.

From Merchant Securities, and I agree very much with the last part ref-FOGL


Borders & Southern Petroleum (BOR.L) Oil & Gas
UNDER REVIEW

Darwin well makes gas condensate discovery

Borders & Southern announced a “significant gas condensate discovery”. Good hydrocarbon shows were encountered from 4,633m down to 4,810m. Net pay of 67.8m was encountered (above the 55m pre-drill estimate). Average porosity is 22%. The company will be able to comment on the liquid content of the reservoir after fluid samples are analysed.

The question now becomes one of assessing whether the liquid content in the gas will be sufficient for the reservoir to be commercially viable on a liquids-only basis. We are very cautious about arriving too early at a positive conclusion for the commerciality of the condensates. At present, we are reluctant to ascribe value to the gas discovery. We keep an open mind for this eventuality, especially given the excellent quality of the reservoir (high recovery rates) and the liquids rich nature of the gas.

; The presence of condensate confirms that the South Falkland basin is conducive to the generation of liquid hydrocarbons. However, due to the close proximity of the Darwin and Stebbing prospects we believe that the probability of finding gas condensate at Stebbing has increased and the probability of finding black oil has decreased.

The read across for Falkland Oil & Gas is somewhat more positive to the extent that the larger scale prospects of Falkland Oil & Gas would make a liquefied natural gas project more viable. We also note that Falkland Oil & Gas has prospects which are deeper into the area that is conducive to oil generation.

My long spreads are still in profit although not as nicely as Friday... Brokers say buy, markets selling off. Onto Stebbing, lets hope the result here is somewhat better..


Dr Dougie Youngson at Seymour Pierce said:
Borders share price has seen a massive increase over the past week in anticipation of a positive result from this well. We feel that the market will be disappointed by the fact that Darwin is not an oil discovery. Commercialisation of a gas asset will be very difficult with LNG being the only real possibility given the limited size of a domestic gas market on the Falkland Islands. A minimum resource base of at least 5trn cubic feet of gas would be required to support such an LNG project.

We feel that despite a positive result at Darwin, the ambiguity over the composition of the hydrocarbon ratio ahead of completion of the wireline logging may result in profit taking today, particularly given the increase in the share price last week. We are therefore putting our buy recommendation and target price under review whilst we update our model to take into account today's results.


Analysts at Fox Davies were also cautious:
A technical discovery is a long way from a commercial discovery, and ... if predominantly gas the find will have a long wait for commercialisation, if it is commercial at all. A gas find will not be what the market is looking for, and there may well be weakness in the share price as a result.


Merchant Securities said the presence of condensate confirmed that the south Falkland basin was conducive to the generation of liquid hydrocarbons, but added:

Due to the close proximity of the Darwin and Stebbing prospects we believe that the probability of finding gas condensate at Stebbing has increased and the probability of finding black oil has decreased.


Canaccord Genuity pointed out that the company was likely to want to expand its exploration programme, which would imply it would need to raise additional funding.

Hydrocarbons from 4633M to 4810M = 177 meters of hydrocarbons.

MAIN reservoir was 84.5 meters thick with net pay of 67.8 meters.

So what about the other 92.5 meters........ is there going to be another RNS when wireline is complete with a secondary reservoir ? And what does that contain ?? Is there a "Sun" second reservoir ?

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


...........Borders & Southern (AIM: BOR) is pleased to announce a significant gas condensate discovery.

Well 61/17-1 was drilled to a total depth of 4876m and came in very close to prognosis. As predicted, the strong AVO anomaly represented a porous sandstone reservoir containing hydrocarbons.

Whilst drilling, the well encountered good hydrocarbon shows from 4633m down to 4810m. The main reservoir interval, comprising good quality massive sandstone, was found to be 84.5m thick with net pay of 67.8m. Average porosity for this interval is 22%, with maximum values reaching 30%.

Fluid samples from the reservoir have been recovered and will be brought back to the UK for analysis. Once the lab analysis is complete and the results integrated with other data collected from the well, the Company will be able to comment on the liquid content of the reservoir.............

I'm reading it as the other 92.5 meters must have been reduced to no porosity as a mention of good seal was also present!

34 meters of oil, from 4776 to 4810 meters is my guess.

Wait for wireline to be complete, secondary oil bearing reservoir is there, IMO.

Lets see.

Bor market cap still far to high at 400 mill for maybe huge amounts of gas condensate.

Even if there is plenty who wants it?

Pro can ramp and ramp but your flogging a dead horse,if you want a share which has already found huge amounts of gas condensate then buy ARG with a market cap of only 37 mill.

Good chance the next prospect will be gas as well.

Shortie, they say wireline is not complete, meaning the bottom section is not yet done.

Wait and see, could be a surprise here.............

consensus above is that the chances of finding OIL at Stebbing have DECREASED, and it's a matter of fact that it is OIL that is needed as LNG from that distance etc does not sound a commercial proposition

I have purchased more around the 87p level.

Expecting more news on "completion of wireline" and maybe oil down below 4776 meters........ :)

Money where mouth is.

good luck old son, but my read of the so-called experts is that oil is most unlikely

It could be what the share price needs at the moment a good charting >>>> Double Intraday Bottom

certainly the selling pressure has dried up with bid/offer almost matched

Glad I purchased some at 87p :)

http://www.gazprominfo.com/articles/condenced-gas/

why not take a quick 10% profit?

Pro can bang on about this condenced gas but who wants it? where is the market for it?

LNG is actually very interesting, and it's assuredly a major power source for the future, and starting already with a bang, if you'll excuse the pun ..... however, it's one thing to have LNG available from qatar and khaz and russia etc etc, where pipelines are the most common method of moving it to centres in another country, but a different kettle of fish if you have to load it into LNG-container vessels in the south atlantic

Summary of the BOR broker comments today.



From Merchant Securities, and I agree very much with the last part ref-FOGL


Borders & Southern Petroleum (BOR.L) Oil & Gas
UNDER REVIEW

Darwin well makes gas condensate discovery

Borders & Southern announced a “significant gas condensate discovery”. Good hydrocarbon shows were encountered from 4,633m down to 4,810m. Net pay of 67.8m was encountered (above the 55m pre-drill estimate). Average porosity is 22%. The company will be able to comment on the liquid content of the reservoir after fluid samples are analysed.

The question now becomes one of assessing whether the liquid content in the gas will be sufficient for the reservoir to be commercially viable on a liquids-only basis. We are very cautious about arriving too early at a positive conclusion for the commerciality of the condensates. At present, we are reluctant to ascribe value to the gas discovery. We keep an open mind for this eventuality, especially given the excellent quality of the reservoir (high recovery rates) and the liquids rich nature of the gas.

; The presence of condensate confirms that the South Falkland basin is conducive to the generation of liquid hydrocarbons. However, due to the close proximity of the Darwin and Stebbing prospects we believe that the probability of finding gas condensate at Stebbing has increased and the probability of finding black oil has decreased.

The read across for Falkland Oil & Gas is somewhat more positive to the extent that the larger scale prospects of Falkland Oil & Gas would make a liquefied natural gas project more viable. We also note that Falkland Oil & Gas has prospects which are deeper into the area that is conducive to oil generation.

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

Part of the Canaccord note:

"The overall structure is large and the seismic anomaly covers 26km2, so the company believes Darwin East is likely to contain significant volumes.
The well will be shortly plugged and abandoned and the rig will then move to the Stebbing location for the second well in the programme, which we expect to take 45- 60 days to drill.

The discovery of hydrocarbons to the south of the Falkland Islands is a very positive step. However, there is clearly much to do to understand the liquids content of the samples and this find, and then to extrapoloate that information to the other nearby prospects and leads. That process is likely to take several months. In the meantime, the market can only speculate on the possibility of Darwin being a commercial discovery. What is certain, is that the company will seek to expand its exploration campaign (perhaps this year, but certainly next) and will likely need to appraise the Darwin East discovery. That would imply additional financing will be required. Investors may want to wait for that, or at least greater clarity on the find.

Valuation at present is nearly impossible. However, given the potential of Darwin and the remaining portfolio, we believe a revised and increased target price of 150p/share is reasonable (previously 100p/share). That equates to around 225 mmbbls contingent liquids resources based on the current market rating for Rockhopper (US$4.5/bbl)."

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

From FD's daily monitor:

Borders and Southern (BOR LN, 100.5p, ▼ 23.3%) - Oil? Gas? Does it Matter:

Today's news is a terrific technical success, and one that the Company should be proud of; they announce the arrival of a new hydrocarbon basin, the South Falklands Basin ("SFB") and given that it contains gas and condensate, these results suggest thermal maturity (thermo genic gas opposed to biogenic gas which tends to be drier). Now for the cloud with the silver lining.

A technical discovery is a long way from a commercial discovery, and while the shares will be marked upwards, as they have been already, if predominantly gas the find will have a long wait for commercialisation, if it is commercial at all. On the back of this news, we are raising our price target from 150p to 220p and reiterating our BUY recommendation, but proffer a note of caution.

A gas find will not be what the market is looking for, and there may well be weakness in the share price as a result. In this news:

Good hydrocarbon shows from 4,633m down to 4,810m

The main reservoir interval, comprising good quality massive sandstone, was found to be 84.5m thick with net pay of 67.8m.

Average porosity for this interval is 22%, with maximum values reaching 30%.

Fluid samples from the reservoir have been recovered and will be brought back to the UK for analysis.

Once the lab analysis is complete and the results integrated with other data collected from the well, the Company will be able to comment on the liquid content of the reservoir

Too early to give an accurate resource estimate, but this large simple structure
Seismic amplitude anomaly measuring 26sq km


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


Target price upgrade to 450p a share.

Borders & Southern – Darwinian revolution....Mirabaud

Today Borders & Southern Petroleum announced a basin-opening gas-condensate discovery at the Darwin East exploration well – the first ever deep water well in the South Falkland Basin (SFB). Borders’ 61/17-1 well encountered 68m of net hydrocarbon pay in a good quality (up to 30% porosity), shallow marine reservoir which corresponds directly to the area of high amplitude identified on 3D seismic data pre drill.

Although the exact liquids content of the discovery remains unclear at this stage, the structure covers some 26 sq km and our back-of-the-envelope calculation suggests the field could contain c.480 mmboe of recoverable condensate and gas. Furthermore, looking forward there are numerous lookalike prospects across Border’s acreage with similar structural and seismic attributes that have been materially de-risked as a result, and we would point to the success of explorers offshore East Africa as an example of how a string of remote gas discoveries can lead to the creation of very substantial value utilising a cluster LNG approach.

Overall, we view the results of Darwin East as a promising start to the current SFB drilling campaign and maintain our BUY recommendation on an upgraded target price of 450p/shr – offering some 266% upside to Friday’s close.

sorry MrP, but noises off sound more like the rumble of the tumbril than the oil barrel being rolled out

It will be interesting when BOR complete the wireline.

The market has now done its worst on BOR - so anything else announced will all be considered upside.

If the remaining 92.5 meters has more net pay of condensate, or even oil below 4776 meters - then this is all now bonus upside.

The media leaks at the weekend could allow BOR a nice advantage in that they can peacefully finish off wireline and any additional net pay or oil, will be seen as a bonus in and "Completion of Wireline" RNS.

And if there is nothing more, well, the market has priced that in already.