Downgrade on Kenya Reserves- far from it !by courtesy of Seeking Alpha who allow 400 words from their transcript.
From Tullow's Conference call.
Mc Dade stated the following : Conclusion from all that work is that we're pleased with the 560 million 2C number, so that's - we've discovered resources of 560 million barrels with a huge upside potential. 670 million barrels of upside potential beyond that 560 million. So this very much underpins our previous view of the prospectivity of the basin for those that want to kind of try and compare the guidance that we've been giving through the exploration phase of 750 million.
750 million was a Pmean number. It was a number we gave when there was a great deal of uncertainty. And generally, for those of you who want to do the math, Pmean generally sits somewhere between 2C and 3C. Great outcome for the resource base, massive amount of oil in place, up to 4 billion barrels in the basin. And we just feel this completely underpins the development, which I'll now go on and talk about. I think on the resources for Kenya, we can only talk about our view of your resources, not our partners who've talked about view of resources. Our view of resources historically has been, and we specifically said, we've got exploration uncertainty, we've got appraisal uncertainty. We're going to go and state it as a Pmean. We didn't come out and see a 1C, a 2C. We said let's kind of try and describe loosely what we have and we said a Pmean of 750 million. Now that we've got the data and we can, we feel, describe it more specifically, we actually feel that the description of 240 million, 560 million, 1,200 million is relatively consistent with our view of a Pmean before of 750 million. So for us, this is not a downgrade, far from it. We think in our overall resource base, the upper end is higher, the kind of midpoint is probably at similar levels.
Uganda, we stopped drilling and we were at about 900 million barrels of 2C. And we may have drilled 1 or 2 additional wells, but not many, and we found that the 2C moves up to 1.7 billion.
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As mentioned in my previous post the Conference Call is well worth a listen or go to seeking alpha and read the whole thing. I like the way they intend to develop this project and do add ons as they go. Quicker time to cash flow. They are looking at Oil by 2020. Total would not have bought into Kenya unless they felt they have something big.
So this 25 % stake of AOI will be worth a lot of money over the years.