Tomas wrote this on the Dibb site and I had some time over to translate.
Full credit is due Tomas for attending the meeting and making notes in his usually correct way.
Thursday 4 June
Greywolf note:These are notes taken by Tomas at Dibben at the meeting in Stockholm on 4/6/98, the translation is done by Greywolf.
The meeting was attended by Alex Schneiter, Chief Geologist and Ashley Heppenstall, Head of Finance.
The latest find in Libya is the second largest since 1988, Lasmo has the honour of fielding the largest ie Elephant. The drilling season for RSO begins in the middle of July
with an exploratory well this is congruent to further testing by another rigg of the J1-85-well. Schneiter is pretty sure J1-85 contains oil. The test drill will take around 20
days to complete, with a result expected in the middle of August. Costing for the drill is $2miljon. With the low cost of setting the well into production taken into account
even a small find would be of interest, the company hopes to find 65miljon barrels.
The first exploration well which is to be started in the middle of July is expected to take 30 day's to reach max depth, after which a 40 day test period will follow. 4 levels are
to be tested with a result in September. The second well will be started after the fist test results ie September. Seismik shows that there is a possiblity that ENN extends to
the North with an eventual increase in reserves of around 30%, this will also be tested. Seismik is now be collected and should be finished by the end of June at which time a
2D seismik of 1600km will be initiated which will carry on until December.
Due to limitations in the excisting rigg the deepest levels, Basal Sand are not to be tested this summer but rather efforts will be centerd on pre-production drills so a plan of
action can be subbmitted as soon as possible. Hopefully a start to production can follow within 12 months or at best within 9 months. Schneiter thinks the plan could be
given the go-ahead by October or November at the latest. As touched on earlier the reason for the RSO stock's behaviour the last couple of day's is that an American Fund
Manager has seen fit to sell 1,2milj shares. This has been done without prior knowledge of RSO or on any information from RSO. These thing's happen says Schneiter. The
potential of NC117 is 2,7 biljon barrels it could be in excess of 3 biljon but 2,7 is a number the company can substanstiate. The southern ares of the block hold
larger prospects than does the North. The Southern structures could hold up to 8 times that of the North as the structure that Schneiter showed was 8 times
larger than ENN. The chances of this being so were deemded to be good. The Basal Sands in ENN has 3 zones and they are all to be tested. Because the 4 zones already
tested all showed good flows it is expected that the three new ones could hold 62,5miljon barrels.
7 companies are interested in farming part of NC117, a bidding round will take place in August. The outfarming would be 25% and the cost would be $2miljon per % of the
block, this could increase in price as new details become availabe concerning the extent of the reserves. The oil that has alreday been found is consequentlly valued at $2,5pb
= $200miljon total. It is thought that if Lundin can get the Vietnam contract signed he could finance the drilling himself, or rather Lundin Oil could. The contract is expected
to be signed within a month ie beginning of July. RSO would retain about 25% of all oil produced in Libya as the state takes 75-76%. With a production cost of about $2PB
Lundin could at today's rate keep $13PB....not too bad!
More to come...
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