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Interview to listen to :

http://www.proactiveinvestors.co.uk/companies/stocktube/1211/canaccord-says-the-falkland-oil-gas-farm-out-deal-is-overall-good-for-investors-1211.html


And FT comment :

http://blogs.ft.com/beyond-brics/2012/06/26/falkland-islands-geopolitical-footballs-going-home/

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Edison International Spa (majority owned by EDF) are very much into natural gas, not something that should be ignored given the likely gas condensate in the southern licenses - and the potential of oil and gas at Loligo.

Gas at Loligo is commercial, being many many Tcf potential - no surprise to see a gas development/production/storage orientated farm in partner.

http://www.edison.it/en/company/who-we-are/group-structure.shtml

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Could we expect a decent upside if gas is discovered?

have the french stopped selling exorcets to the argies?

PS - Absolutely. Loligo is sooooo big that gas, or condensate or oil or any mixture of them will all be commercial.

T1 (the first target of the 5 in Loligo) is expected to be gas, the lower targets of the first drill more likely oil.

Some interesting comments from TB in this write up :

http://www.usanews.biz/2012/06/falkland-oil-and-gas-sells-exploration.html

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Mr P, the markets don't like political instability, or perceived instability, so the argentine problem, though very minor, is still in investor's minds and remains headline news. I am inclined to take more notice of argie sabre rattling than I am of a broker price target of 400p!!! That is a total stab in the dark figure based on assumptions. A duster or two and that figure will be nonsense.
That said, I naturally hope that we all hit the jackpot and that I eventually qualify for a K2 offshore banking arrangement!

Jefferies note today:
"Who is Edison? Edison S.p.A. is an Italian based upstream producer and electricity generator. It has production of c.50kboepd and reserves of 360mmboe. It has 60 concessions in Italy and 23 outside of Italy, including in deepwater environments. Edison is now majority owned and controlled by the utility EDF.

Why the unusual deal structure? The option to farm out was an unusual structure for upstream deals. FOGL states the reason for the option was because Edison was undergoing a corporate restructuring in which EDF took majority control of the company.
High impact drilling beginning in July. We expect BOR’s Stebbing result imminently, after which the rig will move to FOGL to drill Loligo first, likely followed by Scotia. We carry FOGL’s 75% wi in Loligo at 145p/sh risked, 2900p/sh unrisked. Drilling will likely move to Scotia, 36p/sh risked, 725p/sh unrisked although then drilling program is designed to have some flexibility for the second well if Loligo is encouraging with locations selected for either appraisal locations or lookalike prospects to Loligo.
We view this election positively. This farm out provides independent 3rd party industry validation of FOGL’s prospects and will leave the company with sufficient funding for additional follow on appraisal/exploration including possible 3D seismic or drilling. If the wells are drilled to budget, FOGL now expects to have at least $100m in cash remaining after the 2012 program.

Couple more media write ups :

http://www.bloomberg.com/news/2012-06-26/france-s-edf-buys-into-falkland-oil-wells-amid-dispute.html

http://uk.reuters.com/article/2012/06/26/us-falkland-oil-idUKBRE85P06U20120626

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Gee, FOGL getting $40 million off EDF, not to mention that they have reduced the 25% to 12.5%. Sounds like FOGL might be getting the better end of the deal? Why have FOGL decided to reduce the 25% earnings in the south licence area to 12.5% just because the Darwin well result increased FOGL's sp. I don't fully understand????

What does 'pro-rata' mean?

Ask Google

pro rata adjective / adverb
'calculated according to, or as a share of, the fixed rate for a larger total amount.'

Simpler as equal to.

Wow Guy's , a big fat juicy MILLION BUY JUST GONE THROUGH !

Confused as to why the SP is plummeting, while the stock market seems to be rallying

PS , This is strange indeed , i thought this get a good lift of , especially when that one million went through! Could be an overhang of stock to shift ?

BOR AGM presentation link below, was today the AGM.

http://www.bordersandsouthern.com/media/pdf/AGM2012.pdf

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faldiz attended the AGM and these are his notes :



"..............AGM was very lively, with one or two people challenging the limited information coming from the company.

It's a point that has puzzled many of us, but to my mind the following points explain it:

- "how could [an oil major] make a hostile bid without knowing what we have"

- may want to bid for additional open licences

- Board hold about 60m shares between them [more than in any other FI explorer] - want to maximise value

The board is experienced, oil exploration is competitive - they want to keep competitive advantage.


I'm not going to try to reproduce all of the technical detail (there was quite a lot) - hopefully Gramacho and others will fill in, but what I will to is give some impressions:

As to what they have: Darwin (east + west) is 1.88 TCF gas minimum, 2.5 best, 2.88 max.

liquid content: board would not be drawn at this stage, but a chap who has consulted for both BOR and now FOGL was willing in conversation to put it at 50m to 150m barrels per TCF, but most likely around 80-100. which gives us around 200m barrells most likely but range 100 to 420. Commercial needs to be 'in the hundreds" (Obee).

--> my view is it will be commercial. Full analysis 10 weeks from 18th of June, but some results, eg liquids content sooner - perhaps a few weeks.


Some revealing comments

- there will be another BOR campaign, it will be 5+ wells, mixture of appraisal and exploration. (Obee, response to question)

- "they will still be drilling in FI in 40 years time" (Dobson)

- BOR prospects "have best potential i've seen in 20 years in oil industry (mostly BHP)" (Fleming)

- Looking for rigs now

- would have first call on 5th slot, but at moment not certain/available

Burgess and Bute would be order 1bn barrells, if successful.

SP will rise, just wait for fund raising time.............."

HARRYCAT: Where are you getting these figures from????

"We carry FOGL’s 75% wi in Loligo at 145p/sh risked, 2900p/sh unrisked. Drilling will likely move to Scotia, 36p/sh risked, 725p/sh"

I read different figures of 15% chance of a strike on both!!??