Old Jarvie Conversation Excerpt James Stafford: Beyond using only 12% of Recon’s Kavango holdings, how conservative are you being?
Daniel Jarvie: I really can’t stress strongly enough how conservative I’ve been here. I like to be conservative with numbers. Most analyst and industry reports stress the total organic carbon content (TOC) of source rocks, but that’s only half the story for hydrocarbon formation. The other key component is hydrogen. Good source rocks have not only good TOC values (say 2-7%) but also high hydrogen content in the organic carbon.
For my numbers on Recon, I only used a hydrogen content of 358 (mg/g), which is very conservative based on the rock I’ve seen from the Owambo basin. In other words, on a scale of 1-10, I used “3” for hydrogen content, which is quite modest. For comparison, the Eagle Ford source rock would be a 6 and the Permian Wolfcamp a 5.
Thickness is the other key part, and as we don’t know the thickness yet, we are going by what we saw in other sections, but there is 6,000 feet of Permian section in there so that’s a very good start. I anticipate a thickness of between 300 and 400 ft of net petroleum generating source rock.
James Stafford: And if its 400 feet thick, you are estimating the potential at 120 billion barrels of total petroleum generated. And you think this is conservative?
Daniel Jarvie: I do. And it’s not even an unusual number for a basin this size, and this depth. The Eagle Ford and Permian Wolfcamp petroleum potentials are even higher using comparable thickness. They could be sitting on something absolutely huge.
If you apply those numbers to the entire basin they would be off the wall.
They would be laughable because they are so high.