I've always considered Bula as a marginal field...especially when you factor in the costs of the constant work-overs and additional wells required just to keep field production at current levels.
Obviously, current oil prices have changed Bula's short term outlook...but I simply see this a perfect opportunity to off-load it!
As I see it, Bula is in it's death throws...after all, it's been around for a very long time (100 years?)...so given the fields current rates of decline, margins will only get worse...and at some point in the next 10 years or so, someone is going to have to pay for shut-in and reclaimation works.
Frankly, I'm glad to be rid of it!
I remember reading somewhere that when everything was taken into account, Bula needed a $35+ crude oil price, just for break-even...which doesn't leave much of a margin, especially given what they typically get for Bula oil!
From what I understand, Oseil will eventually offer much better margins than Bula...so I guess, if I had to make a choice, I would choose the 450 barrels per day from Oseil over Bula any day.
Anyway, LIO is about as speculative as they come, so I can't see any need to get too excited about anything just yet!
I guess if EGO can go for a run...anything can!
Cheers!
LIO Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
