Good (inferred) news: no shallow gas on Kawa-1Good morning gents,
I have been off the grid for a while and reading many valuable comments now, thanks to everyone having contributed. I do not understand most of the share price valuation subjects but it makes good reading for me; in a separate post I am going to give my (very primitive) point of view on the subject.
In the meantime, believing that everybody should open their mouth mostly on subjects that they really know about, I would like to state the following: I think we have all good reason to believe/infer that Kawa-1 does not have shallow gas, which is a good thing, i.e. a major problem and potential cause of "infant mortality" of the well did not happen here, good news for all.
To explain my logic; as a first principle I take it for a given that any major event on this well, despite all the precautions about the well bebing a tight hole etc, will leak in a way or another and the effect will be reflected on the share price, whether GCX/Frontera/The Pope like it or not. You have some 120-140 guys on board, at least 30-50 of them do understand sufficiently what happens on the well (furthemore if you have a shallow gas event they will all observe that something is more than dodgy...) and they all have families with whom they whatsapp. So, here is my first principle for the rest of the well and again, it is a time-tested principle: major events on an exploration well shall be reflected near-instantly on the SP; they may not be reflected very accurately, there is all the set of emotions in play but they will be reflected somehow.
Based on that, my technical basis for the current statement is that when I check the AFE's and time/depth curves of the standalone subsea exploration wells that I drilled in my life, I see that 10 days after spud you will have the conductor (presumably a 36" here) and the surface casing (presumably a 20") in place. Maybe you have drilled a pilot hole at the very beginning, which doesn't change my conclusion becasue the pilot hole serves the exact purpose of checking for shallow gas and gives you the information even before having to set the surface casing.
So, given that we do not see anything else than the usual "noise" on the share price going up modestly in the last days, my professional judgment at this point is that the well is going as per plan, with a potential initial hurdle (that Dirk had mentioned at some point) having not materialized. I will not speculate here if this should be reflected in the SP etc but in my eyes, the asset in which I invested heavily has just shed some more of its inherent risks, which makes me sleep better.
GLTA,