Falkland Oil and Gas Limited
EPIC : FOGL
Shares in Issue : 320 million
Web Site : http://www.fogl.com/fogl/en/home
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Falkland Oil and Gas Limited
EPIC : FOGL
Shares in Issue : 320 million
Web Site : http://www.fogl.com/fogl/en/home
Already have an account?
Login here
It looks like the Falkland Islands Government want to make it very clear where they stand with Argentina.
http://www.bbc.co.uk/news/uk-18412195
http://falklandislands.fco.gov.uk/en/news/?view=News&id=774576382
Why do they want to hold a referendum now, 30 years after we so convincingly trashed the Argies?
The preference of the Falkland Islands' population has never been in any doubt.
Have they discovered that they have something worth protecting?
Excellent move - checkmate - game over............... nothing they can respond with to answer this, which falls totally under what the UN pushes for "self determination".
:)
Cairn were the top contender for farm in partner, but as the FOGL RNS said, the potential farm in partner had other corporate things to do and wanted them done first before committing.
If it is CNE then hopefully their purchase of NPE announced today is the last of the events to be done before the deal can be done with FOGL.
Interesting times ahead now for many reasons.
FKL raising money to invest in the infrastructure for O&G production in the future - all systems are go it seems for development.
http://www.investegate.co.uk/Article.aspx?id=201206140700133336F
Good news for all Falklands companies who have oil, or condensate/gas or who are soon to be drilling for oil........
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From yesterday's statement on the Falklands referendum in the UK House of Commons.
Jim Shannon (Strangford) (DUP): I thank the Minister for his commitment to a referendum for the people of the Falklands. Oil has recently been discovered off the Falkland Islands. Will he assure the House that full protection will be given to any of the companies exploring for oil, that the benefit of any oil revenue will go to the people of the Falkland Islands and that any aggression from Argentina will be seen off?
Mr Lidington: The revenues from any successful oil and gas development will indeed accrue to the Falkland Islands Government. They have voluntarily said that they would want to share some of that revenue with the United Kingdom to offset the cost of our defence expenditure towards the islands. I can assure the hon. Gentleman that we will do everything necessary to protect the legal right of the Falkland Islands to continue with hydrocarbon development.
Interesting new summary of the USGS estimates of undiscovered oil and gas in South America which also covers area 18 - Falklands.
http://pubs.usgs.gov/fs/2012/3046/fs2012-3046.pdf
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Another buying volume spike near close today on BOR and strong move up at the end - could be pointing to news very soon - keep a watch on it if interested imo, any good news from BOR will have a positive impact on FOGL for sure.
FOGL a chosen stock a couple of times...........
http://issuu.com/spreadbetmagazine/docs/spreadbet-magazine-v6_generic?mode=window&pageNumber=1
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Farm out done. Always said FOGL is the most attractive of all companies down there and therefore would be first to farm out, and so they are..........
http://www.investegate.co.uk/Article.aspx?id=201206260700181122G
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http://www.proactiveinvestors.co.uk/companies/news/44627/falkland-oil-gas-reveals-tie-up-with-french-utility-edf--44627.html
Falkland Oil & Gas reveals tie-up with French utility EDF
8:23 am FOGL says it expects to receive the Leiv Eiriksson rig in July, once fellow Falkland explorer Borders & Southern has completed the Stebbing well FOGL says it expects to receive the Leiv Eiriksson rig in July, once fellow Falkland explorer Borders & Southern has completed the Stebbing well
AIM quoted Falkland Oil & Gas (LON:FOGL) today confirmed that it has sealed a farm-out deal ahead of its upcoming drill programme.
The deal sees French....................................
Interview to listen to :
http://www.proactiveinvestors.co.uk/companies/stocktube/1211/canaccord-says-the-falkland-oil-gas-farm-out-deal-is-overall-good-for-investors-1211.html
And FT comment :
https://www.facebook.comhttp//blogs.ft.com/beyond-brics/2012/06/26/falkland-islands-geopolitical-footballs-going-home/
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Edison International Spa (majority owned by EDF) are very much into natural gas, not something that should be ignored given the likely gas condensate in the southern licenses - and the potential of oil and gas at Loligo.
Gas at Loligo is commercial, being many many Tcf potential - no surprise to see a gas development/production/storage orientated farm in partner.
Any oil found will be considered the massive upside here........gas will be the primary interest and expectation of EDF methinks.
http://www.edison.it/en/company/who-we-are/group-structure.shtml
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Some interesting comments from TB in this write up :
http://www.usanews.biz/2012/06/falkland-oil-and-gas-sells-exploration.html
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Borders and Southern AGM presentation today, link below. As everyone should know they are drilling near to FOGL's licenses area's - Darwin well complete and Stebbing well ongoing.
http://www.bordersandsouthern.com/media/pdf/AGM2012.pdf
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faldiz attended the BOR AGM and these are his notes :
"..............AGM was very lively, with one or two people challenging the limited information coming from the company.
It's a point that has puzzled many of us, but to my mind the following points explain it:
- "how could [an oil major] make a hostile bid without knowing what we have"
- may want to bid for additional open licences
- Board hold about 60m shares between them [more than in any other FI explorer] - want to maximise value
The board is experienced, oil exploration is competitive - they want to keep competitive advantage.
I'm not going to try to reproduce all of the technical detail (there was quite a lot) - hopefully Gramacho and others will fill in, but what I will to is give some impressions:
As to what they have: Darwin (east + west) is 1.88 TCF gas minimum, 2.5 best, 2.88 max.
liquid content: board would not be drawn at this stage, but a chap who has consulted for both BOR and now FOGL was willing in conversation to put it at 50m to 150m barrels per TCF, but most likely around 80-100. which gives us around 200m barrells most likely but range 100 to 420. Commercial needs to be 'in the hundreds" (Obee).
--> my view is it will be commercial. Full analysis 10 weeks from 18th of June, but some results, eg liquids content sooner - perhaps a few weeks.
Some revealing comments
- there will be another BOR campaign, it will be 5+ wells, mixture of appraisal and exploration. (Obee, response to question)
- "they will still be drilling in FI in 40 years time" (Dobson)
- BOR prospects "have best potential i've seen in 20 years in oil industry (mostly BHP)" (Fleming)
- Looking for rigs now
- would have first call on 5th slot, but at moment not certain/available
Burgess and Bute would be order 1bn barrells, if successful.
SP will rise, just wait for fund raising time.............."
BOR AGM notes from "TheFlyingMule".......
......Good evening all. Here is my ‘summary’ of the AGM today. It’s a bit in depth but I hope it’s of some use. I do have a recording of it, which I will try to upload when I get more time but these are my thoughts on the morning’s events. I’ve reproduced my notes as best I can, though I can’t guarantee the accuracy and there are others that are far more qualified than me to comment on the technical aspects but, again, I hope it provides at least a flavour of the meeting.
An excellent day all told. I’d recommend going to the AGMs of these companies – the opportunity for access to the BOD of multi million pound companies doesn’t come along very often!
I imagine there were around 50 shareholders there (I think last year’s was 15 or so?) as well as various analysts, PR people and the BOD of course. The meeting started at 10:00 and went on for nearly an hour and a half, which left just half an hour for further questions on the sidelines before everyone was ushered out before the next corporate do commenced.
Harry Dobson (HD; Chairman) kicked things off with the resolutions and they were all duly passed unanimously with a show of hands, including amusing witterings from HD proposing himself (I’m not sure Mr. Kozel will get the same reception for the remuneration resolution at GKP’s AGM in a few weeks..!).
That wrapped up swiftly and Howard Obee (HO; CEO) then launched into the AGM presentation. This wasn’t the same presentation as is now on the website – more on that later – but he talked us through it with questions from the floor as we went along.
HD emphasised at the beginning that there would be no discussion about Stebbing. He initially said it was ‘tight’ – my first thought was ‘oh no, not another DESaster with their tight sands at Rachel’. Then I thought he meant time was tight, as in there have been delays and, finally, with a request for clarification from the floor later on, he confirmed that ‘tight’ meant there was essentially a communications blackout regarding Stebbing! Drilling continues…
Anyway, on with the show.
Darwin:
- The numbers given were for Darwin East and West. Shallow marine environment in the lower cretaceous.
- Condensate samples were shipped back to the UK. It isn’t permissible to fly the samples on commercial flights so they could either spend several hundred thousand dollars chartering an aircraft or they could sent it by ship, which they obviously have done and it took four weeks to arrive.
- The geological results were extremely close to prognosis with the top of the reservoir predicted to within one metre – not bad for rank wildcat drilling eh?! [Over the 4,800 metres, that’s an error of 0.02%!!]
- Condensate value depends on its content. They BOD would not be drawn on ‘possibilities’ but their overall enthusiasm would suggest they are confident.
- Gas Initially In Place figures were given (Min 1.88TCF, Most Likely 2.44, Max 2.88). Liquids content is subject to on-going analysis. 10 weeks from 18th June.
- The TD of the drill ended up in water bearing sands. They felt there is a possibility of more sands beneath the water but seeing as they already had a valuable condensate find, they were content to leave that for another day. [I suspect they were wary of any more cost overruns and opted for prudence]
- Delays were caused by problems with the rig itself and also due to taking a long time to drill through some of the rock formations. Extra casing needed to be set to stabilise the hole. Rank wildcatting will always be a laborious process so not unexpected imo.
- Part of the extra time to drill through the rock was due to using water based drilling mud rather than oil based mud. It’s more environmentally friendly to use water but doesn’t perform as well it seems!
- Two thirds of the $40 million cost overruns were related to the other supply costs of hiring a rig.
- We were treated to the logs of Darwin; this information, along with the seismic slides, is not in the presentation on the website. I would love to pore over them in more detail rather than craning my neck at the slides from a distance but I’m sure Gramacho (delighted to put a face to the name at last but disappointed about the lack of elbow pads!) will be able to provide some colour. Without giving too much away, HO seemed quietly confident when discussing the gas readings.
- MDT gave the Gas-condensate gradient information, which told them of the condensate.
- The source rock wasn’t penetrated. HO believes that is still below where they drilled Darwin. Geochemistry testing of the cuttings to come in the next few weeks which may help answer whether the condensate was a result of the quality of the original source rock or whether it was a function of the thermal and migration history of the hydrocarbons that were generated. That will then aid prediction of distribution of oil, gas and condensate in the region.
Rig:
- Excellent team on board the LE. Having a high spec rig is all good and well but if there aren’t the appropriate operators, it’s potential won’t be realised. Fortunately there are excellent crews on the rig!
- The rig itself is performing very well. A few days ago there were 18/19m waves and it carried on drilling.
- Environmental conditions are less harsh than expected. Originally, it was thought they would be similar to those west of the Shetlands. It seems conditions are more benign than there. This is in part due to the southern tip of South America essentially acting as a windbreak to the large weather systems that come in from the west from the Pacific and protects the Islands from the worst conditions as the fetch distance is greatly reduced. [nice to know Argentina still helping out, even if they don’t want to ]
- BOR own the rig contract. When it was asked whether there would be a fifth well in this current campaign, HO said it was a possibility but it would depend on timings as it is due to go to Scandinavia after finishing in the Falklands. [my impression was they weren’t particularly keen on drilling another well; they have enough on their plate and they don’t want to be rushed into something just for the sake of it.]
Future Campaigns:
- Appraisal of Darwin should be relatively straightforward.
- The next campaign will have “a lot more wells.” Exploration will take place alongside the appraisals and would be at least 5 wells. Rig availability the key issue.
- Open acreage will be of interest to them eventually – hence the relatively hush-hush nature of their communications strategy.
- 3D; both new and re-processing existing. They were absolutely delighted with the ‘superb’ data and that was what put Darwin on the map, so to speak.
- Currently tendering for 3D seismic with the aim of shooting it in the southern hemisphere summer. Currently seems to be a good availability of seismic boats.
Prospects:
- Next 3D to be shot to the north of Darwin.
- Covington is a tilted fault block to the north of Darwin but only on 2D. This is a priority. It looks uncannily similar to how Darwin did on 2D. They then got the 3D and the rest is history! HO optimistic Covington will look similar to Darwin with the 3D.
- Deeper targets of Stokes and Sullivan.
- All prospects are a similar age and, with the positive result of Darwin, reduces their risk profiles compared with six months ago.
- Burgess and Bute fan systems ‘down the slope’ in the deeper marine environment. As a rough indication, Bute could be 1 billion barrels for that sized fan.
- Prospect inventory with resource estimates to come when they re-evaluate, including other new leads.
- Darwin smallest prospect in terms of area (with 2.5TCF of gas).
Funding:
- Lots of options, especially thanks to having 100% of their acreage.
- HD was extremely confident of getting any $$$ that may be required. He was fairly tight lipped but felt with the masses of top quality data they have, they wouldn’t have any trouble getting funds when needed.
Communication Strategy:
- It was inferred the BOD weren’t working in the best interest of shareholders by being so averse to publishing detailed information. HD was reasonably unimpressed with this suggestion I think. Commercially sensitive information is the key; it’s an excellent bargaining chip and should stop a hostile takeover.
- Bulletin boards were discussed. iii called HO and said the site had had 23,000 hits leading up to Darwin results.
- HD didn’t like bulletin boards as he felt they encouraged rumours with ramping/de-ramping etc. [Though, of course, if they were to release more information, there would probably be less speculation...]
- Concerning relations with the Falklands Government, HO said they had excellent relations with them and found them to be extremely helpful as and when they required. When asked if he thought FIG may improve royalty terms to encourage development of Darwin if the condensate results weren’t so promising, he thought it unlikely seeing as the terms are already extremely favourable. He was more concerned they may shift the royalty rates up now they’ve found something!
My 2p Worth:
BOD very much in this for the long term with HD stating this will see him out until the end of his days. They do have incentives, in the form of 60-70 million shares between them.
Technically, I think they’ve done a fantastic job. Their prospect inventory looks very interesting and they are keen to tick all the boxes in a timely and appropriate fashion. They will not be coerced into publishing data just for the sake of it. [this largely related to a question regarding the condensate yield. Gramacho very kindly offered his prediction, which I’m sure he’ll come to later]
HD believes the market doesn’t understand the significance of Darwin.
On a personal note, I like to see a strong technical side to the company and I have to say I was very impressed with the technical story at BOR. They seem to be going about things in the right way, which, given time, will reward patient investors.
I would say they could work on marketing the company better. Yes, they have a long term view but a higher share price doesn’t do anyone any harm!
That’s all for now; a long but very worthwhile day.
GLA,
TFM............
I like the last line "......Argentina lost the Falklands over Repsol"
http://oilprice.com/Geopolitics/South-America/Business-as-Usual-for-Big-Oil-Despite-Falkland-Tensions.html
Business as Usual for Big Oil Despite Falkland Tensions
By Jen Alic | Thu, 05 July 2012 22:44 | 0
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While tensions between Britain ..............................................
The "idiots" guide to the Loligo prospect.
Loligo will be the first of two drills by FOGL.
Loligo has a P50 Oil In Place (OIP) estimate of nearly 16 billion barrels of oil
In the event Loligo is all oil it is expected the P50 recoverable barrels would be in the region of 4.7 billion barrels.
In the event Loligo is gas it is expected the P50 recoverable gas would be 25 TCF.
There is considerable upside potential to the P50 OIP figure, as of course there is downside as well. Loligo could end up being small or nothing, or indeed it could end up being 25 billion barrels of OIP.
The bare minimum requirement for economic gas development is 5 TCF, however this is not that attractive. The economics of gas development in this location become hot, hard and horny attractive when you get to 10 TCF recoverable or more. Therefore should Loligo be dry gas it is extremely commercial given 25 TCF P50 recoverable gas estimates.
Loligo has 5 targets, these being T1 at the top, T1 deep, Trigg, Trigg Deep and then Three Bears at the bottom.
The work done by BHP suggests the upper couple may be gas and the lower ones more likely oil. This is why FOGL tried their best to put themselves into a position to drill "Loligo Deep Well" which will go through all 5 sections.
The size of each target zone (based on oil) as we go from top to bottom is :
T1 = P50 OIP of 5 billion barrels = 1.5 billion recoverable barrels.
T1 Deep = P50 OIP of 2.15 billion barrels = 644 million recoverable barrels
Trigg and Trigg Deep = P50 OIP of 3.24 billion barrels = 969 million recoverable barrels
Three Bears = P50 OIP of 5.3 billion barrels = 1.59 billion recoverable barrels
(For a comparison Sea Lion of RKH is OIP of 1.3 billion barrels and circa 400 million recoverable barrels from that OIP figure)
As you can see Loligo is potentially around 12 times larger than Sea Lion.
Loligo has had several 2D seismic studies done giving very good infill data, and 2D with infill is far superior to standard 2D. BHP also did extensive studies and the conclusions are there are strong DHI's for the Loligo prospect - sadly for BHP their South American mining interests were used against them, IIS, to make them drop their FOGL interest, something they did not want to do but were pressured into. They wanted to retain back in rights given they know how prospective it is, however the Falklands Government refused to allow back in rights and BHP ended up having to let go of the lot in order to preserve and protect their South American mining interests in the face of Argie/Brazil pressure.
RKH recently accepted what I would call a "low ball" offer from PMO, its appears PMO was the only bid on the table at a price level that could be considered to be accepted. There are reasons for a low ball offer, one being presently Sea Lion is a stranded oil find, Sea Lion is not that big, Sea Lion is going to be difficult to develop based on the thin multiple sands (meaning lots of wells needed and difficult EOR (Enhanced Oil Recovery)). But anyway, using the 4.7 US$ a barrel that PMO aid to be conservative you get :
4.7 billion recoverable barrels of which 75% is FOGL interest.
Thats 3.525 billion barrels to FOGL x 4.7 US$ = 10.7 billion pounds sterling.
10.7 billion divided by 320 million shares in issue = 33.5 pounds per FOGL share should Loligo be full of oil and thats based on "low ball" figures.
And that is just the Loligo prospect (FOGL has over a hundred leads in the license areas with potentially 300 billion barrels of OIP and 100 billion recoverable barrels potential).
FOGL is considered the "Jewel in the Crown" of the Falklands, and its no surprise a multi-billion major like EDF farmed into FOGL via Edison, and also no surprise that FKL hold lots of FOGL shares.
Loligo is a classic Gulf of Mexico Class 3 AVO type anomaly.
To allow people to know what this means, see below :
1. AVO Class 3 Gas Sand:
• Unconsolidated sand, porosity greater than 25%, usually Tertiary in age.
• Gross interval velocity usually less than 8,500 ft/sec (2,650 m/sec). Gas and oil zones are bright spots on the stack section and on all offset (angle) stacks.
• AVO: The reflection amplitude, with respect to background, increases slightly with increasing offset distance or angle.
• Note: A Class 4 Gas Sand has same the characteristics as a Class 3 Gas Sand except the reflection amplitude decreases with increasing offset, caused by a hard shale or carbonate (shear velocity higher than gas sand shear velocity) on top of the sand.
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2. AVO Class 2 Gas Sand:
• Moderately consolidated sand, porosities 15% to 25%.
• Gross interval velocity in range of 8,500 ft/sec to 12,000 ft/sec (2,650 m/sec to 3,650 m/sec).
• Acoustic impedance of gas sand and encasing shale about equal.
• AVO is strongly more negative with increasing offset distance or angle.
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3. AVO Class 1 Gas Sand:
• Very consolidated sand, porosity less than 15%.
• Gross interval velocity usually greater than 12,000 ft/sec (3,650 m/sec).
• On stack seismic data, a large positive amplitude for a wet sand decreases to a smaller positive amplitude for a gas sand ("dim spot").
• AVO is less positive with increasing offset (angle) and may have a phase change at far offset distances.
The boundaries between classes are gradational, and therefore it may be necessary to evaluate amplitude anomalies in two classes.