Corporate update Pvr issued a corporate update to day and I recommend investors to read it. Most importantly there is more clarity on the four wells to be drilled at Barry roe including a deep well to test the lower oil below Barry roe which has 788 million bbl of proven 2c resources oil in place. Flowing testing of this deep target which has already been drilled will allow providence to determine how much is recoverable oil by flow testing this zone which was not done previously . Using a 30% recovery factor this could add another 200 million bbl of to the main barryroe oil of 346 million bbl equiv.the purpose of the drill program at Barry roe is to provide the detail for the field development plan. Incredible value to be had here based on Barry roe alone, all of which has been validated by a farm out which will fully fund the drilling of up to six wells. Low risk investment opportunity in a high risk industry. Jimmy
Newgrange Thanks Jimmy, It’s always a pleasure to read your posts
Newgrange The recent RNS about new grange is encouraging . Firstly it confirms that the seabed pockmarks also co incide with hydrocarbon traces in the seabed cores. This is likely to confirm and oil source and it’s migration. The shallow depth below the seabed of the prospect would seem to indicate that the migration of hydrocarbons is relatively recent and most likely post dates basin inversion that occurred offshore Ireland. If correct then the integrity of the top seal was not subject to the same stress as happened at dunnquinn north, which clearly leaked. Potential recoverable oil of circa 4 billion bible with a well cost of circa $15 million makes this a prospect with a very good risk reward, With such potential it should attract a lot of farm in interest. Obviously very high risk, but if pvr can hold 40% carried interest , it will be very exciting. Needs to be validated by farm out. Jimmy
Exxon Mobil to take 50pc stake at Iola prospect, Jimmy would you comment on the significance of this from a PVR standpoint, will this help get a farmout on Newgrange completed before end of year, thanks.
Questions for Jimmy23 Yes Jimmy, of course. Thanks very much Regards Fernan
Questions for Jimmy23 Fernan Did my previous post answer your questions J
Barry roe news? Excellent explanation as usual Jimmy Thanks very much Fernan
Questions for Jimmy23 Hi Jimmy. I´ve been following you in Chariot borad since 2011, and of course I apreciate your knowledge on oil and gas exploration. I read that the chinese planned to perform Drill Stem Tests in 3 out of the 4 wells to be drilled. Do you think this will be enough to validate the long term production potencial of the field? I understand that these type of tests are only for a few days duration. Is there any threshold that needs to be accomplished in order for the tests to be deemed as sucessfull (minimum quantity of barrels per day to be produced during the tests)? what do you think are the most important risks that can prevent the project to get to FID? Thanks in advance Jimmy, as usual Regards Fernan
Barry roe news? Fernan Over LSE has asked me a few questions which I will try to answer. Firstly let’s put the barryroe field and it’s development into perspective. The field was discovered by ESSO early 1970 s and five wells were drilled which established the presence of the major faults, the oil water contacts and established a flow test. There were two major issues which prevented the field being developed. The oil was great quality but it had a high wax content. The wax would percipate out of the hot oil as it’s being produced up the drill pipe and restrict the oil flow. The oil sand reservoirs were very thin, circa 20feet. Which because of seismic multiples (a type of echo) the sand reservoir was below seismic resolution. To determine major field features the geophysicists would map the rock below to determine the location of major faults. The problem is that small faults which could not be identified can restrict oil flow from one part of the reservoir to another. These faults need to be identified in order to locate production wells. In my view this problem prevented a farm out for a very long time. The first major issue was resolved in 2012 when PVR used a technology called vacuume tube technology to bring waxy oil to the surface without waxing up the tubing. The second issue was to map the reservoirs directly so that small faults in the reservoir could be identified which would allow production wells to be placed to optimally drain the field. A uk company called seismic image processors used a special computer algorithm to remove the seismic multiple and the reservoirs could be mapped directly for the first time. Within three months of announcing this Pvr had agreed farm out terms with the Chinese. APEC will spend circa $250 million to drill three wells and two side tracks and one horizontal well. So what will this achieve. The new seismic is interpreted by taking the actual well data from six previous wells to fix the seismic features to actual well data, well ties. The new seismic needs to be correlated to actual well results and by having an additional six data points the seismic can be used with accuracy to predict the exact location of the reservoir , hence any minor faults and hence where to optimally place production wells. Two of the wells will be flow tested, but we do not know for how long. The longer the flow test the wider area around the well bore that is measured to determine the oil flow performance. This would include identification of small faults by analysis of oil flow rates and pressures and then cross checking the location of such faults to those identified on the new seismic. Thus validating the seismic interpretation. However, a long flow test may not be necessary if the new seismic highly accurately predicts the precise depth of the reservoir before each well is drilled. After the drilling program is completed there will be twelve drilled data points to calibrate the seismic so that production wells can be optimally located . The horizontal well needs a highly accurate prognosis to drill sideways through a thin reservoir and this drilling program will validate this. I expect a horizontal well to produce circa 6,000 bopd. In addition this will demonstrate the use of vacuumed tube technology for use in horizontal wells. This will be important for detailed planning for development. Pvr previously estimated that there would be circa 30 production wells and peek production would be at 100,000 bbls per day. So the production flow rates needed are approx 3000 bopd. What could prevent a Final Investment Decision. Since the oil reserves are independently certified the major issue is to decide what will be the development plan. This new drilling program provides the data to finalize the plan. With six wells drilled on the field to date I believe it’s highly unlikely there will be a major change in the field that would prevent development. However, if the deep Barry roe prospect proves commercial oil then there will need to be a full appraisal of the deep field which has already found oil but not appraised. I feel the risks of the field not being developed are very small, and hence why the value opportunity is now so exciting. The Chinese are spending $250 million so serious money being put on the table. Jimmy
Barry roe news? Current market capitalization of PVR is equal to $1.00 per bbl of independent certified reserves net to pvr. No value to other assets, cash or huge upside in Barry roe deep. Even better value per bbl at LOGP. Drilling starting in 6 months to get data to finalize development plan. Jimmy
Providence Resources eyes up multi-billion barrel exploration targets Proactiveinvestors UK Providence Resources tipped for near 200% upside ahead of pivotal Irish well... Providence Resources PLC (LONVR) - Stockbroker Mirabaud has set a lofty new share price target for the Irish oil firm, but, even that only represents a small portion of the potential upside. For the market’s more speculative punters, it is probably worth noting that on an un-risked basis Midgley values the Barryroe stake at 152p while Dunquin South and Newgrange are ascribed values of 193p and 282p respectively. Mirabaud’s total, un-risked valuation sees the company worth 631.2p.
Providence Resources eyes up multi-billion barrel exploration targets Tor talking to sky news on. Sky News Ireland a step closer to massive oil boost Sky News - First for Breaking News, video, headlines, analysis and top stories from business, politics, entertainment and more in the UK and worldwide. Interesting he reports finding and lifting costs for the field at $25 per bbl and that peak production to be 100000 bbl per day. At $80 per bbl that works out at $1.46 million per day after tax profit net to PVR . Current market capitalization at circa 90 days production net after tax profits. Incredible value here and at lands down. And that’s not taking account of the upside for deep barryroe. Jimmy
TIPPED 200% UP PRE DRILL [link]