Chris Oil feature article
Today I have included the South Falkland Basin unrisked target into Falkland Oil & Gas (LON:FOGL) based on fully carried strong balance sheet with a few extras coming up in the 3D and OIP figures based on my interpretation.
This may seem bullish to include on an unrisked basis however this is the third time I have personally taken part with the key players and feel it’s time to make a call before the heard arrive or the loons for that matter.
I read with interest on the front page of the local Falklands rag Penguin News about the official opening of the temporary dock by the vice president of Noble Energy and comments regarding Falkland Oil & Gas. It was interesting to read Humpback prospect is ready to be drilled mid-2015, quote “and we all hope we will have a real celebration then.” Humpback 52.5% FOGL based in the South Falkland Basin is 510m P50 recoverable with good AVO, up dip seal mapped by 3D Nobel Energy and located in good quality sands proven in the last campaign through calibrated wells around the basin.
Reading on the dock cost $12m to $15m a large amount for a depressed oil industry to pay at the present time. Maybe it’s the costs of breakeven at $35 a barrel due to the low tax in the Falklands or more importantly the potential Brent oil field still out there in the Falklands third time lucky?
More 3D is coming out this month I believe on Hersila and Challenger with OIP figures increasing the basin potential. I would say this is when most brokers will update calculations however Chrisoil likes to be ahead of the curve, expect a rerating before the rig even arrives in February or sets sail in December.
Last data from the South Basin was 20% cos from the last campaign so I expect to hear something on that front but several oil industry people now think with 3D interpreted by Nobel Energy not 2D infill and a defined oil area resulting in lower risk this time around based on past drilling campaigns.
Scharnhorst North 52.5% interest 188m P50 recoverable which is a good second drill target near Darwin condensate discovery (Borders & Southern) looks exciting from FOGL presentation with a very good chance of success included in the oil window ending at a shallower deep depth than Borders deeper license nearby hence the condensate.
So at present 75p is just my risked basis 52% cos first well Zebedee in the North Basin extension of Sea Lion only which FOGL has a 40% interest gross recoverable 240m P50 and the unrisked £7.50 is my new total target for the company on successful discoveries of oil. These calculations include the present oil price environment like the last campaign and in 1998 prices were well below $80 and companies still ten bagged on discoveries.
Next step 3d update soon.
Until the next time more ramblings from the castle can be seen @chrisoil