.

Loligo is a classic Gulf of Mexico Class 3 AVO type anomaly.


To allow people to know what this means, see below :




1. AVO Class 3 Gas Sand:

• Unconsolidated sand, porosity greater than 25%, usually Tertiary in age.

• Gross interval velocity usually less than 8,500 ft/sec (2,650 m/sec). Gas and oil zones are bright spots on the stack section and on all offset (angle) stacks.

• AVO: The reflection amplitude, with respect to background, increases slightly with increasing offset distance or angle.

• Note: A Class 4 Gas Sand has same the characteristics as a Class 3 Gas Sand except the reflection amplitude decreases with increasing offset, caused by a hard shale or carbonate (shear velocity higher than gas sand shear velocity) on top of the sand.

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2. AVO Class 2 Gas Sand:

• Moderately consolidated sand, porosities 15% to 25%.

• Gross interval velocity in range of 8,500 ft/sec to 12,000 ft/sec (2,650 m/sec to 3,650 m/sec).

• Acoustic impedance of gas sand and encasing shale about equal.

• AVO is strongly more negative with increasing offset distance or angle.


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3. AVO Class 1 Gas Sand:

• Very consolidated sand, porosity less than 15%.

• Gross interval velocity usually greater than 12,000 ft/sec (3,650 m/sec).

• On stack seismic data, a large positive amplitude for a wet sand decreases to a smaller positive amplitude for a gas sand ("dim spot").

• AVO is less positive with increasing offset (angle) and may have a phase change at far offset distances.

The boundaries between classes are gradational, and therefore it may be necessary to evaluate amplitude anomalies in two classes.

And to go with the above........


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.

FOGL's Loligo is the single biggest well to be drilled in 2012. People are mistaken that Chariots Nimrod is bigger, but its not.

Nimrod is P50 recoverable barrels potential of just 4.361 billion barrels (page 23 of the latest CHAR presentation).

Loligo is P50 recoverable barrels potential of 4.7 billion barrels.


(The 4.9 billion attributed to Nimrod is the "mean" of the P10/P50/P90 figures - when you compare P50 of Loligo to P50 of Nimrod - Loligo is the biggest drill anywhere in the world this year).


And of course its 75% owned by FOGL - the biggest drill and the biggest potential upside in the world this year.

I'm in FOGL and CHAR....but hoping for a good result mainly from FOGL....fingers crossed...because 5 targets is a lot and rumours will be flying all over the place by the time we get down to 1000m or so......fantastic upside if a strike is made.....

Proselenes - 18 Jul 2012 10:47 - 943 of 965

As I have a very large holding now its time for me to disappear for summer holidays now and come back in the autumn - so enjoy the summer I shall pop in from time to time but not very often.

Time to tme means every 48 hrs to keep the ramp going?

EDITED MONEYAM

2 more people for the list above for not agreeing with Pro tut tut you can both join me

Stand in the corner of the room u two

The risk profile..............

http://boards.fool.co.uk/peter-the-trouble-for-some-here-is-unlike-bor-12603657.aspx

.

Pro - For once I would like a non-biased view!

don't think that would be possible from anyone
my own uneducated guess is that, as the usual chances of hitting oil are reckoned at little better than 4:1 or perhaps 5:1, then FOGL's odds are 7:2 at best and it could easily and justifiably be argued that they are no better than 11:2

The odds are reduced with the sheer number of wells.....third one up now.....and there will be a fourth......it's the seismic showing that is interesting.....might be a massive gas discovery......this is not too far away from Sealion.....I mean it's a gamble,,,, but boy !..is there upside or what if a strike is made.....?...

cynic

Don't the odd's become better the more holes you drill and what area you are drilling in ?

From the Daily Mail........Very interesting!

INVESTMENT EXTRA: Troubled waters of the FalklandsBy Ian Lyall
PUBLISHED: 22:17, 20 July 2012 | UPDATED: 22:33, 20 July 2012

Comments (3) Share

The past two weeks have revealed the make-or-break nature of exploration in the waters off the Falkland Islands, one of the world’s most remote and treacherous oil frontiers.

Success has translated into a bumper $1billion (£639million) deal for Rockhopper Exploration, failure saw 70 per cent wiped from the value of rival Borders & Southern in one brutal day of trading.

Exploration by UK firms Shell and Lasmo in the late 1990s pointed to the existence of significant quantities of oil and gas in the area.

Final frontier: As established oil reserves continue to decline, explorers are hoping to cash in on the Falklands
However crude prices were at a very low ebb (their lowest level in a quarter of a century, in fact) making it impossible to establish a sound economic case for further exploration of the area at that time.

So it took until February 2010 for exploration to restart.

In all, five companies operate in the area.

Three of them – Rockhopper, Argos Resources and Desire Petroleum – are in the northern basin.

The other two, Borders and Falklands Oil & Gas, hold acreage in the deeper and more technically challenging waters in the south.

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It is interesting how the landscape (or should that be seascape) is shaping up for the current wave of independent oil companies.

There is a north-south split, with the former yielding the most tangible evidence of commercial oil. Exploration of the southern basin has been hotly anticipated, particularly as seismic surveys suggested that five of the seven biggest Falklands oil prospects were in this area – and that they were potentially world class.

But the two latest holes made in the southern basin have shaken the optimism that accompanied the arrival of the giant Leiv Eiriksson drill rig earlier this year. They point to the area being the source of gas and gas condensate, but not oil.

This is rather disappointing. Gas is a far less commercial proposition than oil in this context.

If it had been found in the North Sea then there would a ready market. But it is far more difficult and costly to commercialise these finds when they are stranded in the choppy waters of the South Atlantic.

It means investors are having to recalibrate expectations.

The Leiv Eiriksson moves on to the Falklands Oil & Gas acreage next, and the Loligo target in particular.

With prospective resource of some 4.7billion barrels of crude, it is the biggest drill target anywhere in the world this year, according to Edison Investment Research. And if it lives up to its billing then it would be ten times the size of Rockhopper’s Sea Lion field, which generated the $1billion deal mentioned earlier.

So the potential reward is huge. But also remember – the chance of success is put at just one-in-five.

Rockhopper, meanwhile, is showing how it is done by bringing in Premier Oil on Sea Lion.

The FTSE 250 group is acquiring a 60 per cent stake and operatorship of Sea Lion with an initial payment of $231million (£147million). It has also agreed to pay exploration and development costs running to $770million (£492million), with the plan of bringing the field into production by 2017.

In Premier, Rockhopper has landed a partner from the oil and gas industry’s second tier, prompting questions as to why one of the majors wasn’t willing to commit to the area.

Although tensions between the UK and Argentina over the sovereignty of the islands may have been one off-putting factor.

Indeed, Premier’s chief executive Simon Lockett admitted to thinking ‘long and hard’ before finally pressing the go button on the deal.

‘Our conclusion was that this is a risk worth taking,’ he said recently. ‘It would be foolhardy of us to dismiss the risk as nothing.’

It is interesting to note that the Falklands could generate tax and royalties of around $180billion (£115billion), according to research carried out earlier this year by Edison.

So the area’s potential is huge. Whether we see it fully realised is another matter.


Read more: http://www.thisismoney.co.uk/money/investing/article-2176688/INVESTMENT-EXTRA-Troubled-waters-Falklands.html#ixzz21NksoriJ

When is the bloody Leiv Eiriksson rig coming??????????????????????

I don't get it, if there's 4.7 billion barrels guaranteed recoverable oil, then why is there odds of only 4/1 ????????????????????

For those who want more technical detail on the well, see link below :

http://boards.fool.co.uk/for-those-who-require-more-technical-details-on-12604084.aspx
.

there most assuredly is NOT " 4.7 billion barrels guaranteed recoverable oil" ...... it seems to have escaped your notice that but FOGL hasn't found $4.7-worth yet

And if they do find anything, it will take 3-5 years before any production gets underway.

Somebody tell RF that.,.

BD - the production bit is relatively unimportant ..... it's FINDING commercial quantities that will trigger ..... IF commercial quantities are found by FOGL, then the whole dynamic of the FI region changes, together with that of all companies involved.