HDR hardman resources limited

BANDA reserve estimates, page-2

  1. 672 Posts.

    You've hit the nail on the head. Ching-2 is just a sideshow, the critical well for this year is Banda. I'm almost hoping Ching-2 is a dud so I can pick up some warrants on the cheap & enjoy a potential huge windfall from Banda.

    You asked about the proper POS given modern techinques. The best guess for the POS is now 1 in 3. I have two sources:

    1. ROC CEO Doran says "One positive thing though is that the tools now available to the explorer in these deep water areas have greatly increased the chance of exploration success. The days of 1 in 10 success rates are probably long gone in many deep water basins the more common rate is now closer to 1 in 3. " (ROC ASX release 23/5).

    2. American Aassociation of Petroleum Engineers
    Deep water (>500m) is an immature frontier, with approximately 50 BBOE discovered, over half since 1995. Only about 20% of these resources are developed and <5% produced. Most reserves have been found in the Gulf of Mexico, Brazil, and West Africa. 90% are in turbidites, primarily Tertiary age. Conservative estimates for reserves remaining to be found in deep water are 100-150 BBOE. The global deep water success rate was about 10% up until 1985, but has since averaged approximately 30%, driven by remarkable success in the Gulf of Mexico and West Africa.

    So if we give a 33% POS for Banda with a middle of the road estimate of reserves, 775MB, it gives us a risked reserves value of 285MB. At $US2 per barrel in the ground, thats worth $A1.14b. HDR owns about 24.3% which is worth $A270m, or 0.67c per share. In reality a hit at Banda would upgrade all 55 unexplored leads(*) with 6 billion barrels potential reserves. The upside for HDR would be far greater than 0.67.

    Bring on Banda baby....

    (*) These 55 leads are in the 4 of 7 explored blocks. Once Dana finish their seismic studies in blocks 1,4 & 7 we will have more Bandas to puncture.
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