.

Pretty much what we know, big gas kick, results next week. Was it a gap cap on top of oil...... or more condensate/gas ? Find out soon........

http://www.pandjenergy.co.uk/


............“A strategically important exploration well being drilled to the south of the Falkland Islands is expected to complete within the next 10 days or so.

Rumours are circulating stock market boards that the rig Leiv Eiriksson has encountered hydrocarbons while drilling Stebbing for Borders & Southern. They include that a large gas kick occurred, leading to a pause in drilling operations.”.........

Business-as-Usual-for-Big-Oil-Despite-Falkland-Tensions.html

Business as Usual for Big Oil Despite Falkland Tensions

By Jen Alic | Thu, 05 July 2012 22:44 | 0

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more. Click here to find out more.

While tensions between Britain and Argentina have been rising as a natural response to the 30th anniversary of the Falkland War, oil is the primary driver of a renewed Falkland dispute that will determine the fate of tens of billions of dollars in black gold.

At the same time, while Argentine President Cristina Kirchner and British Prime Minister David Cameron are trading serious barbs over the sovereignty issue, big oil companies are largely ignoring the implications and conducting business as usual.

The Falkand Islands (Islas Malvinas) were reclaimed by the British in June 1982 after a 74-day war in response to an Argentine invasion. Argentina lost 649 troops in the war, while the UK lost 255 troops. The 30th anniversary of this war coincides with some major oil developments, which the UK is hoping to resolve by supporting the Falkland government’s holding of a referendum on its political status in 2013.

Argentina is on the losing end of this battle. Not only will the referendum favor the status quo, but Kirchner’s recent move to nationalize Argentina’s interests in Spain’s Repsol oil company has lost her any support she might have enjoyed (particularly from Spain, France and Italy) over the Falklands issue.

This is exactly what big oil is banking on, and recent months have seen some significant developments that seem to ignore the brewing tensions entirely. Two major discoveries are set to turn the Falklands into a key oil player almost overnight. The first, and less significant, is the 1.3 billion barrel discovery by Rockhopper’s Sea Lion (RKH) in the north Falklands Basin. The second is the 4.7 billion barrel prospect of Loligo, for which FOGL plans to start drilling its first well this month.

The Loligo prospect was boosted by news that came in the first week of June that Edison Spa, an Italian utility bought by France’s EDF in June, will acquire a 25% interest in northern licenses of Falkand Oil & Gas and another 12.5% interest in FOGL’s southern licenses. The significance of the Edison Spa deal is that it will provide FOGL with some much-needed financing to get things under way in Loligo. In return for the licenses, the utility company will fund FOGL’s drilling to the tune of $50 million and hand over another $40 million in cash.

The oil angle to the Falklands dispute gained momentum in 2010 when the UK authorized prospecting, provoking the ire of Argentina. The next major uptick in the ongoing crisis came in December last year, when Rockhopper revealed that its Sea Lion field held more oil than expected. This in turn led to an immediate increase in interest in the Falklands’ offshore oil prospects. The UK moved quickly to ensure the security of these discoveries by sending in naval units, prompting a harsh response from Argentina and escalating the crisis.

But the UK holds most of the cards. Not only will “Falklanders” vote to remain a self-governed overseas territory of the United Kingdom in a referendum, but Spain, Italy and France in particular have no sympathy for Argentina in the aftermath of its decision to nationalize its Repsol interests. Oil exploration is proceeding as if the dispute is resolved.

So with the oil momentum already picking up an irreversible pace, how will the sovereignty dispute be resolved? As far as the UK is concerned, it will not negotiate the issue before the United Nations unless it is asked to do so by the Falklands legislature, which is happy to hold a referendum. The results of the referendum will provide the UK with any ammunition it needs.

Argentina’s only real recourse here is military. We can expect a great deal of bluster on the issue and some high-minded rhetoric recalling British colonialism and the like in the coming weeks, particularly as plans proceed at a fast pace for exploration and drilling. But in the end, this will be toothless bluster designed largely to allow Kirchner to appease a public that has long been taught to view the Falkland Islands as an integral part of Argentina.

The UK might have been willing to decolonize the Falklands, and certainly, it has seriously entertained the notion in the past. But now that the Falkands are set to become a major oil player, the situation is very different. No one wants Argentina to step in and claim the islands with the fear of nationalization fresh on the heels of the Repsol debacle. The bottom line is that Argentina lost the Falklands over Repsol.

By. Jen Alic of Oilprice.com

If FKL were selling, why should this make FOGL shares weak. It shouldn't actually make a difference???????????

It sucks, the link that Proselenes posted doesn't work unless you register to that website & it won't let me register?????????

http://www.pandjenergy.co.uk/ HELP

Although I have great confidence in FOGL, my fear is that after the rise in anticipation for Loligo, if it turns out to be gas, the share price will fall. It happened with Darwin & that wasn't even gas,(condensate instead). I know it will still be higher than what it is now back that lower than what it is now, but still......

If the rumours are correct : it looks like there are hydrocarbons present in this well......whether there are enough so Borders can declare a commercial discovery remains to be seen......mght be better than people expect !....by the way condensate is far better than plain old gas.....

Nice write up, and speculation Darwin will be commercial.

http://www.pennenergy.com/index/articles/newsdisplay/1698147026.html

.

I'm beginning to wonder if after all this time RF is PRO in disguise.,.

I am getting annoyed with this seemingly unbreakable resistance at 90p.

Are investors waiting for the results at BOR?

Only when I've got my female slacks and high heels on BB.....you never know Borders mght just come up with a surprise result.....

Based on PMO buying of RKH reserves that is circa 10US$ a barrel lets see how Loligo works.



4.7 billion recoverable barrels.

75% of that is 3.525 billion barrels.

3,525,000,000 x 10 US$ = 35,250,000,000 US$ or say 23 billion pounds.

23 billion pounds into 320m FOGL shares in issue equals 72 pounds a share.


You can see why 50 pounds a share is very possible should Loligo be full of oil.


And of course, the FOGL farm in partner is a mega multi billion part French owned company in the form of EDF (parent of Edison).

loligo doesn't - it hasn't found anything yet

Yet being the optimal word with drilling starting next month :) !!

SP getting hammered today, down nearly 6% so far.

Looks like bad BOR news is on its way tomorrow. Now if they wash out Darwin bad news it might be a sign that Stebbing is good (thats something for next week and they might be clearing the decks tomorrow of Darwin ready for Stebbing news next week).

If its bad Stebbing news tomorrow then really good Darwin news later is going to do little to support the share price with no oil found and no drills left.

Fingers crossed for BOR holders that its bad Darwin news tomorrow if anything.

Can't go by anything at the moment : look at Rockhopper....very good news and the sp dives......crazy at the moment...

It is interesting to play with the figures. Any find in the South Falklands (given the sandstones are massive thick single ones and not difficult multiple thin sands as per the north - and so are easy to develop with much less wells needed and much higher chances of EOR success) is more valuable than the North, but even so, lets use the RKH example and use a low ball 4 US$ a barrel valuation.


4.7 billion recoverable barrels.

75% of that is 3.525 billion barrels.

3,525,000,000 x 4 US$ = say 9 billion pounds.

9 billion pounds into 320m FOGL shares in issue equals 28 pounds a share.


Therefore the upside on any Loligo oil find could be in the region of 28 to 50 pounds a share imo.


One must not forget Loligo is just 4.7 billion recoverable barrels potential (Oil in Place of nearly 16 billion barrels) BUT BUT BUT, FOGL has massive acreage in the South Falklands and their top 100 leads contain around OIP of 300 billion barrels.

You can clearly see why FOGL is deemed the "Jewel in the crown" and why FKL hold so much FOGL shares.

Proselenes,

My big toe is in Borders and Southern (appetizer prior to the main meal), therefore my foot is well and truly in Falklands Oil and Gas.........Definitely FOGL is the "Jewel in the Crown".

It was a really bad day for all “Exploratory Companies” yesterday; I should know, I am in the likes of,
• Range
• Victory
• Xcite
• BOR
• FOGL
However, my other explorer ………… PetroCeltic………Is climbing nicely!

The "idiots" guide to the Loligo prospect.

Loligo will be the first of two drills by FOGL.

Loligo has a P50 Oil In Place (OIP) estimate of nearly 16 billion barrels of oil

In the event Loligo is all oil it is expected the P50 recoverable barrels would be in the region of 4.7 billion barrels.

In the event Loligo is gas it is expected the P50 recoverable gas would be 25 TCF.

There is considerable upside potential to the P50 OIP figure, as of course there is downside as well. Loligo could end up being small or nothing, or indeed it could end up being 25 billion barrels of OIP.

The bare minimum requirement for economic gas development is 5 TCF, however this is not that attractive. The economics of gas development in this location become hot, hard and horny attractive when you get to 10 TCF recoverable or more. Therefore should Loligo be dry gas it is extremely commercial given 25 TCF P50 recoverable gas estimates.

Loligo has 5 targets, these being T1 at the top, T1 deep, Trigg, Trigg Deep and then Three Bears at the bottom.

The work done by BHP suggests the upper couple may be gas and the lower ones more likely oil. This is why FOGL tried their best to put themselves into a position to drill "Loligo Deep Well" which will go through all 5 sections.

The size of each target zone (based on oil) as we go from top to bottom is :


T1 = P50 OIP of 5 billion barrels = 1.5 billion recoverable barrels.

T1 Deep = P50 OIP of 2.15 billion barrels = 644 million recoverable barrels

Trigg and Trigg Deep = P50 OIP of 3.24 billion barrels = 969 million recoverable barrels

Three Bears = P50 OIP of 5.3 billion barrels = 1.59 billion recoverable barrels


(For a comparison Sea Lion of RKH is OIP of 1.3 billion barrels and circa 400 million recoverable barrels from that OIP figure)

As you can see Loligo is potentially around 12 times larger than Sea Lion.

Loligo has had several 2D seismic studies done giving very good infill data, and 2D with infill is far superior to standard 2D. BHP also did extensive studies and the conclusions are there are strong DHI's for the Loligo prospect - sadly for BHP their South American mining interests were used against them, IIS, to make them drop their FOGL interest, something they did not want to do but were pressured into. They wanted to retain back in rights given they know how prospective it is, however the Falklands Government refused to allow back in rights and BHP ended up having to let go of the lot in order to preserve and protect their South American mining interests in the face of Argie/Brazil pressure.

RKH recently accepted what I would call a "low ball" offer from PMO, its appears PMO was the only bid on the table at a price level that could be considered to be accepted. There are reasons for a low ball offer, one being presently Sea Lion is a stranded oil find, Sea Lion is not that big, Sea Lion is going to be difficult to develop based on the thin multiple sands (meaning lots of wells needed and difficult EOR (Enhanced Oil Recovery)). But anyway, using the 4.7 US$ a barrel that PMO aid to be conservative you get :

4.7 billion recoverable barrels of which 75% is FOGL interest.

Thats 3.525 billion barrels to FOGL x 4.7 US$ = 10.7 billion pounds sterling.

10.7 billion divided by 320 million shares in issue = 33.5 pounds per FOGL share should Loligo be full of oil and thats based on "low ball" figures.

And that is just the Loligo prospect (FOGL has over a hundred leads in the license areas with potentially 300 billion barrels of OIP and 100 billion recoverable barrels potential).

FOGL is considered the "Jewel in the Crown" of the Falklands, and its no surprise a multi-billion major like EDF farmed into FOGL via Edison, and also no surprise that FKL hold lots of FOGL shares.

Pro - 16 billion barrels my ASS!!
And what does P50 mean anyway??