RE:RE:RE:RE:RE:When is the peak expectedI mean the only thing I can think of with any degree of certainty is a third party model for the first subbasin. That is the only area that will have Aeromags, 2D Seismic, Multiple Core Samplings verified by 3rd party lab analysis, All kinds of other info from the wells.
They could extrapolate the CBOE for the basin I suppose but I don't think anyone is going to pay for that extrapolation and I don't think Recon wants to sell themselves short.
There are various pricing models for that. However, I believe the existing basin will command a premium in a JV or Farmout. I also expect to see no Fewer than 10-20 of these similar sales, JV's with other companies. Not saying there will be 12-20 Partners but there are going to be a lot more than one. There is likely enough oil here for everyone.
My Personal Opinion is that the Basin will improve as it moves towards Botswana. I think their biggest gamble was they are auctioning off the Sirloin first and it's apparently Prime Rib.
How many different Companies have produced oil in the Texas Permian? Probably quite a few.
In addition and I think this is extremely important and shouldn't be underestimated we have a lot of Oil guys in this company chomping at the bit. So I completely expect RECON to go into production for themselves and scale up to a pretty nice level.
Here is my wet finger in the air prediction for the basin.
12 Billion Comercially Available BOE.
If that is correct the basin could probably produce 3,000,000 BOE for the next 10-15 years. However, that is a more aggressive than anyone could scale and that would have a pretty large affect on Global Oil. I mean you'd be looking at Billions and Billions of investment dollars. That from the Geology appear to be completely warranted however If I'm a buyer or JV I want to see data from each area.
What I'm saying is that I expect Recon to develop this in a number of ways.
I prefer to look at this basin as scaling up to 1million BOE Per Day. If the Basin eventually produces 1 million BOE per day then it takes 33 Years to deplete the Conventional Resource a time frame and amount of Oil that I'm very comfortable unless of course and this is a big, big if this thing does contain 120 Billion of Conventionally Accessible BOE Hydrocarbons. In which case Nambibia just became the fulcrom point and arguably the most important resource on earth when you factor in Geopolitical Issues and Concerns. At 120 Billion BOE Commercial. Nambibia could produce 3 million BOE per day for the next 120 Years.
Feel free to play with the math and all of those scenarios. I believe Jarvie was laughing for a reason and I also believe there is a reason why he hasn't provided any Color to his "Conservative Forecasted predictions"
So again I'm going to say how do we model the financial impacts to RECAF? I have no idea, and when will the pop be??? Who knows. I will say this I am in love with this basin. I fully welcome, expect one more share dillution for Billions in Capital. I also firmly expect for Recon to start drilling sooner rather than later.
Their Aeromag combined with the Geology seems to have produced results that are quite a bit better than expected and I have no reason to believe they won't drill some wells for themselves in strategic areas prior to even doing 2D Seismic... They are going to need more rigs for sure. I don't think people yet understand that we are literally scratching the surface.
Also if I got the math wrong I'm sorry. Please remember these are my projections without any kind of Geology, no inside information but I do have some idea of the costs expected for what Recon has outlined in their investor prospectus.
When you control a basin it allows for an unprecedented level of flexibility in terms of future operations. I cannot even begin to imagine how to model this company in terms of value except at the 12 Billion Commercial BOE Model. However, again even in that Model who can say how much RECON will be able to wisely yet aggressively produce for themselves.
When they stuck with Recon Nambibia already chose the West. Unless the price is wrong...