8% (PSC) = Net "real value" 123 million barrels of oil to GKP as reserves.

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

Now run that calculation through with an 15% low end Recovery Factor for Shaiken, which is possible.

13,000,000,000 OIP x 54% (WI) x 8% (RF) and times 15% (PSC) = Net "real value" 84 million barrels of oil to GKP as reserves.



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


If we run the "Scotia" prospect through the same procedure, well its over 1 billion recoverable barrels - and there is the first difference, expected recoverable is quoted and NOT Oil IN Place.

So FOGL have 40% of a potential 1 billion recoverable barrels (already with RF factored in) and tax totals 35% and oil can be sold at market rates so no discount.

So 1,000,000,000 (RF factored in) x 40% (WI) x 35% (Total tax) = Net "real value" 260 million barrels of oil to FOGL as reserves.



So in real terms, which is all about how much profit you can get out - just Scotia prospect on its own, if its oil, will be 2 times BIGGER than GKP . And thats just Scotia.

The lesson is, never underestimate the effect of PSC terms and taxes - 13 billion barrels of oil in place in Kurdland for GKP ends up less than half the actual barrels you get from 1 billion recoverable barrels in the Falklands - when work in, tax and PSC has taken its toll.

Which is why the Falklands is very attractive for development of finds. Fingers crossed Scotia is the first Southern area oil find, to value it, just double the GKP market cap and apply to FOGL, given the follow on leads on top ;)

"just for fun" :-) .......
let us suppose Scotia is a dud - what happens to sp?
let us suppose that the next campaign also yields nothing very exciting - then what?

let us suppose that israel launches a military offensive against iran - then what?
:-)

Lets say the world ends in 15 mins, then what ? :-))

of course spaceships to take the oil away for processing are two a penny.,.

at least they're out of reach of avocet missiles!

Kurdistan will be right under the all the Israeli and Iranian missiles flying around soon......... oh dear...........

Just show how little "actual" oil GKP have of their own, that a single discovery in the Falklands at Scotia, IF IT HAPPENS, would be double the size of GKP......... LOL.

The GKP rampers fail to mention work in, tax, PSC etc........ wonder why - at worst case 15% Recovery Factor GKP have less than 100 million barrels...............LOL :)

better to have 100mbo than just blue sky!

May be worth a dabble if it drops to c60p, ready for the hype & ramp towards TD?

This was the Noble presentation from 7th September.

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


Few points to note - from one page of it :



They say well before Loligo result that Scotia will be drilled next. A Loligo appraisal was never on the cards once Noble farmed in, they want Scotia drilled.

You will note Noble refer to Scotia as BBbl (that means Barrels of OIL), they also refer to follow up leads of 7 Billion Barrels of Oil.

They also differentiate with "other play types" being a possible 5 BBoe (that means gas).

So Noble are pretty happy that Scotia will be oil, IF it strikes hydrocarbons.

They are pretty well experienced on oil West Africa and know what they are looking for, bodes well.

Twitter @Proselenes

.

Worth a watch :

http://www.youtube.com/watch?v=T8eTiUMBzM4

.

Noble to discuss their deep oil prospects in the Falklands and other places on Thursday 11th Oct. Wonder why they do not say deep "gas" prospects ?? Loligo was expected to be gas, and it was. Scotia is expected to be oil and.... well, lets see......


http://investors.nobleenergyinc.com/releasedetail.cfm?releaseid=711499

October 5, 2012

Noble Energy Announces Conference Call To Discuss New Venture Exploration Opportunities

HOUSTON, Oct. 5, 2012 /PRNewswire/ -- Noble Energy, Inc. (NYSE: NBL) announced today that it will host a conference call to discuss its new venture exploration program at 9:00 a.m., Central Time, Thursday, October 11, 2012.

The intent of the call is to provide insight into several frontier plays where the company has activities in progress - the deep oil potential of the Eastern Mediterranean, the Falkland Islands, and Northeast Nevada.

The webcast will be accessible on the 'Investors' page of the Company's website, www.nobleenergyinc.com. Conference call numbers for participation are 888-401-4691 and 719-325-4766. The passcode number is 5184314.

A replay will be available at the.....................

possibly because Noble do not rate the commerciality of just a gas find

Gas not commercial..... LOL

Are you living on a different planet ?


Here they are spending 65 billion US$ in an attempt to get just 35TCF of gas into production - in a far worse isolated place than the Falklands.

http://www.upstreamonline.com/live/article1267220.ece


Only an idiot would walk around saying the Falklands will not be commercial for gas in the future.