HDR hardman resources limited

BANDA reserve estimates

  1. 1,200 Posts.

    Of this years drilling schedule Banda should provide the most interest (I am counting a hit on Chinguetti-4-2 as a Given.. mmm) due to its massive upside potential. According to Fusion an Independent study on Banda concluded that the possible volume of oil-in-place (prior to discovery) is in the Banda prospect is in the range (P90-P50-P10) 535-775-990MB. Let’s put into context what that exactly means;
    The (P90-P50-P10) reserve values relate to a discrete probability distribution function, which respectively assigns probabilities of 75%-50%-25% i.e.
    75% chance - 535MB (Low reserves)
    50% chance - 775MB (Medium Reserves)
    25% chance - 990MB (High reserves)

    But these values don't take into account the probability of there being oil there in the first place which is otherwise known as the POS "Probability of Success." So having said all that it all comes down to what POS you want to assign to the Banda prospect since this will proportionately reduce the assigned probabilities of a given reserve estimate otherwise known as RISKED reserves. It wouldn’t be any fun if there were no Risks would it now?

    So far the drilling success of Mauritania drilling is 1 out of 2 wells being successful i.e. POS of 50%. But intuitaly I would think this is very optimistic and it may be more prudent to use a historical POS from fields across the world and from proven oil-producing geology. Better still it would be even better to use historical POS for a field which has been developed using Modern day 3D seismic technology. Most observers would agree that the 3D seismic technology has radically improved the POS although after doing some initial reading I haven’t yet found a source which helps quantify what this change may be. There in I think the problem lays, exactly how does having modern 3D seismic technology change the POS for proven oil producing grounds? I have little knowledge on this point but would observe recent developments with interest. In particular look at TAP’s POS when drilling into Flag sandstone… I haven’t done the excersise but know it is very high and possibly over 90%.

    I have calculated the RISKED reserve probabilities for 2 scenario’s of POS depending on whether your very bullish or very bearish, from hear its easy to calculate your own lunatic fringe position LOL
    POS of 90% i.e. Very Bullish (POF of 20%)
    75% of 90% POS = 68% probability of 535MB (Low reserves)
    50% of 90% POS = 45% probability of 775MB (Medium Reserves)
    25% of 90% POS = 23% probability of 990MB (High reserves)

    POS of 10% i.e. Very Bearish
    75% of 10% POS = 7.5% probability of 535MB (Low reserves)
    50% of 10% POS = 5% probability of 775MB (Medium Reserves)
    25% of 10% POS = 2.5% probability of 990MB (High reserves)

    Where does all that leave you? You’re either an Optimist, a Pessimist or something in-between which is exactly the place the market drops you off each and every time YOU decide.

    NB.. Feel welcome to pick the eyes out of my work-in-progress,

    Regards


 
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