Movement At The Station, page-12

Some posts from 1LongJohnSilver a fellow traveller, from the LSE/AIM board.
I hold similar opinions, hence my posting it here for others to enjoy.

Start from the bottom and work your way up.

1LongJohnSilver
Posts: 636
Funding
Sat 10:28

As of the quarterlies 30th June (next quarterlies ending 30th September expected in a couple of weeks )
We had approx. $10.3 m cash plus any revenues so far from 77H production, to be revealed in the September figures.

We then have the 185 million options that should they be exercised if my calculations are correct would bring in around $15 million cash and give us a total issue of shares of around 800 million ( Not a lot when you consider the potential that could be realised with the extra money.)

Exercising of the Options in my opinion is much more preferable than seeking funding from an institution that would definitely sell down any issue of extra shares whereas option holders I believe would not do in the same detrimental manner.

So I think we are sitting pretty at the moment.

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1LongJohnSilver
Posts: 636
£1 (Part 2 )
Sat 10:01
Following on from a successful 77H well the next well in the plan is a 1200m horizontal section in the X,Y zone at location G which will be drilled into an area which previously tested oil. this well has a horizontal section 3.5 times longer than 77H.
Again on success the data from this well will be used to upgrade the RECOVERABLE reserves from this zone.

Now the juicy bit for me. The second well in the plan is the deep vertical well to test the X,Y,Z zones. This is testing the deeper zones ( Z ) that Netherland Sewell have ESTIMATED contain around 11 billion barrels of oil plus gas.

If the vertical well intersects oil in the deeper zones it will be completed for a future side track.
Again the data will be used to add Reserves and prove up the oil in the deeper zone, that is already interpreted to be hydrocarbon bearing from vintage wireline logging.

The next two wells are anticipated to be drilled from 76H well pad into the X,Y zones again adding to production and reserves.

The companies intention is then to drill ten wells per year if all goes to plan.

I will let you all consider the potential here, the revenues to be gained and the reserves to be added to our acreage.

Oh and then we are expecting a JV Partnership for Canning sometime.

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1LongJohnSilver
Posts: 636
£1 ( Part 1 )
Sat 09:36

Why this will be £1 a share and more.

The extract below is from the agreed forward drilling plan submitted to the Indian Govt. April,2013.

' The firm horizontal well at Location D1 (Cambay-77H) will address the remaining Proof of Concept issues subsequent to the suspension of Cambay-76H; specifically the drill out, flow-back and production test from a modern horizontal well with multi-stage fracture stimulations. The well is designed for a simple 350 metre horizontal completion in order to minimise risks and incorporate lessons learned from the previous campaign.

The contingent drilling programme is predicated upon the successful flow-back and production test results of Cambay-77H, the firm horizontal offset well. The vertical pilot contingent well and horizontal well at Location G is designed to test the fluid type distribution across the Contract Area, and will be targeting an area that has tested oil from the X and Y zones in the past. If successful, the well will be side-tracked to a 1200 metre horizontal and stimulated by hydro-fracturing.

The deep vertical contingent pilot well at Location A is designed to test the fluid type distribution to the east of the Cambay-76H location. This is down-dip and proximal to a vintage well which previously intersected the X, Y and Z zones and which are interpreted to be hydrocarbon-bearing on the wireline logs.

An additional two contingent production wells at Locations D2 and D3 may be drilled from the Cambay-76H drilling pad, which will be extended to accommodate this activity. These wells will be designed with extended horizontals based on the success of Cambay-77H.

In the event of a successful extended production test for each well, the wells are likely to be put into production via selling off-spec gas as well as associated oil and condensate. All the production data will be used in updating an independent reserve assessment. '

Right so what do we know so far. Well 77H is being drilled into the X,Y zones which Netherland Sewell has indicated in the CPR contains discovered in place 1.633 billion barrels of oil together with associated gas.
This is the same zone that 76H targeted ( which flowed back oil/gas/condensate during milling ) and the same zone that 73H intersected in a conventional vertical well that flowed a small amount of gas and condensate.

On completion of 77H all the data from the 3 wells will be re modelled to provide an upgrade in the RECOVERABLE reserves for the X,Y Zones. This is the first step in proving how much we can recover from the 1.633 billion barrels in place and will be a significant piece of news when it arrives, as will flow rates from 77H which we know is producing 300% more oil than anticipated and therefore bringing in revenues more quickly.