Hi Spec
I definitely think that any hiatus in exploration drilling should only be for one drilling season .Once we are producing 5000 bopd the clock is ticking for the Ungani field .
It will be depleting at about 1.7 million barrels per year .We have to find another field or fields to replace it or we would soon be out of the oil production business .
However at 5000 bopd at a low cost of production we will have the cash flow to aggressively explore .
You certainly have me using the term Wildcat . I did use it for affect but I think justifiably so . I wanted to emphasise the risk of exploration drilling .
After the discovery of Ungani there were a number of Ungani trend exploration wells that did not find commercial oil .
There have been around 300 exploration wells drilled in the basin and 5 " commercial " oil fields discovered but I doubt that any other than Ungani yielded much profit if any .
I understand that the technology for finding and delineating structures has greatly improved and the geological knowledge that Buru has accumulated lowers the risk .However the risk is still very high on most of the plays .
There are low risk exploration plays around the Ungani field both in the U dolomite and the Grant and Anderson , but the high priority structures distant from the Ungani field are high risk / high reward . To call them Wildcats or just high risk exploration wells is largely just semantics but it was perceptive of you to call me out . I personally don't like the term , but if they can call any wells on land in the overdrilled USA Wildcats then in the Canning the term is probably appropriate .
High risk but mammoth potential reward .
I think there is a lot of oil in the basin and that Buru will discover it .
I know that long term holders are impatient for more exploration drilling but I would think that the exploration team and management at Buru would be even more so .
However I think that a pause for one drilling season from high risk exploration drilling while they brought the Ungani field up to speed and developed Broome would actually speed up and greatly derisk their evolution into a successful oil and gas production business .
We wait with great anticipation for the U4 and 5 flow tests .I think that because of the improved completions compared to U1 and 2 that they could surprise to the upside and we will be able to produce at 3000 bopd but we wait and see .
To get to 5000 bopd they would have to at least bring Ufw into production and drill U6 and they could do that this current drilling season if they decide to fast track Broome . They might be able to fit in a low risk inexpensive Anderson and Grant appraisal up dip from Ufw .
They would then have the production capacity ready when the Broome facility was finished .
As far as the SP goes I think that while there may be some initial disappointment in no farm out and no "high impact " exploration drilling this season the market would see the growing production and digest the financial implications of 5000 bopd through Broome and there would be a steady growth in the SP over the year as long as the POO behaved itself .Spec you would also see the field reserve nos go up greatly over the year especially if U6 was drilled and Ufw brought into production .
gltah
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