Thanks for the link, an interesting view on things.
It would be fair to say that KEY has a number of challenges with the commercialisation of gas in the region which we are all aware of, ORCA's presence is just another one. You could also throw in the capitulation of global markets which will impact the speed of KEY achieving an economic return of their investment there. Lucky for KEY holders, they are an internationally focussed company with assets in three continents where revenue streams are possible.
IMO..it would also be wise not to totally discount what is going on with the recent drilling of DPL's Mihambia #1 well which has definite strategic implications for Key. It is no coincidence that KEY's sp has risen 60% since the drilling started. After all, OIL is what Ken & the boys are really after IMO and if DPL are successful, you can bet you will see a shift of focus pretty quickly.
From KEY's Tanzania update on Feb 5.
West Songo Songo (WSS) The WSS licence area, between the producing Songo Songo gas field and the Tanzanian coast line, is prospective for Neocomian age hydrocarbon traps similar to those in the nearby Songo Songo and Kiliwani North gas fields. Based on detailed geological studies since winning the licence in May 2008 KEY now believes the West Songo Songo area has the potential to contain a prospective resource of approximately 735 million barrels (MMbbls) of oil or 1.3 trillion cubic feet (tcf) of gas (combined P10 pre drill estimates). Key’s WSS licence borders the Mandawa licence area operated by Dominion Petroleum Ltd. Dominion Petroleum Ltd has recently started drilling the Mihambia #1 well which could have important strategic implications for Key. Publicly available reports suggest that the Mihambia #1 well is targeting multiple reservoir targets of between 38 and 244 million barrels. Drilling is expected to take approximately 45 days. If successful this would be Tanzania’s first onshore oil discovery. Key Petroleum believes it has geologically similar targets within its West Songo Songo licence. Highly-regarded French exploration company, Maurel & Prom, has also taken a 50% interest in the Mandawa block. RPS Energy, a multi-disciplinary petroleum industry consultancy, in a Competent Persons Report, prepared for Dominion prior to its admission to the AIM in London in December, 2006, estimated that the Mihambia prospect had “mean unrisked” resources of 176 million barrels.
So, in my view all is not lost with the current situation and KEY’s overall future growth prospects.
Cheers R
KEY Price at posting:
9.3¢ Sentiment: ST Buy Disclosure: Held
(20min delay)
