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3 guesses as to which line represents FOGL

LOL

RKH is now POST drill - and will now go down and down over the coming months.

FOGL is now PRE drill - and will go up and up in the coming months.

I will post your chart back to you in June cynic - and laugh and laugh :)

Worth re-reading this now, and the implications of Scotia which I predicted would be drill number 2.

http://boards.fool.co.uk/nfsc-2012-write-up-fogl-falkland-oil-and-gas-12443771.aspx?sort=whole

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if you're right I am delighted for you and everyone else, but you seem to delude yourself and forget that FOGL is all blue sky with the very high risk that that implies - viz DES!

The overhang from this placing will need to clear - it will take time, the spudding of BOR's first well will provide impetus to buy FOGL.

With the new placing shares now :

BOR is funded for 2 wells.

FOGL is funded for 2 wells.


FOGL's prospects are 4 times the size of BOR's - and yet BOR market cap is now (taking in the placing shares) twice the size of FOGL.

So BOR is twice as expensive with a quarter of the potential. That means FOGL is cheap and will undergo a big re-rating once the overhang is clear.

FOGL COS is only 10% very poor, very slim chance of hitting oil

BOR COS is over 20% hence have a better chance of hitting oil hence higher market cap higher.

http://ftalphaville.ft.com/blog/2012/01/13/832461/markets-live/



Falkland Oil And Gas Ltd (FOGL:LSE): Last: 46.75, down 3.75 (-7.43%), High: 52.00, Low: 43.00, Volume: 14.89m

BE Sector watcher’s had a look at this one.

BE

48.5m equity issue at 43p/share, a 15% discount to yesterday’s closing price. It’s a big raise, with the new shares representing 54% of the existing shareholder base. Although FOGL already had around £70m at interim results in mid-year, the additional cash will make a material difference to its impending drilling campaign in the southern Falklands. Previously the group only had sufficient cash to drill two shallow wells, whereas now it can drill much deeper prospects. We estimate that the wells will cost around $60-70m each. The first well, Loligo, is targeting 4.7 billion barrels of hydrocarbons, over half of which is in the deeper targets (which admittedly look more gas-prone than oil-prone).

On an assumed NPV of $10-12/barrel, an oil discovery therefore has the potential to be worth $50-60bn, i.e. a quite staggering amount in the context of FOGL’s market cap of around $250m. The group will drill its two wells immediately following two from Borders & Southern, which is due to take delivery of the Liev Eiriksson deepwater rig later this month. Hence over the next six months or so, there will be a total of four wells being drilled in the basin, targeting around 7-8 billion barrels of hydrocarbons. Whilst clearly high risk, I’d be tempted to take small positions in both FOGL and BOR.

PM (Banks underwriting unicredit rights expect 90-95% take up — bank consortium source — rts)

PM Tight discount that for Falklands

BE Yeah – that’s what I thought.

Very high volume turn over off FOGL shares today Marky and a lot of the placing shares will have already been sold and bought by the 18th.

The CoS is very low, like all these wildcat Wells, but the sp should surely rise into BOR/FOGL spud time as the upside of another Sealion stroke of luck will pull in a lot of punters....how many shares you hold at drill results time is the normal issue!

FOGL CoS is not low.


Toroa was 3.8% CoS and it failed.

Loligo, back in 2006, pre CSEM, pre more seismic studies etc.. had a CoS of 11.5% as rated by TRACS (Nov 2006).

At the AGM recently the board said the CoS was now, after all the new work from 2006, at the 20% level for Loligo.

Scotia well, given the excellent sands at Toroa and the implications for Scotia deep well, is also around 20% CoS imo.

10% CoS V 90% chance of failure = very low CoS

20% CoS V 80% chance of failure = very low CoS

You will not find any wildcat well with over 30% CoS and yet many do strike oil.

20% is pretty darn decent, compare that with Toroa which was 3.8% CoS and failed......

You only have to look at ARG - who could not raise cash. Look at XEL who are struggling like mad to raise development cash and are using the equity sharks. RKH which is struggling to find any partner interested in the small find up north.

FOGL have done the right thing.

They are full funded for 2 deep wells, allowing them to drill Scotia if Loligo fails.

The crafty side of that is that if Loligo strikes oil they can do an appraisal well on Loligo - they now have the funds and can forget Scotia for 2012.

This is the upside, not talked about, but very openly there now - they have sufficient funds to appraise a Loligo strike and have lots of cash left over.

This allows them to secure a very good farm out deal on Loligo AFTER the drill results - no need to rush in before.

FOGL are also cheap in terms of others. If you compare BOR and FOGL (post placing) now - FOGL have lots more potential in terms of recoverable barrels and yet are well below the BOR market cap.

BOR

Number of shares: 428.58m
Share Price: 70.75p
Cash: $197 million / £128.88m
Market Cap:£306.43m

FOGL

Number of shares: 320m
Share Price: 45p
Cash: $223 million / £145.89m
Market cap: £144m


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Post this placing this is where we stand imo :

BOR

Number of shares: 428.58m
Share Price: 70.75p
Cash: $197 million / £128.88m
Market Cap:£306.43m

FOGL

Number of shares: 320m
Share Price: 45p
Cash: $223 million / £145.89m
Market cap: £144m



Loligo risked per share is now £13.13
Loligo unrisked per share is now £89 (based on P50 4.7 billion recoverable bls)

Scotia risked per share is now £2.79
Scotia unrisked per share is now £18.93 (based on P50 1 billion recoverable bls)

FOGL main prospects risked is now £44.71 per share
FOGL main prospects unrisked is now £303 per share

And for fun :

FOGL top 100 prospects is risked £224.98 per share
FOGL top 100 prospects unrisked is now £1524.76 per share

this was to be expected after placing - fogl are only cheap if they find something other than water and preferably not gas - high risk punt especially with the argies breathing fire - dont laugh but the argie squid wars are just a start.....

& new shares represent 54% of existing shareholder base.........................

GAS is fine - Loligo is so big, over 10TCF is commercially viable for LNG.


If Loligo were gas all the way, by my calcs it would be :

Recoverable 33.61 TCF of gas and 1.25 billion barrels of condensate (P50 basis)

If Loligo top were oil of some 2.153 Billion recoverable barrels then the bottom could be gas with 18.2TCF of recoverable gas and some 677 million barrels of recoverable condensate (P50 basis).

Top Loligo is T1+T1 deep - bottom is Trig/Trig Deep and Three Bears.


So :

Top oil and bottom gas/condensate is commercial.

Top oil and bottom oil is commercial.

Top gas/condensate and bottom gas/condensate is commercial.

Top DRY and bottom oil is commercial

Top DRY and bottom gas/condensate is commercial

Top gas/condensate and bottom DRY is commercial


Oil is commercial / Gas is commercial if over 10TCF in size (recoverable)


So pretty much all combinations apart from DRY/DRY is commercial, and you can see why they wanted to drill the deep well, obvious really.

time will tell ..... the armchair experts from one camp or the other will be proved right

cynic

have a look on the Cove thread , names of bid company's.

will do - have followed that one idly from time to time

Doesn't Loligo look scrumptious :)



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