Post by
oldcompanyman on Jun 15, 2023 8:45pm
Feet, commerciality and so on
Folks,
The reason for more and more (not all) NRs in oil exploration are stated in feet is simply that our societes have become more and more litigious, so these people try to put out the most "unassailable", cast-iron data possible, which, by definition is never as bullish as the reality.
A reservoir is (a lot of times but not always) shaped a bit like a dome and the volume of oil that you can find in it is, well, in the simplest terms a percentage of the dome's volume, due to porosity. Fact is, your dome does not have a perfect geometrical shape, your estimation or even measure of porosity is not always that precise etc but the most tangible, non-debatablee thing you can present to anyone is the feet of HC-bearing reservoir that you see in the well with wireline.
Based on the dome analogy, it must be also very clear that 200ft of pay in a dome of "small" diameter are not comparable to 200ft of pay in a dome of much larger diameter. So, in short, feet are not meaningful, the volume of the structure and its porosity (among other things) are meaningful but nobody can dispute feet that have been logged, whereas all the rest is subject to some uncertainty and therefore it is being more and more scrutinized and debated and judged if put in an NR. Don't judge the messenger, judge the society...
Based on this discussion of the feet / pay thickness story, if you look at the image of the block, you can actually see that the Campanian pay thickness that they proved is, despite being a "secondary target", much more valuable (per foot proven) than the Santonian (per foot proven) because of its extension. 10ft of Campanian pay proven in Wei may well hold the equivalent of say 30-40ft of pay proven in the Santonian, based on the highlighted targets in the central part of the block.
"Commercial" is another subject, there are precise SEC rules about what constitutes a commercial discovery and you cannot override these as you please. IMHO we are commercial and it will be confirmed when there will be a buyout / farmin, they cannot put it in the NR.
The significant point is the shape and stacking of the Santonian targets... On the seismic, as opposed to Kawa, the Santonian targets on Wei do look very much like thick payzones rather than stringers, which was also to be expected given that on Wei they are drilling smack dab in the middle of the "dome", whereas Kawa gave them a lot, lot of information (actually more than Wei, it seems) on different horizons extending in different directions (but which, for a very first wildcat, was a questionable choice as a location; that much info becomes valuable once you have proven Wei commercial and in hindsight Wei should have been drilled first).
Looking at the seismic images of Exxon's discoveries and the shape / size of our Santonian targets, gut feelingwise any pay height of 120-150ft in the Santonian should hold, depending on porosity and a number of other parameters, a minimum of 350 MMbbls in place, which will, in these moderate waterdepths and existing nearby infrastructure/major operators, make the block commercial.
So, in short, feet are not something to be that concentrated on but give an indication of commerciality in conjunction with the seismic + the other factors mentioned. These Santonian targets are chunkier and much better placed than on Kawa; therefore I would expect them to deliver commercial reserves based even on these "modest" numbers I have stated above.
And, sorry, I will post again my wireline message above as it got buried, just in case.
GLTA,
OCM