Longford Energy Inc V.LFD

Zagros comparison

[HHdoc]

The WZG success at Sarqala ST is geat news for them and should have inspired some activity on the Chia block, which is a direct compaison to the Sarqala structure.

 

Focusing on some finer points of the WZG presentation, it is seen that the P50 reserve size at Sarqala ST is 66 million barrels (slide 19). This is almost same size as attributed to Chia in second appraisal by Degolyer. Previously stated, on its own this is a small pool for international ops and probably only generates marginal economics. It is seen that Talisman did not participate in this well, or the Mil Qasm well as they declined participation on the Garmain block in favor of the larger reserve potential of the Kurdamir area (slide 13). Rumor is that they thought the potential too small. Great cash flow numbers were reported on another post for the initial production, but remember that after costs are recovered, WZG gets only a 16% share (slide 16).

Fortunatelt for WZG, they have numerous similar sized propsects on their block (slide 13) which will increase the profitability. LFD does not have a robust inventory of follow-up prospects if results at Chia are encouraging. Close examination of an older company presentation (now pulled from website) showing these leads indicated they were one-line seismic anomalies, so very risky.

It is also seen that WZG is led by experienced oilmen and they have managed their finances and have excess working capital to budgeted requirements, so no similarities for lfd here.

Those who suggest that lfd could get its act together and drill before the June deadline (presumably if Genel does not submit an appropriate bid) should refer to what WZG says about the Mil Qasm well. Spud Aug 29th 2011, 13 5/8 casing set on Oct 19th at 1615m and presumably still drilling to a target depth of 2400m. This is almost identical to Chia target depth and if experienced WZG drillers has been on well for 4 months already, how can inexperienced lfd, without spud date in sight accomplish this by mid June?

LFD should have been drilling last summer, in which case this might have been a rewarding and much different story. I think they have squandered away what should have been much interest in this block and are now faced with a take-it or leave-it situation with alternative being to see an opportunity expire next June. Of course this is not what company spokespeople will say to any callers who manage to penetrate the corporate offices. I am waiting to see what they say when the lynch mob arrives?

[EOIM]

Their partners GENEL and KRG & Petoil are also annoyed with the delay & lack of cash to drill and will likely be putting pressure on LFD as well to take it or leave it. If they  refused to take the offer, they would have to prove to their partners how they would raise more than $20 to $30 million to drill in Q2. The good thing though is that LFD seems to have

[stoktik]

Well does not have to be completed by June , one of the questions I asked Said when I talked to him was just that , as long as the program has a start it's good to go ,all that stuff is a guideline any way ,if you have questions about what's going on look through the last posts and get the number off it and call the guy instead of driving your selves nuts listening to the cr#p that some of

[good40]

Something odd about an apparent well that tested 4800 bopd over 75 years ago... and left without appraisal,  unless of course the production quickly declined to non-commercial rates,  as was shown by some of the other 8 wells drilled on the block.  In fact,  I can't imagine such slow development here... if partners actually thought that there was a producing well just

[Baxter4]

Goofy already knows why the well was not put on production back in the 1930's, but for the benefit of others who do not know why (you are his target BTW), the price of oil in 1936 in 2011 dollars was $17/bbl. Saudi Arabia was starting production with wells producing in excess of 10,000 bbl/d and seaways for export nearby to their fields. At the same time the USA was able to supply a large

[HHdoc]

Stoktik; Read the psc for yourself on sedar. I clearly states that 2 wells have to be drilled before the end of the first exploration period on June 12th 2012. With due respect, Neil said is not an oilman, and was recently parachuted into his present position. Company tends to make ambiguous statements which at best are misleading.  

[HHdoc]

"all that stuff is a guideline any way" Unless stoktik has paraphrased liberally, I suggest we are in deep trouble if a senior (?) company spokesman considers a psc contract as just a guideline? I am certain the kurds will disagree with this interpretation!

[HHdoc]

Good40 I agree with your concernsabout htis well and the rate reported by lfd. I "suspect" that the quoted 4800 or 5000 bopd was not a stabilized rate or at least that the test period was so short that a stabilized rate could not be established. I am confident that the oldest wells were completed at initial rates near 200 bopd and quickly declined and that Well 7 , with the 5000

[good40]

Yes HHdoc,  it certainly raises an eyebrow if two wells drilled following the CS7 well... did not substantiate the need to further appraise for 75 years. It only makes sense,  if the information we don't know,  is disappointing.

[EOIM]

I agree with HHDOC that the closest comparison is WZR Sarqala and not MIRAN. Historical data from World Petroleum Congress in the 1950s indicates that the reservoir pressure encountered at Well 7 was so high and up to 2750 psi. In that report, they mentioned that the accummulations that were encountered in the lower FARS formation drilled in shalow wells 1 to 6 were as a result of leak migration

[good40]

Yes sure EOIM... it is quite obvious that residents there are so well off that they would just leave 5k bopd because other areas have higher production rates.   I'm going to lean towards this,  it was left for 75 years because the information that is missing,  is disappointing.  That would be the most reasonable assumption.