Zagros comparison The WZG success at Sarqala ST is geat news for them and should have inspired some activity on the Chia block, which is a direct compaison to the Sarqala structure.
Focusing on some finer points of the WZG presentation, it is seen that the P50 reserve size at Sarqala ST is 66 million barrels (slide 19). This is almost same size as attributed to Chia in second appraisal by Degolyer. Previously stated, on its own this is a small pool for international ops and probably only generates marginal economics. It is seen that Talisman did not participate in this well, or the Mil Qasm well as they declined participation on the Garmain block in favor of the larger reserve potential of the Kurdamir area (slide 13). Rumor is that they thought the potential too small. Great cash flow numbers were reported on another post for the initial production, but remember that after costs are recovered, WZG gets only a 16% share (slide 16).
Fortunatelt for WZG, they have numerous similar sized propsects on their block (slide 13) which will increase the profitability. LFD does not have a robust inventory of follow-up prospects if results at Chia are encouraging. Close examination of an older company presentation (now pulled from website) showing these leads indicated they were one-line seismic anomalies, so very risky.
It is also seen that WZG is led by experienced oilmen and they have managed their finances and have excess working capital to budgeted requirements, so no similarities for lfd here.
Those who suggest that lfd could get its act together and drill before the June deadline (presumably if Genel does not submit an appropriate bid) should refer to what WZG says about the Mil Qasm well. Spud Aug 29th 2011, 13 5/8 casing set on Oct 19th at 1615m and presumably still drilling to a target depth of 2400m. This is almost identical to Chia target depth and if experienced WZG drillers has been on well for 4 months already, how can inexperienced lfd, without spud date in sight accomplish this by mid June?
LFD should have been drilling last summer, in which case this might have been a rewarding and much different story. I think they have squandered away what should have been much interest in this block and are now faced with a take-it or leave-it situation with alternative being to see an opportunity expire next June. Of course this is not what company spokespeople will say to any callers who manage to penetrate the corporate offices. I am waiting to see what they say when the lynch mob arrives?