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
FOGL's Loligo is the single biggest well to be drilled in 2012. People are mistaken that Chariots Nimrod is bigger, but its not.
Nimrod is P50 recoverable barrels potential of just 4.361 billion barrels (page 23 of the latest CHAR presentation).
Loligo is P50 recoverable barrels potential of 4.7 billion barrels.
(The 4.9 billion attributed to Nimrod is the "mean" of the P10/P50/P90 figures - when you compare P50 of Loligo to P50 of Nimrod - Loligo is the biggest drill anywhere in the world this year).
And of course its 75% owned by FOGL - the biggest drill and the biggest potential upside in the world this year.
Edison Reserach update on FOGL.
http://www.edisoninvestmentresearch.co.uk/search/Falkland%20Oil%20&%20Gas
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Considering the upper targets at Loligo are most likely gas, and the lower ones probably oil - here is the result I am hoping for from the 5 targets to be drilled at Loligo.
T1 = 9 TCF recoverable gas on a P50 basis.
T1 Deep = 3.8 TCF recoverable gas on a P50 basis.
Trigg and Trigg Deep is 969 million recoverable barrels of oil - P50.
Three Bears = 1588 million recoverable barrels of oil - P50.
This gives a 4.7 bboe figure in total (4.7 billion barrels of oil equivalent, if you convert the gas to boe and add on to the oil barrels).
That result would give 12.8 TCF recoverable (well over the 5TCF recoverable minimum for economic development in the South Falklands and also well over the 10TCF level at which development becomes very attractive for gas).
On top of that for short term there would be circa 2.5 billion barrels of oil for quick development.
Rig is now underway, moved about 50km over night in the direction of Loligo.
http://www.marinetraffic.com/ais/default.aspx?mmsi=308243000¢erx=-58.13182¢ery=-53.6912&zoom=10&type_color=9
The fun now begins for FOGL..............
Rig arrived safely at the Loligo drill site at 10pm UK time Thursday 2nd August evening.
http://www.marinetraffic.com/ais/default.aspx?mmsi=308243000¢erx=-57.75184¢ery=-51.57723&zoom=10&type_color=9
The spud RNS is the key now - if it says "...drilling operations are expected to take between 45 to 60 days and a further update will be given when TD is reached and testing complete......." it will mean just one RNS is coming.
If the spud RNS says "............drilling operations are expected to take between 45 to 60 days..........." with no mention of next update, or it says further updates will be given as needed - then we are on for multiple RNS's throughout the drilling.
The board did intimate at the AGM that as there are 5 individual potential company making targets being drilled at the same time, they may release multiple RNS during the total drilling of Loligo, rather than a single update at the end.
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Little reminder of the farm in partner (who farmed in recently to 25% of FOGL's of FOGL's northern SFB licenses and 12,5% of FOGL's southern SFB license areas). They are interested in both gas and oil, and likely will have been attracted to FOGL and Loligo due to the high chance of the upper targets, T1 and T1 deep being circa 12 TCF of recoverable gas (P50 basis). They are the perfect partner to develop a gas discovery, a gas/oil discovery or an oil discovery.
Edison SPA (majority owned by EDF)
15.2 billion cubic meters of available natural gas supply. Edison accounts for 19.60% of Italy’s demand for natural gas, 83 concessions and exploration permits in Italy and abroad, 3 natural gas storage centers, 1 LNG terminal, 49.8 billion cubic meters of hydrocarbon reserves.
Their brochure is well worth a read, PDF link below.
http://www.edison.it/media/brochure-edison-gas2012.pdf
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Below is a very rough (and not to scale) idea of the well bore and where the targets are in relation to planned drill/casing size.
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I have tried, very roughly, to compare the actual drilling depths, below the mud line/sea bed, for the RKH Sea Lion well and the Loligo well of FOGL.
As below. There is a difference in total depth of around 924 meters, as Sea Lion sea bed was 476 meters below sea level, and Loligo sea bed is 1400 meters below sea level. However if you take purely the actual drilling below the mid line, the below is a rough comparison.
Obviously with 1km extra length on the drill sting - operations like casing, changing bit etc... take much longer.
Anyway, interesting to compare.
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Added the drilling schedule on as well to the drawing. BOP will be installed once the 20" casing is run to 719 meters below the mud line, all before the drill starts downwards into the T1 upper target.
Stunning news.
Noble farms in and also Loligo spuds.
Love the terms of the farm in !!!! Well done FOGL.
Roll on Loligo.
Notice - there is no talk about updates in the spud RNS - this now leaves them open to update once, or three times, or five times during the drilling and various target zones.
http://www.investegate.co.uk/Article.aspx?id=201208060700073473J
http://www.investegate.co.uk/Article.aspx?id=201208060700073302J
:)
Big news.
Firstly - FOGL will now have 40p a share left over in cash after drilling Loligo and Scotia. So the downside is now limited to 40p with 2 dusters !!! :)
...........The farm out substantially improves FOGL's financial position. In the event that the Loligo and Scotia exploration wells are drilled within budget, it is estimated that on completion of the wells the Company's cash balances will not be less than $200 million which will provide the Company with significant funds for additional exploration work. .........
Secondly, now have a big US company involved, along with Italian/French Edison (EDF).
........Charles D. Davidson, Noble Energy's Chairman and CEO, said:
"Noble Energy is looking forward to working with FOGL and Edison in this new exploration joint venture. After careful study, we believe this region is very consistent with our new ventures exploration strategy of entering regions that provide prospects that are not only material in size, but also where initial success can de-risk subsequent opportunities. In this particular case we have already identified numerous oil leads on 2D data with an unrisked gross resource potential exceeding 6 billion barrels of oil. Once completed, this transaction will increase our worldwide leasehold by over 70 percent gross and 40 percent net."
Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.
http://www.sparkstrader.com/merchant-securities-research-note-buy-falklands-oil-gas-fogl
Merchant Securities research note: Buy Falklands Oil & Gas (FOGL)
Falkland Oil & Gas (FOGL.L)
Farm out to US based Noble Energy - BUY
Price 75.0p
Target price under review
* Falkland Oil & Gas announced that US based Noble Energy (NYSE, market cap circa $15bn) has farmed into 35% of the company's license areas in the South and East Falkland Basin, excluding certain areas including the Loligo prospect, but including the Scotia Prospect.
* In addition to a $25Mn cash contribution, Noble will fund 60% of the well costs for the Scotia prospect (a two for one carry) and 60% of the well costs for the commitment well in the Southern License area. Operatorship of the relevant areas will be transferred to Noble in early 2013.
* Falkland Oil & Gas also announced that the Loligo exploration well commenced drilling on Friday 3 August 2012 and that drilling operations will take around 60 days.
* We will update our target price (previously 402p per share) to reflect the news flow.
* A two for one carry is generally considered to be attractive for the farm-out of exploration acreage and suggests that Noble is quite keen to participate in the Scotia prospect in addition to other exploration wells.
* Falkland Oil & Gas will be proposing that the Scotia prospect will be drilled immediately following the Loligo well. This is a positive development as we are particularly attracted to the Scotia prospect and the second well of the forthcoming campaign had not been finalised.
* The involvement of a large American oil & gas company in the Falkland Islands is positive from a political perspective and this read-across extends to all the companies operating in the area.
* Falkland Oil & Gas will now hold a 40% interest in the Scotia prospect (down from 75%) and a 75% interest in Loligo (unchanged).
New presentation on the farm out :
http://www.fogl.com/fogl/uploads/companypresentations/FOGL_NobleFarmoutPresentation_Aug2012.pdf
And an interview with Tim Bushell of FOGL :
Link Here
Dow Jones and Company, Inc. 08/06/2012 9:43 AM ET
INTERVIEW: Falkland Oil & Gas Funded to 2015 with Noble Deal
07/31/2012 8:20 AM ET
LONDON--Falkland Oil & Gas Ltd. (FOGL.LN) has brought Noble Energy Inc. (NBL) onboard as its second Falkland Islands oil exploration partner, due to an aligned focus, its track record of quickly developing assets, its technical experience, and additional financing--which will see FOGL funded through its next drilling program and into 2015, CEO Tim Bushell Dow said Monday.
The deal will see Noble earn a........................
Worth a watch - Lex on Falklands/Noble deal.
http://video.ft.com/v/1773416535001/Falklands-oil-bubbling-up-
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Bit of mis-reporting in the media saying results in 2 months (they seem to forget well operations include 14 days allocated to P&A - as was the case with Darwin and Stebbing - 14 days is P&A duration).
Based on normal operational timing and without there being any significant delays the below should be the timescales for final RNS and move to Scotia well location - how many RNS come during drilling operations, nobody knows, could be two before a final RNS about TD and Three Bears lowest target.
Spud Friday 3rd August - KNOWN
Well operations (inclusive of P&A) to be 60 days - KNOWN
Total drilling/casing/testing time circa 45 days - KNOWN DRILLING OPS TIME FROM EIS
RNS after completing casing and any testing of T1/T1 deep ???? - UNKNOWN
RNS after extra casing run and testing on any Triggs find ???? - UNKNOWN
TD reached/wireline run on Three Bears for final RNS 17th September - SHOULD BE
P&A of Loligo 14 days from 17th Sept - TWO WEEKS OF P&A OPS PART OF WELL OPS
P&A complete on Loligo 3rd October 2012 - END OF 60 DAY WELL OPS AS PER RNS
Move to Scotia well location and set up 3 days - NORMAL
Scotia Spud date 6th October 2012 - ESTIMATED BASED ON ABOVE
http://www.investegate.co.uk/Article.aspx?id=201208060700073302J
...........is pleased to announce the Loligo exploration well 42/07-01 was spudded on Friday 3 August 2012..............
...........It is anticipated that the well operations will be around 60 days....................
And no mention of when updates will be made, unlike BOR............. leaving the door open to multiple RNS during the operations period, as was intimated during the AGM.
EIS says 45 days to 50 days drilling time giving overall well operations of 60 to 65 days.
http://img51.imageshack.us/img51/9348/eisfogl.gif
Oil Barrel write up on the Noble deal.
http://www.sparkstrader.com/oilbarrel-falklands-oil-and-gas-fogl-farm-in-review/
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Looking at Noble energy you do see a lot of positives. The development of Tamar and Leviathan, the world's two largest deepwater gas finds. Deepwater drilling Gulf of Mexico (double the water depth of the Falklands areas). Their production activities began with a 34 percent working interest in the Alba field, offshore Equatorial Guinea. In addition to natural gas and crude oil production, related operations include an LPG processing plant where liquids are recovered and a methanol plant. Natural gas produced from the field is sold to the LPG and methanol plants as well as a third-party LNG facility. Their first operated major project in West Africa, Aseng, came online in late 2011 and they expect to bring the next project, Alen, to production in late 2013. And its West Africa I think that draws their attention to the Cretaceous area's of FOGL's licenses.
Add this on to Edison SPA, who are also leaders is developing gas, LNG etc.. and you now have 2 heavyweights in gas on board with FOGL, and no its not surprising given the 25 TCF recoverable potential of Loligo.
But, going back, its West Africa I think that draws Noble Energys' attention to the Cretaceous area's of FOGL's licenses, as West Africa and East Falklands used to be one..........many many years ago.
Noble have had a lot of success in West Africa, and West Africa is analogous to the Cretaceous of the East Falklands, Noble could really be a key here in developing the Cretaceous plays, starting with Scotia.
The Tertiary plays are analogous to the Campos Basin in Brazil, not an area of expertise for Noble but one which a lot of effort has been put into by FOGL.
Its also worth highlighting again at this stage the big differences between BOR's and FOGL's license areas. BOR were drilling the fold belt - high pressure was a very real risk. FOGL are not drilling any high pressure or high temperature wells. They are drilling well away from the hot spot area, which makes migration risk higher, but pressure and overcooking risks very much lower.
Its also interesting if you take GREEN in the above as FOGL's estimates of GAS, and YELLOW in the above as FOGL's estimates of OIL - well, look at Darwin, FOGL marked it as gas (gas condensate) long before the drill bit found gas (gas condensate).
Its going to be interesting to see if their expectation of GAS upper at Loligo and OIL lower is going to proven correct, would be lovely to a circa 10TCF to 12TCF recoverable gas find in the upper before the drill bit goes further down to check for any oil below.
Some info on FOGL in the latest RAB update.
http://www.rns-pdf.londonstockexchange.com/rns/2106K_-2012-8-16.pdf
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