nathanblack,My understanding of events seems quite different...

nathanblack,

My understanding of events seems quite different from your's.

I totally agree that the time delays are very frustrating.

Perhaps part of the problem is that Jupiter has an old style "licence" and instead of being a help in some ways, its a problem in others as the government is tuned up for dealing with things the way it wants them going forward rather than dealing with the old ones.

The self inflicted delays don't help at all either. J-53 well completed January yet we still don't have offical "proper" test results 4 months later, all of which delay the start of the application process and end up causing production delays at the end of the day.

I have to disagree with you about individual wells - I have siad this to you before but you don't seem to have taken it on board.

J-50 was not completed (stimulated) in the best possible way. Jupiter changed the stimulation process after that well and got far better results from the subsequent wells. The well was only flowing at 220 bopd on a 10mm choke during testing.

They also wanted to get the well through the regulatory process without problems so applied for a lower production rate from the government than the well could do, to ensure there was no delays in that regard. That is why I believe the well is only doing around 100 bopd.

I think they intend to go back and try and re-stimulate the well at some point in the future once everything is up and running properly and hope to get the well to do around the 300 bopd mark then. So I wouldn't say it was that much of a disappointment more a learning experience.

The vast majority of the current production is from J-52 around 500 bopd and J-51 will do the same maybe a little more. Hopefully when we get the results from J-53 it will be in the 500+ bopd region as well.

I agree international exports of oil will be key driver to the companies success. However things have so far not quite gone according to how they were envisaged, due to several factors.

The original line of thought was one where they would get to the trial production licence stage and as part of it they would be able to apply for some of the oil to be sold internationally because the domestic market was full to capacity and therefor the oil couldn't be processed locally.

However this not going to happen now for several reason's one being the delay in the major extention of production from a field BP is involved in, which would have taken up most of the spare refining capacity within the country, with its 100,000+ bopd increase in output. New requirements for crude from other sources within the country. The time delays from when the TPL was expected to be granted.

So yes the TPL might have allowed some international sales which would have been good to show the process worked and the company got the money for the sales, as well as the increased sales price for the oil. This would have given the shares at least a partial re-rating.

However bear in mind a TPL is not really about international sales. Its about giving company's time to develope new fields properly. It allows them to sell some production and get some revenue in while they drill enough development wells to bring the field into production at a reasonable rate and to build the infrastructure to handle the oil its going to produce.

This I think is where the large capital raise talked about at the time of the AIM listing came from. If market conditions had allowed them to raise such a sum of money, they could have gone out and simply built the infrastructure required to handle the oil from Akkar East without having to think about other things and got the actual production licence much quicker.

Now they are on a much tighter budget and have to work things out as they go. They have to drill another exploration well to keep the licence in good standing and if it is a success then they will have 2 oil fields to deal with. With other prospects located even further to the south-east, so where is the best and most cost efficent location to put your infrastructure then to deal with 2 or more fields? To cope with production of maybe 10,000+ bopd rather than maybe 5,000 bopd from Akkar East, the size of the pipelines and gathering systems required etc.

Yes international oil sales are more profitable, but $52 a barrel for domestic sales should not be dismissed lightly. As at the moment the company has had to spend very little on infrastructure for its producing wells. They will be banking far more money than you expect, because a lot of the money has already been invested in the drilling of the well, so will go through as D&A (depreciation & amortilisation) and is really the recovery of money already spent.

Hopefully the TPL for J-51 & J-53 will take much less time to be approved and production can get to 1600 bopd in Q4.

As for the full production licence I'm looking towards the end of 2013.

As for share price or market cap of the company, well that depends on what they find in the other prospects. Even if they found nothing we will still have 2P reserves of @35M barrels of oil. I see no reason at all for the company to be valued at anything less than $10 per barrel of 2P when it has a full production licence. I'd be looking for a market cap of $500M+ to be honest, depending on the oil price at the time.

Hope that helps

LOTM