1. There is definitly oil in this concession. Chevron is in the same neighborhood as are other companies. Whether there exists 1.1 billion barrels worth is a legitimate subject of debate. Personally, I am not overly concerned with the number. If AIPN can get $3/barrel out of the deal (about 15%), I'd be just as happy with 500 million barrels. Even if they are forced to give away the store and only get to retain 1% of 1.1 billion barrels that would still put the stock much higher than it is today. It seems to me that, any way you cut it, AIPN is in a win-win situation. The only question is how big will the "win" be?....and that's not counting results from the rest of the concession.
Really, there maybe 250000 barrels and tons...billions of tons of source rock...have they drill a well yet? Siesmic interpretation suggest that there are identfiable stucture that could contain a resivoir. Do you know how siesmic is acquired? There is absolutely no known method in the patch that will tell what is in the ground, other than drilling a well. That billion could be less or could be more. Now another fact that is escaping rationale thinking here, of that 1 billion that no one above ground knows to be fact, how much is recoverable? Let suppose that there is 1 bllion, is this a tight formation that has limited porosity? Let's say they drill it, what is the flow rate of this billion barrel find? 500 boe/day or 20,000 boe/day. Now I know some smart momentum player is going 'What is boe qdog?'. That is barrel of oil equivalent. Because no well is drilled we don't know if it is nat gas, oil or best of all condensate, now do we?
Now you mention others, the big boys. This is a region of the world that has been a large basin that folks have known for years to be prolific. Hitler made a push to take this region because of the oil. That means there is plenty of siesmic already done. Don't you think that the big boys already took a look at that information before bidding on the concession. But if you don't want to except that answer, a well has been drilled here and "blewout". What did it blow out, nat gas and condensate! Oil? Just because Tengiz is 125 miles away, doesn't mean there is oil. I live in Texasa and we don't have every where, trust me. The Middle East doesn't have it everyway. They ahave sunk PLENTY of holes to prove that.
2. The 1.1 billion barrel estimate was made by Huddleston which I understand to be a respected oil surveyer with a reputation for being very conservative. Can any of the oil people on this thread give us a solid read on Huddleston's reputation and track record? I was told that Huddleston usually plays it safe by only reporting 15% of their actual estimates. Is this true? If so, I think that fact would be a strong positive
In all wildcat ops. geologist will interept data and identify high probablity sites. YOU STILL HAVE TO PUNCH THE HOLE. Look OXY became a big oil company, because they tookover a concession form Mobil Oil in Libya. Now Mobil is a respected company that hs had it share of major finds. Where di Oxy's geologist sink the well, right near Mobil's base camp, when a couple of hundred feet deeper and found a 70,000 barrel/day well. Instant rich guys. Mobil hands that worked Libya back then still won't say the name Occidental. They still harbor illwill towards their geologist for missing that one. It's a science of probability, but far from being accurate. I've been around some big discoveries that took 16 wells before the first one hit. I've been on projects that the first well comes in. YOU JUST DON'T KNOW.
caveat emptor. |
