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a wry smile that FOGL was pretty much my worst performer today ..... clearly the market is not listening to MrP

Pro

Have you ever worked in the oil industry ? You seem to know a lot of the technical side of it.

Were's the " French Connection " ? Be interesting to know what he would have thought about all this.

if he's worked in the oil industry, he doesn't seem to have learnt much of value even if he's good on the gobbledegook

cynic i don't know if you are aware, but these are discussion boards,at least Proselenes puts up some good research and views,(which i've never read a post of yours putting anything you could call research) so instead of your snide remarks and griping, if you don't agree with what Prose post, put up your own researched views...

Can't disagree with that grannyboy

as i have often posted, i have never researched; i'm more than happy to leave it to the geeks and drones who love such things .... i then pick and choose as i wish, trying to use common sense which is often much more effective than the goobledegook for making decent decisions ..... MrP's posts here and on BOR and GPK have plenty of the latter (and sometimes just plain nonsense) but little of the former

cynic so you can honestly say you don't use the information that Prose or anyone else post to your advantage in any of the companies mentioned??...

now try reading what i wrote and not what you imagine i wrote

LE rig Dynamic Positioning is on right over the well position S51 deg 10'23.79" W54 deg 40'48.29".

Spud RNS should be very soon.

Fact remains that the sp could in my view increase in value by 500%.....a bit like Rockhopper did a few years ago......you can't give % chances and all that....that's ridiculous but five targets there are and the seismic shows up something big...might be gas above oil so it is risky it is but with a hell of an upside if successful !...

could, might, perhaps maybe, if ....... yeah yeah

You sound like the Beatles......not bad....

Pro love's you yeah , yeah , yeah and you no that can't be bad

http://en.mercopress.com/2012/08/04/falkland-islands-assessing-options-for-the-expansion-of-port-facilities

Saturday, August 4th 2012 - 19:24 UTC

Falkland Islands’ assessing options for the expansion of port facilities

Falkland Islands port facilities are under assessment given the prospects of oil industry activities in the near future and two options are being considered by the local government: a new port project, and an interim development of the current facilities at FIPASS.

“Some immediate action is required in terms of survey work, design o............................

.I am going to work on this over the coming weeks, refining it and getting it ready to be posted around by whoever wants as the results of Loligo approach. There will be massive deramping going on I can bet, so this should hopefully provide a realistic valuation of the targets should there be success in finding gas or oil.

If any errors are spotted please point them out.


Draft 1 !




Loligo - Interpreting the results of the drill


Loligo is 75% FOGL and 25% Edison SPA (EDF), as according to the recent farm in deal.

First up one should consider the strategic importance of Edison SPA as the farm in partner. Edison are highly experienced in gas and oil exploration/production/distribution. You can see there latest gas PDF brochure on the below link :

Edison SPA (majority owned by EDF)

15.2 billion cubic meters of available natural gas supply. Edison accounts for 19.60% of Italy’s demand for natural gas, 83 concessions and exploration permits in Italy and abroad, 3 natural gas storage centers, 1 LNG terminal, 49.8 billion cubic meters of hydrocarbon reserves.

http://www.edison.it/media/brochure-edison-gas2012.pdf

As can be seen, Edison is a major part of the Italian energy supply system, and its parent company EDF is majority owned by the French government. This brings both the Italian and French governments in with the UK government as having direct opposition to any Argentinean harassment, add on an upset Spanish government over the nationalization of YPF (stealing it from Repsol) and you are seeing a clear picture of major world powers all becoming aligned against Argentina.

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In the South Falklands Basin the weather/sea conditions are similar to the Norwegian North Sea / West of Shetland. Water depths are not extremely deep (Loligo is around 1400m water depth) and most targets are shallower than 1500m water depth.

However, owing the remote location the criteria for a commercial discovery is higher than it would be elsewhere in the world.

Before proceeding some companies quote OIP or GIP figures (these are Oil in Place or Gas in Place figures and are not the same as "recoverable barrels" or "recoverable gas" which is the Oil or Gas figure after the "recovery factor" is applied. Owing to decent reservoir formations one assumes a 32% oil recovery factory and a 50% gas recovery factor on the OIP/GIP figures)


Oil - a find needs to be at least 200 million barrels recoverable to be commercial as a stand alone project. Smaller sizes that this would only be commercial when tied into a bigger development nearby. In reality to gain maximum value from a discovery it needs to be 400 million recoverable barrels in size - owing to economy of scale, the larger the find you hit a point at which its very attractive to develop, as opposed to being able to develop and make money, you come into being able to develop and make a lot of money.

Gas - a find needs to be at least 5 TCF recoverable to be commercial as a stand alone project. Smaller sizes that this would only be commercial when tied into a bigger development nearby. In reality to gain maximum value from a discovery it needs to be 10 TCF recoverable in size - owing to economy of scale, the larger the find you hit a point at which its very attractive to develop, as opposed to being able to develop and make money, you come into being able to develop and make a lot of money.

Condensate - no idea on this. Condensate is more complicated as there has to be gas re-injection in order to gain the maximum recovery of the oils. If you produce the gas and remove it then very soon the well will stop producing condensate and the total recoverable condensate will be very low. You have to therefore re-inject the gas back into the reservoir to maintain pressures so that gas again lifts the condensate out. Condensate often trades at higher than Brent crude per barrel - but its extraction costs are higher than oil due to the processes needed.


MAKE NO MISTAKE AT THIS POINT - LOLIGO IS A 4.7 BBOE recoverable target - thats 4.7 billion barrels of "oil equivalent" that are recoverable based on P50 estimates. THE UPPER TARGETS WILL LIKELY BE GAS - and owing to their mammoth size very commercial as well (which is why Edison SPA farmed in and Falklands gas via LNG could be a major part of Italys future energy supply) - the lower targets could be oil or could be more gas.


Loligo's 5 targets :


OIL BASIS - This is the LEAST likely end result, IMO.


T1 = 1509 million recoverable barrels - P50

T1 Deep = 644 million recoverable barrels - P50

Trigg and Trigg Deep is 969 million recoverable barrels - P50

Three Bears = 1588 million recoverable barrels - P50


Based on Sea Lion of RKH and therefore using a 4.7US$ per barrel valuation and taking 75% of that for FOGL's share and 320 million shares in issue.

T1 = 1509m*75%*4.7/1.55/320m = £10.72 per FOGL share value if P50 size oil
T1 Deep = 644m*75%*4.7/1.55/320m = £4.57 per FOGL share value if P50 size oil
Triggs = 969m*75%*4.7/1.55/320m = £6.88 per FOGL share value if P50 size oil
3 Bears = 1588m*75%*4.7/1.55/320m = £11.28 per FOGL share value if P50 size oil

If all targets are oil, based on Sea Lion price - potential £33.45 per share.

As FOGL already have a farm in partner and reservoirs are going to be, if there, large massive thick sandstones and simple to develop the price should be higher than Sea Lion's 4.7US$ per barrel, however, I will use that for now to be conservative.

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GAS BASIS - this is a VERY POSSIBLE outcome to the well on success.


T1 = Circa 9 TCF recoverable - P50

T1 Deep = Circa 3.8 TCF recoverable - P50

Trigg and Trigg Deep is circa 5.8 TCF recoverable - P50

Three Bears = Circa 9.5 TCF recoverable - P50


Based on Cove's (COV) sale and therefore using a 513 millions US$ per TCF recoverable and taking 75% of that for FOGL's share and 320 million shares in issue.

T1 = 9*75%*513mUS$/1.55/320m = £6.98 per FOGL share value if P50 size gas
T1 Deep = 3.8*75%*513mUS$/1.55/320m = £2.94 per FOGL share value if P50 size gas
Triggs = 5.8*75%*513mUS$/1.55/320m = £4.49 per FOGL share value if P50 size gas
3 Bears = 9.5*75%*513mUS$/1.55/320m = £7.36 per FOGL share value if P50 size gas

As FOGL already have a farm in partner and reservoirs are going to be, if there, large massive thick sandstones and simple to develop the price should be higher than Sea Lion's 4.7US$ per barrel, however, I will use that for now to be conservative.

If all targets are gas, based on COV price - potential £21.77 per share.


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GAS UPPER, OIL LOWER - This is the MOST LIKELY end result on success, imo.


Most likely outcome, if successful, would be IMO, gas in T1 and T1 deep, gas in Triggs and a bonus API 18+ oil discovery in 3 Bears.

This combo of oil and gas would give as below, if all were successful and P50 size.

T1 = 9*75%*513mUS$/1.55/320m = £6.98 per FOGL share value if P50 size gas
T1 Deep = 3.8*75%*513mUS$/1.55/320m = £2.94 per FOGL share value if P50 size gas
Triggs = 5.8*75%*513mUS$/1.55/320m = £4.49 per FOGL share value if P50 size gas
3 Bears = 1588m*75%*4.7/1.55/320m = £11.28 per FOGL share value if P50 size oil

Total gas upper/oil lower result = Potential £25.69 per share.


The strategic importance of having Edison SPA on board now in the farm in is very clear. Had FOGL discovered gas, as is to be expected in the upper zones, then they would, like RKH and the small and complex Sea Lion, had to probably accept a low ball offer to get the project moving.

With Edison SPA on board and their expertise in gas FLNG, storage, transportation and with them having a market already which needs much more LNG pumped into it, as in the earlier PDF, any gas discovery with over 5 TCF recoverable in size is likely to get developed. If T1 and T1 deep come in as gas as is expected then immediately Loligo is well past the 10 TCF threshold at which it becomes very commercially attractive to develop, meaning we would see pretty quick development of Loligo imo.

The joker in the pack is Three Bears, this will be the last reservoir target to be drilled and could well be the one that contains the oil there - exciting that if T1 and T1 deep are gas, we have a commercial success and then we have the icing on the cake possibly down below that. If T1 and T1 deep fail, there is still the big one down below to save the day.

By defining each of the targets, being gas or oil, on their P50 figures and based on recent examples of takeover values for oil/gas in the ground, should allow people to assign some kind of value as drilling progresses, in case we get for example an RNS after T1/T1 deep are drilled, then an RNS after the Triggs are drilled and then finally an RNS at TD after Three Bears has been drilled.

Below is a very rough (and not to scale, marked up/modifed by me) imo idea of the well bore and where the targets are in relation to planned drill/casing size.



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Well worth a read. An insight into HFT and how it is now distorting markets with sudden falls and rises.

http://www.zerohedge.com/news/interview-high-frequency-trader

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What's this spud RNS going to be based on?? If they'll have only just started drilling, then they'll have nothing to base it on??

I get the impression that Loligo might be more likely to be gas!!!!

As a comparison, for the RKH Sea Lion well.

Sea Lion Main fan was 1884m below the mud line following 3 casing points. (Below mud line means that at the mud line is where drilling commences on the sea bed, so drilling is in meters below the mud line/sea bed).

FOGL first target T1 is circa 800 meters below the mud line following 2 casing points.

FOGL second target T2 is circa 1100m to 1300m below mud line, following 2 casing points.

Third casing point for FOGL Loligo is at 1519 meters below mud line.


I would guess, based on larger drill bit, quicker drilling and the shallower drilling depths below mud line that we could see T1/T1 deep results come out before 20 days from spud, imo. Could see rumours of gas or oil at around 2.5 weeks to 3.5 weeks after spud, with results from T1/T1 deep before 4 weeks, if progress is good and no hiccups and they decide to update at the third casing point before drilling into the Triggs.


Three Bears at the bottom of the Loligo well is 2700 meters below mud line - same depth as Sea Lion Lower fan for RKH which was 2600 meters below mud line.

I have tried, very roughly, to compare the actual drilling depths, below the mud line/sea bed, for the RKH Sea Lion well and the Loligo well of FOGL.


As below. There is a difference in total depth of around 924 meters, as Sea Lion sea bed was 476 meters below sea level, and Loligo sea bed is 1400 meters below sea level. However if you take purely the actual drilling below the mid line, the below is a rough comparison.

Obviously with 1km extra length on the drill sting - operations like casing, changing bit etc... take much longer.

Anyway, interesting to compare.



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