CGX / FRONTERA UPDATE Fairly surprised of today's price action (along with volume) given the news release yesterday.
Looks like final valuation of Kawa is still underway as the venture partner was not able to obtain MDT / side wall core samples.
For those that are downplaying Kawa due to the venture partner not performing a flow test - that was the plan from the beginning. Very rarely, I can't think of a single instance, where an operator drills a subsea exploration well then immediately performs a DST.
The note regarding the Santonian having hydrocarbon liquids is directionally positive - still need to ascertain reservoir and liquid quality. It also appears to alleviate concerns that Kawa was mostly gas as several publications have speculated (upstream online).
The Santonian data (or deeper strata), in my opinion, is most important data point for Kawa given what we know of the basin and the prospect itself. More specifically:
- Santonian is closest to the Canje source,
- its liquid prone (high quality oil) based on analogue offsets Maka Central and Kwaskwasi,
- structures are large (as shown on 3D seismic)
For Kawa-1, the campanian was never expected to amount to a stand-alone development resource. Recall, the seismic amplitude on the campanian was around 2,500 acres only. The fact we did encounter unexpected reservoirs in the Maastrichtian and upper campanian is positive - however, should be taken with a grain of salt.
Perhaps what we uncovered in the campanian at Kawa has stronger implications for Wei. Note, Wei's seismic cross section does indicate two large campanian prospects.
What data points am I most interested in at Kawa? I think the fluid analysis has been highlighted already .
Equally as important, in my opinion, is the updated seismic interpretation of Kawa. Jennifer Budlong did mentioned they would be running VSPs as part of evaluation program. I would be interested to understand what we learned from those VSPs that may be different (or new) relative to our original 3D seismic interpretation. In particular, I am interested to hear more about the conician and what was uncovered there.
On share priceand volatility, I suspect BGP Prospector could be in the background somewhere here (a subsidiary of CNPC).
I can imagine why CNPC would want to lower the price of CGX ; )
Yes, OIL_RUN still holds all his chairs. With Brent
above $110 and every E&P operator looking to stop further investments in Russia - one must ask where they are going to allocate capital.
Any thoughts?