I'm Back- My ThoughtsI know, I lied... my previous post was not my last... With this, I do appreciate what I have read over the past week. I think we all want the same thing and unfortunately it has not been easy, hence the war of words.
Anyway, given the new information that has come out in the past week, I felt a post would be beneficial (if for nothing else, my own benefit to summarize my thoughts... enjoy).
1) New website looks great. I like it a lot!
- My gut feeling is they put a new website out not for our benefit. Rather for investors of the future JV partner who wants to know what they getting in return for buying into Guyana.
- Government pressure could have also been applied to show CGX/Frontera is 'serious' about operating in Guyana.
2) Corentyne: Clearly, the seismic shows some great prospects. Using basic oil in place calculations and assumptions (based on literarture and offset discoveries), its fair to suggest Kawa could have between 400-750 million barrels of oil in place within a reservoir horizon. Using Suriname and Pluma/Haimara as a comparable, there could be up two horizons with 500 million barrels of oil (or condensate) each. Using a 20% recovery factor, that provides between 80-150 million barrels of recoverable oil for each horizon. Pretty fantastic.
- Many other targets as well (e.g., extension of Pluma). More so, many of the risks (oil migration, source) seem to be low at the moment for Corentyne. Big challenge now is getting the best targets drilled first.
3) Demerera: Prospect F looks really good. I am actually quite bullish on Demerera.
- Biggest risk, of course, is the quality of oil. CGX seems to believe an oil migration story from Stabroek Liza. If this is true, Prospect F could easily have over 1 billion barrels of oil in place (250-300 million barrels of recoverable oil).
4) Forward Strategy: Need to find money to drill wells (biggest suprise I know).
- CGX/Frontera have done the 'hard' technical work. They have the seismic and they know where the prospects occur. Doing more additional seismic upgrades on Demerera is worth the money, even if nothing will happen there for at least another 8 months. They just now need to find someone to join along and help fund wells.
- In my opinion, we need money for at least five wells minimum to start (probably all drilled in Corentyne given the oil quality risks of Demerera).
- Of the five wells: three initial exploration wells and two additional appraisal wells on the best prospect drilled within the original three wells. Least with three prspects drilled, a good chunk of Corentyne can be drilled and help rank the opportunity. The two additional apprasial wells would help define margins edges/de-risk any challenges identified (either structurally, stratigraphically, petrophysically, etc). Ideally these wells would be drilling in succession, so the costs could be reduced. With that, we are still looking at over $100 million USD needed at a minimum before we even discuss costs required for production wells and FPSO. I would love to see CGX/Frontera go at it alone but that's never going to happen. We need a big NOC/IOC to join along who has massive pockets and expertise at drilling wells.
In any event, the next couple months should be interesting. The opportunity is here is very exciting (even at $40 Brent). Hopefully CGX/Frontera can find that additional JV partner who will help drill for oil. Land like this needs wells drilled... almost crinimal (least from a subsurface/explorer perspective) not to see it moved forward sonner than later. But for the risk of adding a couple more shares at .45 cents, its a good one to make (even though 10yrs of doing this tells me otherwise).
Cheers.