RE:RE:RE:RE:RE:Jarvie: A trap without a source rock is called a dry holedeepoil0808 wrote: The whole premise of this drilling program was based on the presumption of the existence of source rock that is marine source that migrated into oil traps in Nambia and Botswana with billions of barrels of oil in deposits and hence the stock is worth billions with a sky the limit view.
But this is not the case after drilling two holes.
Actual facts show that we only had shallow drilling (much lower than planned 12,500 depth) due to encountering faults in 2 drill holes therefore putting into question the depth of the basin itself and, whether the drilling equipment can drill any deeper safely. You cannot extract oil if you are unable to reach it.
Then you have the lack of a source rock even if it is not found. Jarvie stated that this is the key component. Without a source rock, you have nothing.
How does one justify a $1.4 billion market cap valuation based on these facts?
Hydrocarbons originate in source rock. Not in migratory pathways, not in traps. Therefore, if you have hydrocarbons, you have source rock, even if you didn't drill directly into it. In this case, it looks to me like a migratory pathway because of the low gas content. Gas quickly migrates through to the traps along with oil at a slower pace. Now we are doing seismics to locate the traps which we will then drill. All very straightforward.
On valuation, there was a chart floating around last year showing valuation per acre of $850 if hydrocarbon shows are present. Someone on this board or another calculated an area of influence of 220,000 acres around these two wells, both of which have HC shows. Do the math and the present valuation is a bargain.