As for AEN passing up this deal, you are assumRE:As for AEN passing up this deal, you are assuming that it was offered to them as well. We don’t know who it was offered to and under what arrangements. AEN has stated in the past that they are looking for other UK acquisitions after they acquired 75% WI in Fyne and Dandy so they are probably working on some other deals of their own at the present time. They can’t look at every possible deal out there as none of these smaller plays have the manpower to do so. Also AEN might just be wanting to do some deals nearer to their core areas in the UK, while IAE management doesn’t have that same philosophy. Who knows?
As for the N. Sea maps, I hope the following link works. If has all the UK fields and infrastructure mapped on it.
https://www.og.berr.gov.uk/information/bb_updates/maps/infrast.pdf
IAE’s Beatrice infrastructure is located in Block 11/30a, which is way NW of the newly acquired Block 30/6.
The closest infrastructure to the newly acquired block is the ConocoPhilips Judy/Joanne platform in the adjacent 30/7a block. A tie in to this platform would be cheap due to its very close proximity to IAE’s new assets. Stella and Harrier Shallow are about 15 km and 10km away from the Judy/Joanne platform.
The following link is a picture of the platform.
https://www.oilrig-photos.com/picture/number118.asp
This platform has capacity for 95,000 barrels/day of liquids and another 450 mmcf/d of gas. As of Jan 2008 it was processing condensate and gas from the Judy, Joanne and Jade fields at a total rate of 25,850 bod + 313 mmcf/d. So that would imply spare capacity of 69,150 b/d of liquids and 137 mmcf/d of gas.
As for how the small caps have been acting, it goes across the board. Only the large caps with production and free CF are participating in the run up of all commodity prices. The small caps of all resource plays have been left behind. Until IAE gets into the 10-20k/d range on production don’t expect much out of the market. Same goes for AEN or any other smaller player.
If you owned OIL from the beginning you would have seen the same BS trading until about 1 year ago, when production ramped up from their first field. The smaller plays are trading vehicles until CF from production says otherwise. OIL is now acting like a producer. IAE and AEN are not b/c their CF from production is very small at this point that it doesn’t make an impact on their earnings yet. At 10-20k/d+ that all changes.
It’s like I said before. IAE is acting just like OIL did before its production came online. For those that had to watch it, it was frustrating. But in the end it was well worth it.
Add in the perception that the credit-crunch will make it harder to raise capital and all small caps are in the toilet. Just look at the Venture exchange over the last 3 months. It’s been a dog compared to the TSX and it has a much higher waiting of resource stocks than the TSX. But the TSX has all the big caps listed there and that’s why it has way out-performed the Venture, even though it has less % exposure to the commodity sectors that the Venture does.
As for wildcats, it is what it is. You are going to have to drill 10 different prospects to find 1-2 new fields. Those are the odds for every company out there. IAE is not immune from these odds. OIL has pretty much missed on all their wildcats other than Huntington.
Morro, Palomino, Halibut, Muness, Disraeli, Sheryl, original Sheryl (Brenda West) & Nicol satellite prospect were all duds. Meanwhile the Brenda, Nicol, Kildare, Shelley, Black Horse, Bugle and Ptarmigan fields all already had at least 1 discovery well that was logged and tested prior to OIL appraising those fields.
That’s why the 1st lot didn’t work while the second lot did. The appraisal plays were already proved to contain oil, it was just a matter of how much oil had to be answered, while the wildcat plays were unproved from the beginning. They had no wells and no data to back them up. That’s why they historically have a 1-10 shot of working out while appraisal wells are usually 60% and up. This is why I am happy that IAE is trying to load up on appraisal and development plays. The new acquisition gives them 1 future appraisal/development play in Stella and a potential 2nd appraisal/development play in Harrier Shallow that are both near infrastructure with lots of spare capacity.