Now, lets talk about those reserves for a second.
Some skeptics have stated that the use of the word "potential" in describing the 1.1 billion barrels means, in oil business lingo, that, until further tests are made, there is a possibility that only 10% of those reserves will actually be oil....had they used the word "probable" to describe the size of the reserves, the likelihood of there being oil increases to 50%. Some have said that, given that 10% figure, the company is engaging is misleading the public. Well. I did some number crunching today and I must say that I disagree with those skeptics using their own worst-case scenario as my model.
Well let's just take a look at the Jul 10 PR release.
Thursday July 10 2:22 PM EDT
Company Press Release
Revised Estimates Of Potential Recoverable Reserves In Kazakstan Exceeds One Billion Barrels
NEW YORK--(BUSINESS WIRE)--July 10, 1997--American International Petroleum Corp. (NASDAQ:NMS - news) announced today that it has received revised reserve estimates for its license in Kazakstan.
The License Area is located in western Kazakstan about 125 miles Southeast of Chevron's multi-billion barrel Tengiz Oil field and the Caspian Sea. The Area is bordered to the South by Elf Aquitaines' License, and to the West by both Oryx/Exxon License and AMOCO License.
Revised preliminary evaluation by the company's independent petroleum engineering consulting firm indicates that potential recoverable reserves from 7 structures, located in the western half of the License, could be as much as 1.1 billion barrels from Jurassic Age sandstones. Nine additional structures have been identified in the License Area, but have not yet been evaluated. The revision of potential reserve estimates was due to the receipt of additional seismic data from the Kazakstan Government and the evaluation of an additional structure.
Jurassic Sandstone is a good zone for both oil and gas, but then you knew that already. What does it say in that paragraph potential reserves estimates. Now I wonder what that means??? But the best is yet to come for those that read....
Regional seismic on the eastern half of the License Area indicates additional structures, the largest of which measures about 50 Kms in length. The Kazakstan Government drilled one well in this structure to the top of the feature, which blew out with gas and condensate such that no additional evaluation was possible from the well. The company believes that this structure, whose potential reserves are not yet estimated, could provide the largest potential deposit in the License Area.
Quess what condensate is? Liquidfied natgas. Quess how they grade it? By gravity. Note that the K-stan government drill this. Note how all this is determine by the siesmic evaluation, which means the only well drilled was by the government and it yield nat gas and condensate. Now the question begs to be asked, is there logs of this well? Was AIPN or any other company present for this operation? I don't think so.
Now condensate is great if it is in large quanity. It can be refine jsut like crude oil. Mobil's Indoensia fields are huge condensate's fields and it one of their pride and joys.
The company is continuing its evaluation of the area and will expand its evaluation program with the release of additional data from the government.
Read that as siesmic intereptation so they can determine were to drill.
The Area is conducive to providing various sales options for any commercial oil or gas development from the License site since there are several oil and gas pipelines which cross the Area. The existing infrastructure permits rapid development of any commercial production and more importantly provide flexibility in securing acceptable sales markets. Production can be sold North to Russia, Finland and the Atyrau Refinery, and/or South through the Caspian Sea port at Aktau for export abroad.
There is that word again, gas.
The company expects full government approval of the transfer of the license to MSUP Ltd. which is 70% owned by the Company next week.
American International Petroleum Corp. is engaged in oil and natural gas exploration in Kazakstan and refining in Louisiana.
------------------------------------------------------------------------
Contact:
Wall Street Associates/Millennium Holdings Group Inc.
Investor Relations: 561/988-2334
------------------------------------------------------------------------
More news for referenced ticker symbols: AIPN, NMS, and related industries: oil/energy.
Now that you shot your load, I been around this industry for 17 years. How many have you spent in it? K-stan is a prolific region and Western companies are tripping all over themselves to do something there. Hilter target this region in his master plan during WW2 and no one question that. However, estimates are estimates. The final proof is drilling the well and doing expensive and sophisticated test to determine what is recoverable. Recoverable is the operative word. Not all oil comes out. Ask any that work in the industry. This stock burned me once with there Colombia play. I'll not be to excite about it this time, until they drill a well and give the results.
Chevron is locked up in Tengiz, which is a $20 billion investment. I look for OXY, RD going into partners if any do and only after their geologist look over that data very carefully and with alot of discussion. That doesn't happen in two days. |
