As was explained to me, the gas pressure has not dropped nearly as much as expected and the gas separatators are not designed handle the volume at that pressure. This has necessitated a throttling back in oil production.
I have been told that there has been no downgrade in oil reserves but the high gas pressures imply that there is significantly more gas. They are in the process of modifying another FPSO to handle gas separation at the higher pressure but it will be a year or so away before the FPSO will be commissioned.
Long term this has increased the project valuation. However traders do not like the swapping of short term revenue for longer term gain. I have seen the following numbers quoted "CY’07 earnings forecast has been reduced by 25% as a result – now $73 million. CY’08 earnings reduced by 20% - now $37 million. CY’09 and ’10 earnings forecasts up by 13% and 31 % respectively".
AZA
anzon australia limited
