.

Yes you beat me to it........478,108 shares........A lot of money!

Now what has he/she herd..........Unless he/she is a very big investor (gambler), or the big boys are moving in?

Beat you to it , by luck really, saw the Vol change big, did think i bet that more bloody selling! Thankfully not, as you say has that person heard something , must have done imo! Big Boys soon hopefully Gerponville

I think that oilergram should be spelt oilygram......fun and frolics on the rig....I think now : that they might have sweepstakes !....trying to guess the outcome....

I thought I would run my calculations against GMP - who did a report earlier only based on the T1 shallow reservoir.

GMP report is here : http://cgxenergy.ca/cmsAssets/docs/analysts/GMP%20Securities/GMP-Dec15-11-2012ExplorationThemes.pdf

GMP report is based on 60% work in (FOGL having 60%) and only on the T1 reservoir based on 1509 mmBOE (1.509 Billion Barrels of Oil Equivalent (Equivalent as based on most likely gas find in T1 shallow of 9TCF recoverable = 1.509 Billion BOE). It excludes T1 Deep/Trigg/Trigg Deep/Three Bears.

GMP come up with unrisked 3176p per share just for the T1 reservoir - but we must allow for the placing in 2012 which was to ensure FOGL could drill Loligo Deep and go through all 5 targets.

3176p a share just for T1 shallow (60% WI) was based on 208m shares in issue. There is after the Jan 12 placing now 320m shares in issue, so the figure needs reducing to 2064 pence per FOGL share for just T1 shallow target.

However, its not a 60% WI, it was put back to 100% and then farmed to EDF via Edison SPA - so the FOGL WI is now 75%.

So 2064 pence per share for just T1 shallow with 60% WI, becomes 2580 pence per FOGL share with the 75% WI.

So GMP value a T1 shallow (excluding T1 Deep) strike at Loligo on a 1.509 BBOE P50 basis at 2580 pence per share (thats 25 pound and 80 pence per share).

GMP actually make my calculations look very conservative, but that is what I wanted my calculations to be - very conservative. I have used lowball US$ figures per barrel for oil and per TCF for gas - GMP are using around 8.5 US$ figure in their calculations.

(For very simple conversion 1 TCF recoverable = 160 MMBOE recoverable or
1 BBOE recoverable = 6 TCF recoverable)

The barrel of oil equivalent (BOE) is a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil. The BOE is used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure.





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My earlier "very conservative" calculation post.




Final Version :

Luckily FOGL have retained 75% of Loligo, otherwise I would have had to re-work this.

A very rough guide on what success, IF ANY, has in terms of monetary value. Given this mornings Noble farm in I would suspect Noble will farm into Loligo as well, but only after drilling results and any success - allowing FOGL to monetise success very quickly.



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.

.


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.

As FOGL are drilling well away from the high pressure/temperature area of the Southern South Falklands, they are drilling in the Northern South Falklands, there are no undue concerns about high pressure as was seen by BOR who were drilling in the high pressure Fold Belt area of the Southern South Falklands.


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.

Obviously if they have a duster then its a duster and none of the above matters, but it should act as some sort of rough guide with which to value success on a reservoir target by reservoir target basis, be it gas or oil.



Drill hole / casing of the Loligo Well below :




Drilling depths (below mud line - actual drilling depths) rough comparison between RKH Sea Lion well and FOGL Loligo below :




As Loligo has 4 independent potential "company making" targets (putting Trigg/Trigg Deep together as one) I fully expect them to make multiple RNS announcements of progress during drilling, and not just a single one at the end. Had there been a main target and some small secondary ones then yes, maybe one RNS, but with 4 potential company making finds on the way down, I expect updates to come as drilling progresses. The first 2 targets, T1 and T1 deep are under half the actual drilling depth from sea bed/mud line that the Sea Lion main fan was for the RKH drill, so I expect some news fairly soon, perhaps in 3 weeks or so.

The values for oil in the ground and gas in the ground are low, imo, but its worth starting there at low points to please the bears a little.



As ever, all is IMO, NAG, DYOR !! etc..

Nice Proselenes, if it comes to fruition then the figures are mind blowing, and those figures just for T1, just imagine if they hit oil further down!!..

Hi Proselenes,

As Grannyboy states, the figures are indeed mind blowing.
Still a lot of ifs, but the risk v reward looks as good as it gets.

It has suggested several times on MoneyAm, that should our ship come in (or wells) we should have a get together.
Looking at the possible figures, could I provisionally suggest Necker Island for a couple of weeks at approx £371,000 with a 16 person limit.
Includes full butler, chef service etc with private beaches.

If Fogl come up dry, the alternative could be a long weekend at Clacton on Sea sharing a beach hut at approx aprox £120 with no person limit.
Includes a donkey ride and punch and judy show.

Thought I would at least try and lighten the mood while we wait, as the 0700hrs routine is carries onward.

I guessed at week commencing 17th Sept as the possible start of news flow. Not long to go now. Absolutely no news at intermediary targets though Mr. P.! ;o)

greekman, I cannot think of a positive result. I have aligned myself with a duster and poor result - expecting the worst.

Any positive result will be the upside and surprise, and only when that happens, should it, will I consider anything related to the potential gains and possible happy times thereafter.

For now - I am conditioned and expecting a duster, my personal choice to expect the worst and let whatever happens, happen.

Like you I always expect the worse, as that to me is always the best approach, and yet, I still think of myself as an optimist.
Nice though to dream and hope!

MrP - surely you blush the deepest beetroot!?

However, I am a little confused…....As you have stated in earlier threads, that you hold 400,000 FOGL shares........Here’s the confusion...........Why are you "aligning yourself to a DUSTER"?

I am a big investor in this stock..........I am (IMO) a very positive individual, therefore, I am not thinking of dusters, that's for sure. So, my plan of attack, is I will sell 50% of my stake (Nerves permitting) during the hype, which will occur........Then, with what will be "Free Shares" await results x 5!!!........................No duster gremlins in my head!

I look forward to reading more of your very technical threads........Good luck with your shares.

Not at all.

Nobody has claimed at any time that FOGL will strike gas, or oil. The risk of this is well represented.

All that is done is to post some potential valuations based on a gas, or oil, or combined gas and oil discovery.

Everyone should expect a duster, be prepared for it - and let any good result be a nice surprise - that was not expected.

If you always expect the best, you will be disappointed often, if you expect the worst you will often be very nicely surprised.

Full script this time!!!

Proselenes: I am a big follower and supporters of your technical views/prowess with regards to FOGL........Keep up the good work.

However, I am a little confused…....As you have stated in earlier threads, that you hold 400,000 FOGL shares........Here’s the confusion...........Why are you "aligning yourself to a DUSTER"?

I am a big investor in this stock..........I am (IMO) a very positive individual, therefore, I am not thinking of dusters, that's for sure. So, my plan of attack, is I will sell 50% of my stake (Nerves permitting) during the hype, which will occur........Then, with what will be "Free Shares" await results x 5!!!........................No duster gremlins in my head!

I look forward to reading more of your very technical threads........Good luck with your shares.

Gerponville - expect the worst - and you will often be pleasantly surprised.

My 400K holding was mostly purchased in the 50's pence levels.

FOGL can drill both Loligo and Scotia and still have 41p a share left in cash - and big farm in partners in place.

Therefore I can be very relaxed with my position - its weighted to exploit the risk/reward - but I will not lose any sleep holding it through to Loligo and Scotia results with 41p a share cash leftover after both drills are done.

As we all know : with exploration companies : it's hit and miss....the thing with this current well is that the upside in the event of a hydrocarbon discovery is enormous....so the question is to us all : are we prepared to take a risk ?.....if there wasn't another well after this one I would be a lot more cautious....

To clarify.
My expecting the worse means that I put the odds on failure as higher than success, that is how my investing strategy on any AIM share works.

So if I invest say £5000 equally between 5 different AIM companies, even if 4 fail completely, I only need the remaining one to be a 4 bagger to break even.
On past experience, to have 4 out of 5 fail completely is very rare, with my average being 3 out of 5 loosing me money, 1 a total failure with that remaining one making up and over the difference.

That's what I did with GKP a few years ago Greekman......a few failures and then a bit of luck with Gulfkeystone got me going again......

perhaps i have indeed lost the plot, but MrP looks as though he has completely lost his marbles, always assuming he tells the truth (some question that)

What he might do or has done is to sell 50%.....a sort of free ride thing....