HDR hardman resources limited

gas inference in goc presentation

  1. 335 Posts.
    I was interested to read the following post from Kahuna at SS:

    ""Interesting news !!!

    I suspect more than a few have missed this one.
    From HDR's presentation to the good oil conference which was released late last night.

    Small stuff ...
    A decision of Development of TIOF field likely Q4 2005 .....
    Uganda drilling of a hole late 2005 early 2006.
    This wasn't the real news.

    For a while I have been following HDR and WPL and trying to work out a decent reason for WPL'S reluctance ever to give a decent realistic estimate of the actual size of a field whether it be in Mauritania or Australia. This aside .... HDR seems again to have let the cat out of the bag.

    HDR DOUBLE SIZE OF BANDA GAS DISCOVERY ESTIMATE !!!

    For some unknown reason the market seems to ignore the GAS in the Mauritanian field despite my own view it will probably top the size of the oil deposits they find.
    Anyhow ... Specifically up until yesterday WPL was only willing to admit according to its own reserves Feb. 2005 statement of a possible gas deposit of roughly 1.2 trillion cubic feet in total at Banda. Also its comments regarding the gas was it was not large enough to develop alone.

    It gives me great pleasure to make the announcement WPL failed to make regarding Banda.

    During May 2005 a development well was drilled at Banda called Banda-2 for disposal of the gas leg of the Chinguettie field. The well was also flow tested at the same time with very encouraging results. Due to this further testing the estimated size of the Banda gas discovery has been upgraded from 1.2 trillion cubic feet to a total of 2.4 trillion cubic feet. Please refer to page 9 of the HDR presentation to the good oil conference where this is clearly elaborated.

    Now what does this mean. Well another 1.2 trillion cubic feet has been added to the already massive pile of gas in Mauritania. Converted to oil its another 200 million barrels of oil equiv.

    More importantly it tips the scale well over the top to make the gas deposits in Mauritania COMMERCIAL ... Not that they weren't in the first place. Obviously development is years away but then again with BG as a partner and their record for developing a LNG field it may be sooner than we think.

    Ignore Pelican ... Its in block 7 and possibly could be the largest single gas deposit with a drilling result of 370 meters Gross intersected when they drilled, we don't have enough data to work out its size.

    Looking just at the Gas legs which the market currently has valued at zero for Chinguetti, Tevet, Tiof and Banda. Chinguetti according to WPL has no gas !!! That's why they are going to pump the estimated 500 billion cubic feet from the Chingeutti fields oil development back down into Banda. Tevet we know from the drill had a 70m gross Gas leg. Tiof we know has also a lot of gas both from the drill results of the numerous holes and the flow test with the gas results from that.

    Conservative call ... Adding the new data about Banda which WPL failed as per usual to release ... Well Banda 2.4 trill Ching gas 0.5 trill Tevet 0.8 est and Tiof 1.1 trill est .... Well I come up with a grand total of 4.8 trillion cubic feet of gas and this is being very conservative. Looking at the Tiof drills on numerous maps we see the far fringes being described as gas legs for the tiof field. It could very well turn out Tiof contains a hell of a lot more ....... Anyhow conservative estimates take the total in the same area of drilling over 4.8 trillion cubic feet of gas and very much likely over the 6 trillion level and that's just from these four fields let alone if they discover something else . Just to put this back into barrels of oil equiv. its 800 million to 1 billion barrels of oil equivalent. HDR share which I suspect the market has priced at near zero is in the region of 160 to 200 million BOE equiv.

    With this announcement by HDR it makes the gas legs certainly viable. Market as yet has not cottoned on to this and waiting for WPL to confirm this if they keep up their usual ultra conservative style ... Well it could be months if not much longer. At this stage drilling and development seems focussed on the oil but if you are any good at math's ... The GAS deposits they seem to have found here not counting Pelican which could be massive going on the 370 gross gas column ..... The gas deposits now seem to be larger at this stage than all the oil they have found to date. Drilling this year and early next year are solely focussed on oil targets .... This Gas news is just something which will underpin the whole Mauritanian exposure.

    No longer is it a question as to if they are large enough to develop, the total has now passed the line in the sand even WPL was trying to hide behind. At some stage we will see probably a LNG refinery tying all the fields together.

    My congratulations to WPL on you excellent announcement regarding Banda or are you again going to try and make HDR retract something we all now know to be fact"
 
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