"How can you value the unknown until it is a proven, commercial reserve."
That's why I value it so low right now. To prove it up to a commercial reserve to feed LNG trains, ORG had to drill hundreds of wells before anyone would give them any credit, and even then, after much spend on ORG's part. APLNG and Arrow drilled dozens of pilot wells before their tight perm stuff was either proved up or dropped. Unfortunately a two-well programme is going to be hard to sell on, especially for something that, as you say, is even more unproven.
"Gravel pads along side the Dalton will ensure good communications with the road and TAPS"
Commercialising the resource will need so much more than that. So whilst it's not 88E's issue if they want to sell-off pre-development, post-appraisal barrels go cheap. In AK, as Oil Search showed, they go cheaper. And in the never-before-tried-vapours unconventional space in AK, they will go cheapest.
"Calenus? are in the middle of no where they have to lay down over $800m of pipeline connection to pump 1"
Difference between Caelus and 88E, is pretty much everything. CEO and management with actual experience and track record in finding and commercialising oil in some of the hardest technical and legislative environments. Already producing in AK. Different business model apparently - you'd be surprised what being in it for the project rather than the quick pay-off does to the credibility a company and its staff get within the industry. A bookable reserve the size of Smith Bay, they can already go to the bank with it and lobby state regulations and subsidies too. And any bank will also be happy to lend you the $800MM. Could probably get US EXIM to lend on account of nationally strategic project, so you'll pay ~2.5% to 3% interest. And at 200 kbopd, you'll service that debt in no time.
So, firstly I must apologise for the initial language I used in first posts. It was hot off the first coffee of the day, and the third-party story I initially read on 88E got me worked up. The conventional targets were great, tried and tested AK business. But the slant I read on the way the unconventionals were being "sexxed-up" got me hot under the collar. So, apologies all.
Secondly, I also have now spent more time on this site and can see so many people both personally and financially invested in the story, so I apologise to you all if I burst your bubbles. I didn't set out to be so negative, and I do keep saying I prefer 88E's conventional leases - but having spent decades in the industry, and having done L48 unconventionals, and actually spent winters on the North Slope, I had to pour some water on the idea - only insofar as I thought it presented the reality of that experience, i.e. unconventionals and AK.
Thirdly, thank you Mike Mike and Jackkkk for engaging in actual conversation instead of dismissing comments made without qualification or any actual semblance of the reality of what this company, and this project, are pursuing or achieving (like the first post responses did). Not sure what they get out of it. Bit of fresh air and real life wouldn't hurt. And also thanks for pulling me up on my own dismissive language.
Take care all, and again, I hope I'm wrong on the AK unconventionals. For you all. Given the price is up ~10% today, if nothing else you can make some margin creep along the way.
JR.
88E Price at posting:
2.3¢ Sentiment: None Disclosure: Not Held
(20min delay)
