rbs research after drill results

The following is the commentry from RBS after the Cornea results yesterday.... Enjoy:

Key points:
Moby Oil and Gas Ltd (MOG) today announced that drilling operations at Cornea-3 have now concluded
The Positives associated with the findings:
o Came in pretty close to expectations - intersecting the main reservoir 2.2 metres deep to prognosis is about as good as you can expect from seismic.
o Obtaining good oil and water gradient data. Prior to drilling the well there was some uncertainty over the location of the oil-water contact in the field. This data should provide some certainty around the quantity of oil in the field.
o The Negatives:
o No oil sample - only one sample taken in the field previously and it was hoped that a new sample here would provide better data to more accurately estimate the potential field recovery factor.
o The Lower Haywood formation contained no hydrocarbons - though this was an exploration target at this location anyway and not the main game.
o Well took longer than expected to drill - mainly due to having to cease drilling for 2 days because of the proximity of Cyclone Laurence. As long as no cyclones interfere with Braveheart drilling operations, MOG should have sufficient cash to fund its share of drilling costs.
o Overall:
o Some valuable data collected, but some useful data wasn't able to be collected. MOG will be able to develop an improved understanding of the field potential and economics.
o The rig now moves to Braveheart prospect, which should spud in the next day or so.
Valuation Implications:
o Our relative valuation estimate for MOG is unchanged and remains our preferred way to obtain exposure to the Artemis well. We carried no value for Cornea in our MOG valuation estimate, and whilst it may be possible for Cornea to be developed in future, it will require a higher oil price environment. Exposure to the upcoming Braveheart well provides substantial upside exposure for MOG shareholders (> A$0.80/share in an oil success case), albeit high risk.
o With the MEO share price at 44 cents, our relative valuation for MOG improves to 30 cents for Artemis exposure alone. This is slightly higher than previously advised due to the lower number of MOG shares issued than previously anticipated (288m vs 310m) and a higher MEO share price.