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Everything posted by ian_whitchurch

  1. In reply to: ian_whitchurch on Thursday 15/09/05 05:22pm This is a helpful summary about valuing oil and gas assets in general http://www.tklaw.com/website.nsf/WEBnewx/D...6256CC90072CCA2 You'll need to cut and paste it ... if that doesnt work, google "valuing oil gas assets courtroom" and it'll come up. Ian
  2. In reply to: kahuna1 on Thursday 15/09/05 04:59pm The absolute key question is 'where is the gas'. Oklahoma gas, sure, I'll buy 6000 cf of gas to a barrel of oil. Middle of central Australia, I wouldnt trade 60 000 cf of gas for a barrel of oil. The other point about tying back into other people infrastructure (ie Santos at Moomba, Santos at Longtom) is that big oil companies (particularily those who start with S and end with ANTOS) will take small oil companies to the cleaners. Developing onshore oil tends to cost in the millions. Developing offshore gas tends to cost in the billions. Thats why the numbers get hairy, so just remember 'Barrels of Oil Equivalent Arent'. Ian Whitchurch
  3. ian_whitchurch


    In reply to: 2187 on Thursday 15/09/05 02:08pm 2187, I can count about eight 60 mmbl/1 Tcf targets in and around Australia that are looking for farmin partners ... I'd be cautious about applying value to prospects that dont have a farmin partner that can afford to drill. That said, over the last few months I've seen a number of company reps floating around Australia from companies like Pogo and Paladin that are clearly looking for deals. Ian Whitchurch
  4. In reply to: Mensa on Thursday 15/09/05 01:03pm At the moment, a small Australian gas producer (ie MOS or one of the CBM player) nets about A$2.50 per thousand cubic feet of gas. At the moment, a small Australian oil producer (ie COE) nets about A$65 per barrel of oil. Now, if you have a TCF or so of gas, the rules change, as then you can look at tying in the gas to a gas export contract to Japan, Korea or somewhere else where they'll pay you world prices for gas, which are closer to USD5 than AUD2.50 for the same amount of gas. Thus, small gas finds are, in my opinion, worth about a million Australian dollars per recoverable Bcf, but large finds near to existing LNG infrastructure are worth about three million Australian dollars per recoverable Bcf. But this is also affected by how long the deposits take to be tied into a market - you can start trucking oil a month after discovery (ie Worrior), but gas can take years to find a market (ie Smegsy). As always, specific finds and deals may vary. Ian Whitchurch
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    In reply to: JGK on Thursday 15/09/05 09:37am JGK, Yeah. People have different opinions about this stock ; someone wants to buy some, and someone wants to sell some. The price will get averaged out later ... Ian Whitchurch
  6. In reply to: apache123 on Wednesday 14/09/05 12:53pm Actually, it makes sense to me, and it fits with his recent whining about the lack of fuel hedging in Virgin Blue. If it was me, I'd be taking a plane to Vienna to have a long, long chat with OMV about JVing a refinery in ... drum roll ... Rumania. Why Rumania ? Cheap to operate, lots of dirt, ex-communist country with high unemployment and no NIMBY issues. And it's close to all that wonderful crude coming out of the Stans. Why OMV ? They just bought Petrom SA, the ex-Rumanian state oil monopoly. Ian Whitchurch
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    In reply to: kahuna1 on Wednesday 14/09/05 04:38pm Kahuna, Makes sense to me. Ian Whitchurch
  8. In reply to: healyn on Tuesday 13/09/05 09:39pm Healyn, The overwhelming evidence from the hundred and thirty or so years of oil production is that old fields dont refill. Sometimes you do have oil or gas leaking up from deeper reservoirs, casuing some evidence of refill ... but these are the exceptions, not the rule. Often, you have technological changes that make reserves that were previously abandoned as uneconomic producers, whether thats water flooding, acid treatment or whatever (on the topic of shale plays, they found the first gas Barnett Shale in the early 1900s, and produced them in the 1980s ... it needed horizontal drilling and $7 gas to make it work). Shale plays are actually a special case - there's no reservoir, you just pull it directly out of the source rock before it's had a chance to migrate away. We've learned a lot about oil and gas exploration in the last hundred and fifty years. One of the things we learned is that the success rate for oil or gas wells outside known hydrocarbon producing shale areas is nil. You have to have source, and source is almost always hydrocarbon-rich black shales of one description or another. Yes, you do have hydrocarbon migration, and sometimes the source has to be hypothesised, because it is so darn deep you never drilled it, but you have to have source. But at the end of the day, oil fields get emptied once, and once you've done that, they dont come back. Otherwise, the great oil producing regions of New York, Pennsylvania and Ohio would be contributing much, much more than they are. Ian Whitchurch
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    In reply to: mangrove on Tuesday 13/09/05 04:57pm Mangrove, Thanks for picking me up on that. I remembered it was a 60/40, I just flipped the numbers around. Note that a mixed gas-oil deposit will be less valuable than something completely oil, and that something between the P90 and P50 recoverable will be about 40 mmbo ... roughly about the size of the Beach/Anzon play. Finally, remember that GOP have quite a few untraded options ... theres about 120m shares fully diluted. Ian Whitchurch
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    In reply to: annaliese on Wednesday 14/09/05 09:59am Annaliese, Much as I like Baraka, you've also got to recognise that political risks are higher when playing onshore. Six guys, a truck and twenty kilos of explosives can disable an onshore pipeline, but you need a fleet to interdict offshore platforms. Thus, political instability in Mali and/or Mauritania will impact Baraka more than Hardman ... optimists among us could consider that a buying opportunity. Ian Whitchurch
  11. In reply to: scott_reeve on Tuesday 13/09/05 01:23pm Yeah, Utopia-5 was low to the prognosed depth and hit below the oil-water contact. You can safely reduce Utopia's size based on that ... lets hope for Bounty's sake U-6 comes in. Ian Whitchurch
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    Dont forget that gas in unlikely to be good news for GOP etc ... the IGs report thought gas was a 60:40 chance, and the structure iosnt really big enough to hold enough gas to be worthwhile. Ian Whitchurch, who thought 12 cents was a good price for GOP but would be lightening up at 20
  13. In reply to: healyn on Monday 05/09/05 10:02pm Healyn, Sure, when you have an active petroleum system with current production within the oil or gas window, you'll get recharge. But how fast ? If a million-barrel recoverable field refills at a ton of oil per year, then in a mere 140 000 years you'll have your field back. Ian Whitchurch
  14. In reply to: amazed on Monday 12/09/05 08:20pm The beauty of COE's position is they dont actually have to do a deal - even with drilling costs as they arel between their cash pile and 6 months cash flow, they can afford to drill any of their properties without a JV partner. Yes, they will do a deal with Apache, Kerr-McGee or whoever- but they will do it from a position of strength, not from a position of weakness. Ian Whitchurch
  15. In reply to: jojosydney on Monday 12/09/05 06:13pm Jojo, You're right about any hits in their new areas making COE worth many times their current cap - the key to the strategy is cash flow from the Cooper and growth outside it. Tino stated in his Good Oil presentation that they were staying in the Cooper for the forseeable future. I don't think thats the right strategy, but it's what he's going to do. Ian
  16. For my money, COE was the best presentation at Good Oil. The deals are all good, all high upside, and given COE's production from the Cooper, they are all affordable. COE was marked down when people were unsure what they were going to do with the money - that question has now been answered, and they are now getting the love and attention they deserve. Ian Whitchurch
  17. In reply to: UNV7 on Monday 12/09/05 01:17pm UNV7, Apache would disagree with you about the "proved" nature of Longtom, but it's worth a shot at developing. The key is the fact that the Koreans are paying for their exploration and they have more targets to go ... we also have the likes of BG, Paladin and Pogo coming into Australia, so I think that NXS will be able to continue to drill using other peoples money. Ian Whitchurch
  18. For what it's worth, I liked the Nexus presentation at Good Oil. But I'd prefer to see someone sign on the dotted line for a deal over Longtom-3. Ian Whitchurch
  19. I'm happy with using a number of A$30 for onshore reserves of light oil in onshore Australia. Of course, you need to discount this for each of heavy, waxy, sulfer-tainted, offshore, deep offshore, political risk , oil located in unstable areas (ie PNG or the 'Stans) and oil located a long way from infrastructure. Recent transactions are few in number in Australia - Utopia, Turtle/Barnett, Tacnas and Maari all had special circumstances, so it's hard to value oil reserves based on recent transactions. I disagree with "it is impossible to value a hole in the ground before it is drilled" - if someone has paid a premium of 100% (ie paid 50% of drilling costs for a 25% interest in the well), then you can argue that they are valuing their interest that way - if the well costs $1.5m, then if I'm prepared to pay $750k for a 25% interest, then 100% of that well should be worth $3m ... but be aware that many deals (ie KAR's with BG) are in the form "We pay for some seismic, and only if we like it will the well get drilled". Ian Whitchurch
  20. In reply to: Wargfang on Sunday 11/09/05 11:49pm The whingeing started early, but they're back on. The odds are definitely on England now ... Ian Whitchurch
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    In reply to: Wargfang on Wednesday 07/09/05 11:13am Warfang wrote "Im in (average price around .185)...that last PDF worked. I still have to admit ( ) Im an unsure from the LKO ann what :- PATROBUS 1 STRATIGRAPHIC CORE HOLE a stratiraphic hole is ? How deep is it....and how long does it take to dig !" A stratigraphic core hole is what you dig when you dont have an actual target, but want to know what the rocks are like down there, to guide you in your exploration plan. They almost never hit commercial oil or gas, and cost the same to dig as normal dry holes. Expect this one to miss. Ian Whitchurch
  22. Prior Plannning Prevents Piss Poor Performance Ian Whitchurch
  23. ian_whitchurch


    QUOTE (Optionsman @ Tuesday 23/08/05 12:02pm) Optionsman, Tight gas bearing sandstone was in the Epsilon formation, and the second one wasnt done because of unstable coal meaures. Until proven otherwise, I'm counting Ginko as another non-commercial tight gas find. My belief is that INP will need $4 gas in Australia to justify the multiple horizontal wells they will need to get these tight gas prospects into productiuon ; the $7m they have in the bank just wont cut it for the amount of capex they'll need. Ian Whitchurch
  24. ian_whitchurch


    Maiden, You know when you put the dip-stick into your oil reservoir in your car ? Thats a DST. You know how you pull the dip stick out and clean it before you check the oil ? Thats a wiper trip. Exactly the same process http://www.sharescene.com/html/emoticons/smile.gif Ian Whitchurch
  25. In reply to: idribble on Monday 29/08/05 09:28am Idribble, Refineries have nothing to do with it. This comes down to China and India adding 1 mmbl/day to world demand, and thats sucked all the slack out of the system. Add to this the supply pressure from North Sea, North Slope and West Siberia hitting the far side of the decline curve, and the lack of wildcatting 10-15 years ago, and you get rising demand and tight supply. It'll hold north of USD50. Ian Whitchurch
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