The opening of the West Qurna 2 / day capacity of 120 thousand barrels per day

The opening of the West Qurna 2 / day capacity of 120 thousand barrels per day [Baghdad - where] Production starts on Saturday in the West Qurna oil field / 2 in Basra province in the presence of Prime Minister Nuri al-Maliki. A source in the Iraqi Oil Ministry told all of Iraq [where] that "the field is operated by Russia's Lukoil 75% will begin initial production in which the amount of 100 000 to 150 000 barrels per day and will increase this percentage in the next few days." He said the "oil in the giant field is one of the best types of oil extracted in Iraq." And will attend the start of production of each of Prime Minister Nuri al-Maliki and Vice President for Energy Affairs Hussain al-Shahristani and officials in the Russian company officials as well as local and members of the media. The Russian Lukoil announced at the time of the former near the start of production at the West Qurna / 2 card of elementary [120] thousand barrels per day. The director of the drilling operations of the company Vadim Miller, a reporter [where] "It will be drilled 24 oil wells in the compound of No. 6 has been drilled 8 wells so far is under testing and inspection, and it turned out that the productivity of each well of these wells 7.5-10 thousand barrels per day." He disclosed that "the company will produce in the second phase of 1.5 million barrels of crude oil per day." For his part, deputy director of the oil processing plant project Vitaly Dischof reporter [where] that "the company is implementing its obligations through the implementation of the first phase of development of the project and plans to reach production to 120 thousand barrels per day." The company is developing a giant oil field revealed in 22 of the month of October 2013 its intention to sell oil from the field [the West Qurna-2 in the province of Basra to China. The company acquires 75% of the value of the project, compared to 25% for the Iraqi Southern Oil Company National. The Lukoil signed a contract with the Iraqi Oil Ministry for 20 years to develop the second phase of the West Qurna field in Basra province in a bidding round in December 2009, vowing to produce 1.8 million barrels per day within six years. And Qurna is one of the largest oil fields in Iraq and has proven reserves of 12 billion barrels him from Alinv. http://www.alliraqnews.com/2011-11-25-02-00-52/124829--2-120-.html افتتاح حقل غرب القرنة/2 اليوم بطاقة 120 الف برميل يومياً [بغداد-أين] يبدأ اليوم السبت الانتاج في حقل نفط غرب القرنة/2 بمحافظة البصرة بحضور رئيس الوزراء نوري المالكي. وذكر مصدر في وزارة النفط العراقية لوكالة كل العراق [أين] ان "الحقل الذي تديره شركة لوك أويل الروسية بنسبة 75% سيبدأ الانتاج الاولي فيه بكمية 100 الف الى 150 الف برميل يومياً وستزيد هذه النسبة في الايام القليلة المقبلة". وبين ان "النفط الموجود في الحقل العملاق يعد من افضل انواع النفط المستخرج في العراق". وسيحضر حفل بدء الانتاج كل من رئيس الوزراء نوري المالكي ونائبه لشؤون الطاقة حسين الشهرستاني ومسؤولين في الشركة الروسية فضلا عن مسؤوليين محليين واعلاميين . وكانت لوك اويل الروسية اعلنت في وقت سابقا قرب بدء الانتاج في حقل غرب القرنة/2 بطاقة ابتدائية قدرها [120] الف برميل يوميا. وقال مدير عمليات الحفر للشركة فاديم ملير لمراسل [أين] "انه سيتم حفر 24 بئرا نفطية في مجمع رقم 6 حيث تم حفر 8 آبار حتى الان وهي قيد الاختبار والفحص وظهر ان انتاجية كل بئر من هذه الابار 7.5-10 الاف برميل يوميا". وكشف عن ان "الشركة ستنتج في المرحلة الثانية 1.5 مليون برميل من النفط الخام يوميا". من جانبه قال نائب مدير مشروع محطة معالجة النفط فيتالي ديشكوف لمراسل [أين] ان "الشركة تقوم بتنفيذ التزاماتها من خلال تنفيذ المرحلة الاولى لتطوير المشروع وتخطط ان يصل الانتاج الى 120 ألف برميل يومياً". وتقوم الشركة بتطوير الحقل النفطي العملاق وكشفت في 22 من شهر تشرين الأول 2013 عن نيتها بيع النفط من حقل [غرب القرنة-2] في محافظة البصرة الى الصين. وتستحوذ الشركة على 75% من قيمة المشروع مقابل 25% لشركة نفط الجنوب العراقية الوطنية. يذكر ان لوك أويل وقعت عقدا مع وزارة النفط العراقية لمدة 20 عاما لتطوير المرحلة الثانية من حقل غرب القرنة في محافظة البصرة في جولة عطاءات في كانون الاول 2009 متعهدة بانتاج 1,8 مليون برميل يوميا في غضون ست سنوات. وحقل القرنة هو من أكبر حقول النفط في العراق ويبلغ الاحتياطي المؤكد له 12 مليار برميل من النف. http://www.alliraqnews.com/2011-11-25-02-00-52/124829--2-120-.html ======================== LaoKhao. I will tell you why. I have been investing very successfully for over 40 yrs and I have seen all this before. I have always made the most money when I have simply trusted my own research, decided to buy and held and ignored advice from amateurs and professionals alike. Most people when giving out investment advice have a motive. This board is full of the one line brigade who post negative sentiments with no rational explanation. I have invested a huge sum with GKP because I believe the oil will eventually be sold and the reserves will gradually increase. I also believe GKP will be sold in the next 12/24 months. =================== You have to ask yourself why these people expend so much time and effort posting nothing but negativity, bile and vitreole and belittling others who would rather look forward instead of stewing over the past. If they are indeed still invested then they need to sell and move on for the sake of their own health. Sadly, call me cynical but I don't believe many of these individuals are invested, it just makes no sense to post 24/7 about how the end is nigh !? Perhaps one or two of these disingenuous posters could actually explain the reasoning behind their campaign of hate and their desire to impose their supposed superior view point on others ? I suspect they are either very bitter at sitting on a substantial paper loss, which whilst perfectly understandable doesn't excuse their incessant need to trash the share and shout down anyone with a remotely optimistic outlook, or they have an ulterior motive, which, if so, is embarrassingly obvious and transparent not to mention tiresome. Sadly I've put one or two previously respected posters on ignore, along with more than a number of not so respected ones, for the sake of my own sanity. This share is too stressful enough without having to contend with the psychological water torture of a few clearly unhealthily obsessed individuals waging their campaign of doom. The fact remains, if you don't like/trust the company or don't believe in their prospect, sell up, move on and get on with your life, for the sake of everyone's sanity. ============= Nobody is going to be interested in buying GKP - we have been told that daily here for years and it therefore I finally accept it must be true. Any serious IOC would rather spend years $'bns drilling all around our sludge find. Why anybody would be interested in buying the largest and locked oil sorry sludge find for a generation is beyond belief ? The best thing to do is sell these pronto if you haven't already. The CB's at 273 will never convert so when the cash runs out these funders have done $ 325m in as well- the greedy and clearly stupid BOD setting their options at 275 325 and 375 are also clueless, as they will never see these options in the money. Simon Murray even though he is still a director on Li Ka Shing's holding company and was responsible for building Orange and selling it to Mannesman for $30bn is also away with the fairies buying 160,000 at £ 2 - he's done his nuts in too - whacko. Li Ka Shing - I don't give a flying faaark if he is the most astute and wealthy Asian businessman of the past 50 years ............................well he is clueless and ..............his 30m+ will be down the khazi here soon as well. As for dumbnuts Asher still holding 15m+++ as our deputy chairman ( former head of Global oil at Glencore and chief exec PA Consulting ) - well he has already dropped £ 18m in 6 months. So he has another £15m to toss away soon too. Those heady days £ 4+++ when Ren was still in bromance with Todd - B77 was a GKP millionaire - was a 'fit up' by Todd of course. Just because since those heady SP days when a takeover was a foregone conclusion and we are now 70% cheaper in the market ,and we now have > 200% more OIP - clean title - revenues - physical export route - production - some very prospective drills - a conservative CPR - massively improved politics -and the best CG in the sector - means diddley squat to our possible takeover prospects. I'd sell mine but I am romantically attached to GKP so just can't. Sooner these go negative the better IMO. I'm then going to pile into Tesco. ============================ Mon 23:26 Irrational fear investor48 30 Hello Everyone, I woke up this morning to see the SP hammered down.It really beats me that this fund raising for production is causing so much fear to everyone. The way we have been sold down,looks as if we are raising monies for the next well that is so critical that if no oil is found,GKP would have to close shop!! GKP is sitting on OIP of 12.5billion barrels across 4blocks of it's concession.We have AB that we could sell,may be not at USD350million but below USD200million.We have the BIRS that we have carried for the KRG and exports worth approximately USD100million. This irrational fear has driven many to sell,triggered by an institution selling,margin calls or fearful PI's. Not long ago we were fearful of Excalibur and if they had won they would have gain 30percent of Shaikan GKP's prize asset.During that fearful period the SP was well above 100p.May be on hindsight it would have been better to have Excalibur win because they would have had a share of Shaikan and thus required to put in at least USD250million,and we would not have required to carry out this fearful fund raising that the city has used to spread fearful rumours!! Now we have production and exports happening and just because GKP has to raise monies to continue with our increased production,our SP is 86p!! It really beats me,how market rumours can drive people to being fearful or exuberant.Most Majors and NOC's spent billions for exploration and there are no certainties that they will find any oil. The SP is still very volatile and we just have to ride this wave of irrational fear. Goodluck and best wishes to all =================== Mon 23:26 Irrational fear Investor48 Author's posts Hello Everyone, I woke up this morning to see the SP hammered down.It really beats me that this fund raising for production is causing so much fear to everyone. The way we have been sold down,looks as if we are raising monies for the next well that is so critical that if no oil is found,GKP would have to close shop!! GKP is sitting on OIP of 12.5 billion barrels across 4 blocks of it's concession. We have AB that we could sell,may be not at USD350 million but below USD 200 million.We have the BIRS that we have carried for the KRG and exports worth approximately USD 100 million. This irrational fear has driven many to sell,triggered by an institution selling,margin calls or fearful PI's. Not long ago we were fearful of Excalibur and if they had won they would have gain 30 percent of Shaikan GKP's prize asset.During that fearful period the SP was well above 100p.May be on hindsight it would have been better to have Excalibur win because they would have had a share of Shaikan and thus required to put in at least USD250 million, and we would not have required to carry out this fearful fund raising that the city has used to spread fearful rumours!! Now we have production and exports happening and just because GKP has to raise monies to continue with our increased production,our SP is 86p!! It really beats me,how market rumours can drive people to being fearful or exuberant. Most Majors and NOC's spent billions for exploration and there are no certainties that they will find any oil. The SP is still very volatile and we just have to ride this wave of irrational fear. Goodluck and best wishes to all ============= Hi Nordel I personally feel that there's too much of a big deal beng made about us having to raise exactly 250 mil. So what happens if we only raise 200 mil? Does that mean we're going to go bust at the end of May? I think the chances of us going bust at the end of May are extremely slim. The market seems to feel that our jugular is currently exposed and that they can dictate terms and give us a rough ride. We have very few shares in treasury and this needs to be increased so come the AGM I would hope and expect that the company raises the number of shares so if it wishes to do a placing, it would have the ability to do so. Now a lot of people will say they don't want a placing but I think I would have preferred to take some slight dilution as opposed to the drop in the price that we've recently had. I think that because of some of the mismanagement we've been left with limited funding options which doesn't make for a strong company so I'm quite happy to deal with any shortfall in funding later in the year by which time I think we will be in a much stronger negotiating position with hopefully a much strengthened share price. That's not to say I think there will be a shortfall just dealing with the fears that are being spread in the market. All the best Oilman63 ================= 10,000 shares bought at well over double today's price. That is not a small amount of money and yes it is devastating. Although why you would feel the need to dig at someone who is losing money on a purchase of GKP shares baffles me. Having now read the CPR from front to back, I have every right to feel let down, disappointed and devastated by what has happened here. Particularly the in depth analysis of water contacts, inflow and financial projections. I don't know if the BOD directly misled shareholders or not, particularly on OWCs and self funding to 100K+ bpd, but I certainly do look forward to Gram's analysis on at least the former point. But then Toby, you and I originally disagreed as you felt my £5 per share 2015 target was deramping. £5 a share by 2015. Negative. Uh huh. Do we need to go over your ramping and projections again? That you seem to delight in this low share price and investors losing money, while still proclaiming massive share price increases from here says a lot. =================

Gulf Keystone Update

Posted on 13 March 2014. Tags: Akri-Bijeel, Ber Bahr, GKP, Gulf Keystone, Shaikan, Sheikh Adi Pages: 1 2 3 4 Gulf Keystone Petroleum (GKP) has this morning provided an Operational and Corporate update, and released a third party audit of the Company’s reserves, contingent resources and prospective resources for its petroleum interests in the Kurdistan Region of Iraq. Summary The Company continues to maintain current stable production and sales levels of approximately 10,000 barrels of oil per day (“bopd”) from the Company’s first Shaikan production facility (“PF-1″) in the Kurdistan Region of Iraq, which is expected to increase in Q2 2014 as a result of the recently tied-in third production well, Shaikan-4, which is now flowing. The second Shaikan production facility (“PF-2″) is being commissioned, with two wells (Shaikan-2 and Shaikan-5) already tied in and the first production from PF-2 expected in Q2 2014. The Company remains focused on achieving the target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014. Since crude oil exports from the Shaikan field commenced in December 2013, in excess of 105,000 tonnes (690,000 barrels) of oil have been tendered and sold at international prices. The Company is expecting to receive payment, in line with the terms of the Shaikan Production Sharing Contract. In order to move to the next stage of the Shaikan project execution, the Company is making progress in its discussions on the near term debt financing options. Production and Development Shaikan (75% working interest; Operator) Stable production operations and sales from PF-1 continued in January, February and March 2014 at the level of approximately 10,000 bopd (gross). Total cumulative production from late 2010 to date from Shaikan has reached 2.1 million barrels. Since crude oil exports from the Shaikan field commenced in December 2013, three cargoes totalling in excess of 105,000 tonnes (690,000 barrels) of oil have been delivered from PF-1. The fourth cargo of approximately 33,000 tonnes (215,000 barrels) of Shaikan crude is expected to be delivered later in March 2014. In addition to the presently producing Shaikan-1 and Shaikan-3 wells, Shaikan-4 is now tied into PF-1, has started to flow and is expected to increase the current output in Q2 2014. An amine plant is currently being connected to PF-1, which will allow sweetening of some of the associated gas stream, which will be used as fuel for the PF-1 operations instead of diesel, representing savings of approximately US$400,000 per month to the project. The Shaikan-2 and Shaikan-5 wells have now been tied into PF-2 and the production facility is currently being commissioned with first production, initially of approximately 10,000 bopd, expected in Q2 2014. The connection of Shaikan-10 to PF-2 will also be completed in Q2 2014, increasing PF-2 production capacity. The Company is focused on achieving the target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014, which it intends to reach through: ◦Potential re-configuration of Shaikan-8, initially drilled as a gas injection well, into a fourth producer tied into PF-1 ◦Tie in of the deep exploration well Shaikan-7, which is currently being drilled, to become the fifth producing well at PF-1 ◦Productivity enhancement of the Shaikan-1 and Shaikan-3 wells through the replacement of the existing 3 ½” tubing by 4 ½” tubing ◦Plans to drill an additional production well in the proximity of Shaikan-10, which will also be connected to PF-2, and install four flowlines between the Shaikan-10 location and PF-2 The Company’s focus is on the ramp-up of commercial production from the existing Shaikan facilities. The move to 40,000 bopd of production capacity will allow further expansion of export crude oil sales. The additional cash generated, in addition to the Company’s near term debt financing options where the Company is making progress in its discussions, will facilitate the move to the next stage of the Shaikan project execution. This next stage envisages a further 60,000 bopd of additional production capacity in order to reach the medium-term target of 100,000 bopd set for Phase 1 of the approved Shaikan Field Development Plan. This next stage will require construction of additional production facilities with gas injection and water handling capabilities, as well as the drilling of a substantial number of development and production wells. Exploration & Appraisal Shaikan (75% working interest; Operator) The Shaikan-7 deep exploration well is currently drilling 17 ½” hole below 2,600 metres in the upper Triassic. Shaikan-7 will drill into the deep Triassic, after setting casing at the bottom of Kurre Chine B formation, and is then expected to penetrate the Permian with the first results expected in Q2 2014. Sheikh Adi (80% working interest; Operator) The first well to appraise the Sheikh Adi discovery, which spudded in December 2013, is drilling below 2,240 metres in the Alan formation in the Jurassic. A well testing programme to evaluate the potential of the Jurassic reservoirs in the Sheikh Adi footwall is currently being designed, before the well enters the Triassic. Approximately 111 km of new 2D seismic data acquired in the north of the block during 2013, is being processed to evaluate potential new structures. Ber Bahr (40% working interest) The Ber Bahr-1 exploration well was successfully side-tracked in the first half of 2013 and tested 2,100 bopd of 15 degree API oil from the Jurassic Sargelu formation. A 3D seismic survey is underway, planned for completion by mid-year 2014. Ber Bahr-2, an appraisal well, is planned to spud in the fourth quarter of 2014. Akri-Bijeel (20% working interest) Further to the declaration of commerciality of the block by the operator in 2013, appraisal drilling continues and work is ongoing on the Field Development Plan for the Bijell and Bakrman discoveries, which is expected to be submitted to the Ministry of Natural Resources of the Kurdistan Region of Iraq in Q2 2014 and approved later in 2014. The operator plans to complete four appraisal wells on the Bijell discovery and one appraisal well on the Bakrman discovery in 2014. Bijell-1B has been side-tracked, completed as a producer in the Sargelu formation in the Jurassic and tied into the Bijell Extended Well Test facility (“EWT”) where initial flow rates of 3,500 bopd of 23 degrees API oil have been recorded. The operator expects that production from the Bijell EWT facility will reach its full capacity of 10,000 bopd of export quality crude by the end of 2014. Bijell-2, a deep appraisal well targeting the Triassic horizons of the Bijell discovery, is currently drilling 12 ¼” hole below 4,750 metres in the Kurre Chine Anhydrite formation. Bijell-4, an appraisal well targeting the Jurassic horizons of the Bijell discovery, is drilling ahead below 2,800 metres in the Tanjero formation. Move to the Main Market As previously announced, the Company expects that its common shares will be admitted to the Standard Segment of the Official List of the United Kingdom Listing Authority (the “Official List”) and commence trading on the London Stock Exchange plc’s (“LSE”) main market for listed securities effective at 8.00 a.m. on or after 24 March 2014 (the “Admission Date”) (together the “Admission”), subject to the receipt of the necessary approvals from the UK Listing Authority and the LSE. Trading in the Company’s common shares on the AIM market of the LSE (“AIM”) will be cancelled simultaneously with the Admission. The Company will issue a prospectus in connection with the Admission prior to the Admission Date. As part of the Company’s move from AIM to the Official List, it is today publishing the Competent Person’s Report on the petroleum interests of Gulf Keystone Petroleum Ltd and its subsidiaries in the Kurdistan Region of Iraq (“CPR”), which has been completed by ERC Equipoise Ltd. This is the first third party evaluation of the Company’s Reserves, Contingent Resources and Prospective Resources for the Shaikan field and its other petroleum interests in the Kurdistan Region of Iraq (Sheikh Adi, Ber Bahr and Akri-Bijeel blocks). It is available on the Company’s website. Todd Kozel (pictured), Gulf Keystone’s Chief Executive Officer commented: “Progress achieved since July 2013, when we commenced commercial production from Shaikan, demonstrates that Gulf Keystone is evolving from an oil and gas exploration company to a production company targeting production capacity of 40,000 barrels of oil per day in 2014. “Another significant milestone in this journey is our forthcoming move from AIM to the Main Market of the London Stock Exchange and we are another step closer to achieving this goal after publishing the Competent Person’s Report today. “We see significant upside to this important baseline third party estimate of reserves and contingent resources, which will be targeted through the implementation of the approved Shaikan Field Development Plan in the coming months and years.” (Source: GKP) ================ 15% off m cap for 16 mill shares traded or 8 mill sold if you like , This is precisely the kind of atmosphere where people think if I just press that button it will all be over!......Were listing in a few days on the main market dont do something you might regret. If you are going to sell dont read this BB for opinions for help /advice make your own decision away from the PC over a cuppa and then do it if you think its right for you dont get caught up in the herd mentality on here. The derampers are going bananas today absolutelly bananas! Im not saying dont do it if you really have had enough but just be carefull in how you formulate the decision thats all. Luck all ============================= Well I have to say I am pretty astonished by people's reaction to the CPR: somehow spooked into selling. Still, provided the savvy a great opportunity to enter/top-up. The reserves quoted in the initial CPR were always going to be ultra-conservative. But that's not the point. Actually I was pleasantly surprised to see the CPR Shaikan OIP figure of 9.2 billion barrels. Sure it's not 13.7, but it is an independent audited third-party confirmation that, just as the company has been telling us for a while, we have found a super-giant multi-billion barrel oil field. The reserves figure quoted so far is just the tip of the iceberg. In time, as field development proceeds, there is no reason to suppose that an industry-normal recovery rate will not be achieved. Meaning that several billions of barrels will be added to the reserves. But that's not the point of the initial CPR. What the CPR does is put an independent audited third-party valuation on, not the company as a whole, but on the absolute minimum amount of oil that is guaranteed to be present, and recoverable using wells that have already been drilled. Why? To establish the value of an asset that can now be booked on to our balance sheet. Yes we can have a $1billion asset on our balance sheet! And that asset provides collateral for a loan. And with a full 75% WI in current sales, that loan does not need to be all that large to kickstart the development plan, as I have posted before. Good luck all long-term investors. Hold the nerve - we always said this road would be rocky! SilkStillDreaming ======================== Still digesting how the management allowed us to get into this position. One word that TK and JG were at pains to emphasise on Thursday was 'complex'. There is no disputing that this IS a complex project. They are both (and Ewan) keen to promote themselves to the big league and pay themselves the big salaries and bonuses. In my opinion they are out of their league. There is no question about the massive potential and upside of the 4 blocks but these guys do not have the experience to manage this project. I go along with I48's post today and hope that a predator takes a big enough share and removes the current management team. I presume that a technical audit, such as this CPR, would be discussed and the contents agreed with the customer prior to publication. The implication, therefore, seems to be that there was an extended period of argument and discussion with GKP board - a battle that our people finally lost, at least in respect of SH-6. JG, in response to Will Forbes, said the DGA/RS people had "been there every day" whereas the ERC people had "only looked at a couple of wells" - implying that their dataset was limiting their evaluation. This puzzled me - if true, surely the customer could have insisted on many more wells being evaluated in order to get a more accurate picture? Re. the Q&A session, I was amazed at the poor quality of analyst's questions - and at their lack of determination in getting full answers; Nlper, Ren and Bonobo did a much better job at the Paris AGM. ============ I was reading through the Edison report and looking at comparison of RF of Genel vs GKP. What confused me most was that Genel gets credited with a 20% RF whilst we are getting 12% on average. OK Different geology differnet places etc etc BUT When I compare our joint asset - Ber Bahr - Genel report a RF of 22% and GKP EDC are reporting around 6%. Now forgive me but surely its the same oil in the same place, but with 2 wildly different RF..... === Also noticed that the oil above the isotherm is not included in EDC. This accounts for 70% of the stoip difference between 18B from Gkp and the 13 from EDC. Or 3.5 billion oip. They are ignoring this because they say it's too tarry to flow. However for around $50-$100 million they can flow this oil using steam injection and blending. Even at 10% rf this would add 350million barrels of oil - and let's half it for arguments sake say 300 million b Resolve playground squabble on sh6 oil water contact and you add 300m depth and circa 300 million barrels Add to this genel RF of 20 - or let's take it lower and just say 16% and add another 200 million barrels You get to around 800 million barrels additional Now sh7 is hopefully light oil. They have been near this depth before Nd had to stop because pressure was off the scale - sh7 could be another 250m of light. (Ok. So looking a bit more then So all in all I think another one billion barrels will get firmed up within 12 months. If they find light oil in sh7 I bet you will see a change to the fdp. And 2 billion 2p+2c at $6 makes double digit billions on core NAV Now it's late and I may have units wrong - all off the top of head. But I'll work it out , or someone else can What would be interesting is to compare to CPR assumptions that genel use and read across to Gkp. Anyhow over 24 months I can't see a big geological issue preventing significant reserves upside. =========== There are people on this and other bb's who would have you believe that as a result of the CPR being published The Mighty Shaikan has shrunk and vast amounts of oil have disappeared. This is of course complete rubbish and it is just the nature of a CPR that only a very restricted and conservative amount of oil is recognised . In any event even on the CPR figures it is of a size that any major would give their right arm to own. I wonder what all those other companies are doing exploring for oil in Kurdistan. Why drill in hope when you could buy in certainty with GKP. We had all the fuss about appointing the famous four at the instigation of a couple of our institutional shareholders however this doesn't seem to have had the desired effect so far if we look at the sp. However one thing you can be absolutely certain about is that Deutche Bank (whom Simon Murray knows very well) will not have announced the move to the main market without having all their ducks in a row. The financial arrangements will have been sorted. The Mighty Shaikan is at an early stage of its discovery and recovery of its oil and it will be very interesting to see what reserve figure is credited to it in 2,5 and 10 years time because that's what the big boys will be bidding for. If you believe as I do that the Mighty Shaikan will prevail continue to hold or buy more on Monday. If you don't believe (and actually hold any shares ) then sell and move on to something you are comfortable with. ========================= Perhaps the ultimate irony now on this board, in that the 'TK to stay' crew are now an insignificant minority. I think you can count these club members on the fingers of one hand. I wonder if they'll still be so positive about GKP's future when the current top table are replaced, for surely they will be. We are truly sunk without hope if the main market doesn't trust the top table. I wonder how Todd feels this morning, fully in the knowledge that his only supporters now in the entire financial markets amount to not much more than a failed washing-machine salesman and a retired plumber? I wonder how Robert Kuok feels this morning, staring at his c.£15m paper loss - that is if he even still holds his 'slightly less than 3%' number of shares? Its taken a few years, but even i48 has finally seen the light and turned. Change will come, driven by the M&G4, Capital, and The City etc, who will surely gather strength, force an EGM to oust the value-destroyers and replace them with people they can trust. Texan cowboys will simply not be tolerated on the main market. The days of real accountability and building shareholder value on facts, not hype, have started, and we need a builder at the top - not a perma-tanned salesman - and I'm sure our BoD have known this for a very long time. From the moment change started and the M&G4 arrived, the BoD must have been planning their exit from the business. If not, then they've been very very very naïve indeed. Todd - if you really cared about your company, and its shareholders, surely you can see that it would be for the best if you chose to take a very long cruise on your super yacht sometime soon? Todd - do the decent thing. Take the deal and go. You know if you don't, it will simply be forced. ============ Re: I'm with you first thing Monday will be topping up GKP now a screaming buy … need to raise more cash quickly , can see a trip to the bank manager on the horizon this week --------- Opulentia, I do not know you. And I admire your enthusiasm. However, you have been calling this a 'screaming buy' all the way down. Now, many of us (including myself) have made the mistake of thinking it can go no lower. But with long term supports breached, no clarity of finance, hardline 'revision' of numbers (whether you agree or not), it is perhaps unwise to keep banging the 'screaming buy' drum, until the dust settles. I would certainly be wary of approaching your bank manager and possibly over-extending. I hope you can hold on to your shares until they all come back into profit, because your posts in 2014 alone provide a good illustration of the slow car crash that this investment has become (and perhaps how blinded retail investors - including myself - have often got) - 09.01.14 Little top up … with the good progress going forward, it would be rude not to Transaction type: Buy Executed Price: GBP 1.81625 21.01.14 some more golden tickets into my pot Transaction type: Buy Executed Price: GBP 1.807 29.01.14 Transaction type: Buy Executed Price: GBP 1.637 03.02.14 Nice little Top up, unbelieveably cheap , never thought id get some more golden tickets at these prices, really helps bringing average down Executed Price: GBP 1.568675 07.02.14 My top up this morning Price dealt: £1.6285 17.02.14 happy to add even at 156p 26.02.14 managed a top up this morning in the 140,s thanks Mr MM, 12.03.14 Transaction type: Buy Executed Price: GBP 1.4518 13.03.14 picked up a stack of shares at under £1.10. --- Many will try and call the bottom here. Could be 95p, 87p, 64p, 35p … depending on who you listen to. It might be wiser to ignore the prevailing SP and wait until the ship has been steadied (or a new captain placed at the wheel). Sincere good luck. ============================ Baghdad regains control in oil disputes Iraqi Prime Minister Nouri al-Maliki speaks in Baghdad on Jan. 12, 2014. (THAIER AL-SUDANI/Reuters) By Ben Van Heuvelen, Patrick Osgood, Rawaz Tahir, and Staff of Iraq Oil Report Published Thursday, March 20th, 2014Iraqi central government authorities have regained leverage in their long-standing oil disputes with the autonomous Kurdistan Regional Government (KRG).Just a few months ago, the KRG seemed poised to solidify the independence of its oil sector by sending crude through its new pipeline to the Turkish border. But those plans have been complicated both by scandals swirling around Turkish Prime Minister Recep Tayyip Erdogan and by a newly assertive government in Baghdad.As more than 1.3 mill...

The Real Risk

71.38 -0.25 (-0.35%) Add to portfolio Set Alert Level 2Re: The real Risk Equation.BOR.Lday123Sorry can’t understand your post.“We (the Broker) derive a core value of 73p assuming 1Bn recoverable resources” equates to only 48c/bbl. That can’t be correct. Then they go on to say a pre-drill price target of 116p. The two statements are completely inconsistent.Then the same NAV is quoted with a different resource estimate and a COS which I assume is the Brokers COS of two discoveries being made (e.g. 1 prospect with 25% COS and 1 with 20% or 1 at 50% and 1 at 10% etc.)All a bit confusing, can you clarify at all?Re: WWG - BORdering on Success etc View parent messageVotes for this Posting Voted 12 times.Messagereh1 You asked if I attended the AGM and what was my view which may indicate you have not read the 3 parter “BORdering on Success” that I submitted to thesharehub. I did indeed attend and frankly was astounded (astonished)at what I saw. The articles incorporate what I saw and heard there and which was clarified in a subsequent phone call with them. So for convenience here it is in one post (provided we don’t test iiis document limit). Apologies to those who have already read these articles but I don’t think you can copy and past thesharehub articles but you can with this one. I love to annotate, highlight, make stuff bold etc so if you are the same you can do so!I realise that this doesn’t address the investment case that we have been discussing. I will come back to this vis a vis FOGL in a post later today if Mrs G doesn’t derail me lol!I much appreciate the discussions we are having. I have been careful to maintain the same thread and I think most others have. We should take advantage of this quality time before we are disrupted.BORdering on SuccessPART I INTRODUCTIONThe focus of oil exploration in the Falkland Islands is about to shift from the North Falklands Basin to the South Falklands Basin. The venerable Ocean Guardian, the 3rd generation rig which has done a fine job in the modest water depths of the NFB will shortly depart. It will be replaced by the Leiv Eriksson, a superb high spec 5th generation rig, that is ideally suited to handling the extra demands of the deep water SFB.The rig has a four slot contract and is set to drill firstly for Borders and Southern and then FOGL. It is currently on its way down from Greenland to the F.I. and is making very good progress off the coast of Africa. The purpose of this series of posts is to provide investors thinking about whether to invest in BOR with additional information to supplement that which is available through the BOR website. It is not intended to provide a complete investment case but hopefully it provides additional insights into the opportunities and risks associated with BOR. Investors researching BOR will have noted the CPR was written way back in 2005 with the benefit of only three or four 2D lines which provided minimal coverage over its acreage. The CPR documented some leads that required further seismic before they could be matured into prospects of drillable quality. Since then a grid of 2862 km of 2D seismic lines was acquired in June 2005 and the acquisition of 1492 km2 of 3D seismic was completed in February 2008. The 3D was processed and interpreted in 2008/9 and a portfolio of prospects was developed. In November 2009 $195MM was raised in a placing. BOR has two very high quality prospects named Darwin and Stebbing that are to be drilled in its first campaign which is scheduled to commence in late January 2012. Both prospects are structural traps which are generally much more straightforward and lower risk than stratigraphic traps such as FOGLs Toroa prospect that failed and a number of the prospects in the Nth Falklands Basin that were dry holes. To fully appreciate the quality of BORs prospects you had to be at the AGM in June 2011 to see the 3D seismic displays as unfortunately they were not uploaded to the BOR website afterwards. There were only about 15 attendees at the AGM to witness the seismic. Hence the fact that it has two prospects of this calibre may not be widely appreciated amongst private investors. These posts give some insights and support for this point of view. Discussions immediately after the AGM presentation revealed that, when BOR did it’s fund raising in Nov 09, the institutions saw the material subsequently presented at the 2011 AGM. The IIs were extremely quick to express their requirements having brought in their respective consultants to review the prospects. It was massively oversubscribed; a scaling down to 10% was mentioned.One of the factors that should have influenced IIs with technical representation and support is the geological setting of BORs acreage. It is located in a fold and thrust belt area and contains the North Scotia Fold Belt. About 1 in 7 barrels of the world’s oil reserves reside in fold and thrust belts. When these work they can be extremely successful, for example the Zagros foreland fold and thrust belt in Kurdistan much liked by GKP investors. BPC shareholders are also invested in this type of play. The North Scotia Fold belt is adjacent the North Scotia High which is an extension of the Andes. The Andes fold belt contains over 34 Bn bbl oil and 31 Bn BOE of gas in a number of basins. The southern most of these is the SFB, San Bernando Fold Belt which has reserves of 4.6 Bn bbl oil and 1 Bn BOE in gas. However before discussing Darwin and Stebbing it is helpful to understand why this company has a relatively low profile amongst PIs. This has been shaped by competitive pressures and BORs philosophy regarding release of Prospective Resource estimates. BORs Strategy and PhilosophyBOR is highly unusual in the world of AIM oil companies and unique, from what I have seen, amongst FI explorers in that it has a large portfolio of prospects but has not shown them to the wider investing community. Prior to the 2011 AGM the absence of presentation material and prospect portfolio details mystified me. This appeared to be a warning flag, were the prospects rather weak? If so why was the market cap of BOR higher than FOGL which had a wide portfolio of prospects, albeit they were defined on 2D only? It transpires there is open acreage alongside BORs current licenses that must be of interest to BOR and it has been very careful not to put seismic displays into the wider public domain for competitive reasons. So why haven’t they published a table listing numerous prospects and the total portfolio resources? BOR does not subscribe to this approach. The background of the management team includes a strong link with BHP and they have brought the philosophy of a major to its approach. The team thinks that this over states the total resources because of the inter dependency of prospect risk. If one prospect fails, the risk of failure of similar types of prospect increases. BOR feels there is a credibility issue amongst informed IIs with publishing a large prospect portfolio when many prospects share the same risk. It doesn’t want to overstate its position and was confident enough to approach the markets for funding based on its lowest risk prospects only. The Darwin Prospect will be discussed In Part II; why it is such an exciting prospect and IMO what risks remain.PART II THE DARWIN PROSPECTThe first post in this series explained why BOR has a rather low profile versus so many other AIM oil explorers. This post discusses Darwin, the first of two prospects that it will drill during 1Q and 2Q 2012. It should be read in conjunction with information on the BOR website. Components of a Petroleum SystemThe four components of a petroleum system have to be present for a prospect to work and become a commercial discovery namely:• A source rock that is sufficiently mature (cooked) to have generated and expelled a sufficient quantity of hydrocarbons with a migration route to the prospect.• A trap (container) within which hydrocarbons can accumulate. • A seal i.e. an impermeable rock to prevent expelled hydrocarbons from escaping to surface and preserve the hydrocarbons at pressure.• The presence of a reservoir rock with sufficient thickness and porosity to hold a commercial quantity of hydrocarbons and sufficient permeability to enable the hydrocarbons to be produced at commercial rates. Source Rock Presence Maturity and MigrationThese topics are addressed in the 2005 CPR. An early Cretaceous source rock is proven to be present and effective in the Malvinas sub basin and Magallanes basin to the west of Darwin. A late Jurassic to early Cretaceous rich, oil prone source rock is present in the DSDP wells to the north east of Darwin. This source rock is immature (under cooked) at the shallow depths encountered in the DSDP wells. Scott Pickford state “the top of this source rock interval is likely to be within the oil generation window within the B&S acreage and over 100 Bn bbl of oil could be available for trapping.” This is quite a claim!However both these examples are distant from Darwin. The Toroa well, drilled in 2010, is much nearer and about 75 km from Darwin. This found 120m of good quality source rock which was immature at the Toroa location. This was expected as Toroa was drilled on the margin of the basin at an up dip location. At Darwin the source rock will be buried deeper and BOR expect it to be in the oil window and have generated oil. A cartoon presentation in FOGLs investor presentation of 19 Apr 2011 suggests it is a mid or early Cretaceous source. Analysis indicated the source rock comprises deltaic shales with a mixture of marine and terrigenous (land derived) organic matter that were subsequently buried to produce a Type II/III mixed, oil/gas prone source rock. BOR believe Darwin was deposited in a marine setting further offshore than the deltaic near shore environment of Toroa. The source rocks would therefore not contain the terriginous matter found at Toroa that would be prone to generate gas. Although 75km is still some distance from Toroa, BOR contend that they have a good tie between the Toroa well and the BOR prospects via 2D and 3D seismic. This implies good continuity of reflectors. BOR stated at the AGM that there was not much activity on the regional tie line between the Toroa area and the BOR acreage, mostly flat shelfal sequences. High Quality Seismic Attributes Reduce Trap, Seal and Reservoir Risks The risks associated with the other three components have been reduced by favourable effects seen on the 3D seismic known as seismic attributes. These attributes suggest the presence of hydrocarbons and are classed as DHIs, Direct Hydrocarbon Indicators. They act to increase the chance of success of each component of the petroleum system and therefore the overall chance of a discovery. It turns out that Darwin has almost a full suite of DHIs, the Full Monte! TrapDarwin is a tilted fault block which is a style of trap common in the North Sea and amongst the first to be recognised and drilled in the early days of North Sea exploration. Brent Field is an example. The top of the structure is defined by a high amplitude event or amplitude anomaly. Amplitude anomalies are often referred to as an example of a DHI. In some areas they are an indicator that sands containing hydrocarbons may be present. The reliability of amplitude anomalies is variable and they may simply be an indicator of sand or due to an event unrelated to the presence of reservoir rocks or hydrocarbons. In this case the amplitude anomaly is believed to be associated with the presence of a sand of equivalent age to the Springhill formation. This formation spans the Upper Jurassic and Lower Cretaceous and in the adjacent Malvinas sub basin the Lower Cretaceous sands are widespread. FOGL reported the presence of Springhill sands and mid Cretaceous age sands in their Toroa well. This is discussed further in the discussion on reservoir presence.So the amplitude anomaly associated with the top of the prospect is encouraging but it alone does not reduce the risks sufficiently for my risk tolerance level. What the high amplitude does do however is enable BOR to map the depths of the top of the structure with some confidence and see the dip (inclination) in the formation. It has also helped BOR identify faults. The shape of the container, a trap formed by the faulting and the dip of the formation has been clearly identified. That trap has created an opportunity to collect hydrocarbons within its confines.SealThe structure is expected to be sealed by overlying mudstones. A lateral seal across the faults is expected so long as the sand to sand contact is prevented by the throw of the faults. At the downdip spill point the fault throw permits sand to sand contact. The key seal risk is whether hydrocarbons could have leaked up the faults into shallower sands or siltstones with sufficient permeability to allow the hydrocarbons to escape.Additional Quality Seismic AttributesBOR presented a seismic section that showed a most striking “flat spot”. This term is used to describe the appearance of a seismic reflector that is horizontal. Flat spots are rare because most seismic events are not horizontal. Formations usually have some element of dip or inclination which can vary from a few degrees to near vertical in highly deformed areas. Indeed the top of the Darwin prospect has a definite dip. Also the fortunate conditions in which rock and fluid properties come together to produce a flat spot are not present in most fields. The exploration well is usually drilled without the benefit of the risk mitigation provided by seeing a flat spot on the seismic.Explorationists are usually extremely encouraged when they see a flat spot. It very often represents a fluid contact in the reservoir since in nature these contacts are usually horizontal due to buoyancy/gravity effects. I don’t recollect seeing a convincing flat spot in any of the prospects of the AIM oilers that I have reviewed. There was a suggestion of one in an early review of the BPC 2-D but there has been no further comment on it from BPC in later work. Likewise a flat spot was observed in the Liz fan area in a 2006 DES paper but it was not mentioned in the 2009 CPR. (The Liz fan was tight but deeper wet gas and deeper dry gas discoveries were made.) And what an impressive flat spot it is in Darwin. It stood out like the proverbial dog’s b******s on the line displayed. However this is not a one off. Apparently it appears on every line within the confines of the trap at a certain depth. The flat spot ends when it meets what appeared to be two intersecting faults (it could be one that changes direction). In the down dip direction the flat spot ends at a particular depth contour on the top structure map. It conforms very sharply to this depth contour. This is what is known as “amplitude conformance with structure” and greatly increases confidence in the prospect. The absence of this anomaly outside the trap created by the fault(s) suggests the fault(s) seal and the trap could contain hydrocarbons.Drilling on a seismic amplitude anomaly is a very common approach to exploration; explorers will point to an amplitude anomaly on their prospect as evidence of a DHI. But it is much less common that the amplitude anomaly conforms so beautifully to structure and it is this feature that really endorses the prospect. The BOR geoscientist who mapped the prospect stated that the only thing he had seen in the Nth Sea with as good amplitude conformance with structure is Statfjord, one of the early discoveries in the Nth Sea and one of the region’s best fields.Investors should be aware that it is possible to get a “false” flat spot as an artefact of other effects but there are often clues that this is the case. One such case is when the signal associated with a flat seabed is repeated deeper in the section, sometimes at more than one time interval. However, I did confirm with BOR that the flat spot was not a sea bed multiple, the absence of the flat spot outside the structure pointing to this. A flat spot may also be produced by an Opal transition (transformation of amorphous silica to quartz). There is a famous example in well drilled in Greenland. These occur at much lower temperatures and shallower depths than expected in the Darwin Prospect. Thus, IMO, the flat spot is a genuine fluid contact.BOR has interpreted the flat spot as an oil water contact but it could also be a gas oil contact (i.e. gas sitting on top of oil) or a gas water contact. Flat spots are known to occur in all three fluid systems when properties are favourable. Unfortunately, this being a frontier basin, BOR does not have rock property data from a nearby well that would enable it to calibrate the seismic and narrow the alternatives.A gas water contact would confirm BOR has a working hydrocarbon system and would bode well for other prospects in the vicinity where the source rock remains in the oil window. However it would be disappointing as there would be a longer delay in monetising a gas field than an oil discovery. Fortunately a potentially large gas discovery, Johnson, has been made in the NFB so this would increase the probability that, collectively, sufficient gas could be firmed up to justify an LNG project. The gas and oil case is of particular interest, because as discussed later, it is projected to contain a higher oil volume than the oil on water case. High amplitudes are also present downdip of the flat spot. The colour scheme employed conveyed the impression that the amplitudes downdip, whilst higher than elsewhere, were not as high as in the flat spot area. The downdip termination of the bright area appeared to be somewhat consistent with a top structure contour but it was much more ragged than the termination of the flat spot. Also it was difficult to tell whether it was coincident with one of the faults dying out and therefore consistent with the spill point of the structure which is likely to occur when the fault throw is sufficiently small to allow sand to sand contact across the fault. It was not clear to me whether this effect could be due to an oil filled sand or whether it was a lithology effect or a combination of the two. BOR indicated there were “a couple of things going on” in this area one of which was moving from a sand prone area to a muddier area.The presence of a genuine flat spot derisks migration timing risk. The trap would have to have been in place whilst hydrocarbons were being generated and expelled from the source rock.The final seismic attribute that Darwin possesses is an AVO response. AVO, which stands for amplitude variation with offset, refers to a variation in seismic reflection amplitude according to the distance between the shot point and receiver. Usually amplitude decreases with offset due to spreading and attenuation. If a hydrocarbons reservoir is present and the reservoir has a lower acoustic impedance value than the surrounding shales then the seismic response can be an amplitude increase with offset. Alternatively, if it falls, it falls at a lower rate than exhibited by the surrounding events. The exact nature of the AVO response was not discussed. However suffice to say BOR see this as another encouraging attribute that partially derisks the prospect. Reservoir Presence and QualityPotential reservoir sands were encountered in the Jurassic to Cretaceous aged Springhill Formation in FOGL’s Toroa well. The FOGL post well evaluation, stated “Based on wire-line log interpretation over 30 meters of net sand were penetrated, with porosities ranging from 18% to 32%. As such, the Springhill play is still viable elsewhere within FOGL's acreage.” (Ref RNS of 19 Nov 2011.) BOR believes that the amplitudes across Darwin would not be as strong if the sands did not have good porosity. The continuity of the flat spot also suggests that the sand is not broken up by shale barriers at least in the depth range of the flat spot. In other words there is at least one thick, continuous sand interval. So if at least one thick sand interval of good porosity is present then the permeability thickness product should be sufficient to support commercial rates provided the oil is not unduly heavy. This would be extremely unusual at the burial depth of 2600m indicated in the ES 'Environmental Statement'. BOR estimate the oil will be 32 API (clearly there is a range of uncertainty around this value).Remaining RisksAt this point it should be made clear that Darwin comprises two adjacent, very similar prospects. The prospect is referred to as Darwin East in the Environment Statement and must therefore be the eastern one of two displayed at the AGM. Its twin, which was shown on the same display as Darwin East, also has a flat spot and amplitude conformance with structure. It was not clear whether there is any significant difference in the risks between the two prospects and why Darwin East was chosen in preference to Darwin West.What are the remaining risks? One of the unfortunate aspects of seismic is that a reservoir rock containing a low percentage of gas can produce a similar amplitude response to one with a much higher percentage of gas. BOR explained that adding a small percentage of gas to oil can produce the same effect as a gas accumulation. Hence the inability of uncalibrated seismic to distinguish between an oil accumulation, which normally has a volume of solution gas dissolved in the oil, and a gas accumulation. However this lack of clarity may also extend to water. If late stage movement of the faults has occurred due to the growth of the North Scotia Ridge this might lead to loss of fault seal integrity. If a gas accumulation has leaked out of Darwin all that would be left would be “fizz water”, which is water with a small residual gas saturation. The level at which the fluid transitions from fizz water to aquifer water with no gas might appear on seismic as a flat spot. The flat spot would be a paleo-gas water contact i.e. one that existed prior to leakage.However the CPR is encouraging in that it points out this type of fault block play has proved effective in both the Magallanes and Malvinas Basins. These two basins contain the majority of the North Scotia Ridge and it extends into BOR acreage. This would suggest fault reactivation is not a major problem in these basins. Prospective Resource VolumesBOR estimates the P50 recoverable resources for Darwin are 300 MM bbl for the oil on water case, and about 3TCF for the gas on water case. Both of these cases infer that the reservoir is not full to spill. The BOR website says the P50 recoverable resources for the entire structure down to the spill point are 760 MM bbl oil. However it does not make it clear whether that assumes the entire structure is oil filled or this is the gas on oil case. At the AGM it was stated that the full to spill case was ¾ Bn bbl oil and 3 TCF of gas. This would make more sense because if the Darwin is entirely oil filled to the mapped spill point there would be no explanation for the flat spot since it appears much shallower than the mapped spill point.Development costs will be higher than the NFB but a 300 MM bbl field would be highly economic under the F.I. fiscal regime. Gas alone would require other SFB gas discoveries to be made before an LNG project could be undertaken or a cooperative arrangement with any future NFB discoveries or extensions would be needed. In the event of a gas discovery that proves a working petroleum system BOR is likely to reassess where the source rock is in the oil window and focus on this area. Part III, the final post of this series will discuss the Stebbing prospect and present an overall summary of the attractions and risks of investing in BOR.PART III THE STEBBING PROSPECT AND OVERALL SUMMARYThe first two posts in this series explained the background to the relatively low profile maintained by BOR and discussed in some detail BOR’s Darwin prospect the first well to be drilled in the 2012 SFB drilling program. This post covers the Stebbing prospect and concludes with an overall summary of the attractions and risks of buying BOR. Stebbing ProspectBORs second prospect, Stebbing, has as its primary target a 4 way closure, the simplest form of petroleum trap. It relies on a top seal only to contain the hydrocarbons whereas a stratigraphic trap requires a top and bottom seal. It appears to be a frontal fold caused by the formation of the Nth Scotia fold belt. Scott Pickford considered this as the primary play fairway in BOR acreage.A characteristic of fold belts is that the closure created by the fold (structural height of the anticline from crest to spill point) can be very significant. This creates the opportunity for stacked reservoirs within the fold and therefore a large field size. An extreme example of this is the Shaikan Field that GKP holders are so familiar with, which has at least six reservoirs within its closure. BOR states that closures of up to 3000m are present within its acreage which is comparable with Shaikan down to its Jurassic spill point.It believes there are reservoirs in the Tertiary and Upper Cretaceous sandstones. In the Tertiary there is a meandering amplitude anomaly of variable strength that BOR interpret is a channel sand system that got caught up when folding took place. Discussion of the Cretaceous trap was limited at the AGM. I recollect it was a tilted fault block and it has an amplitude anomaly but no flat spot unlike Darwin. BOR presentation material indicates that, like Darwin, Stebbing has AVO anomalies but unlike Darwin there is no flat spot.The Tertiary channel sands system is the primary target. Its burial depth is 990 m below the seabed which is relatively shallow. Porosity should be well preserved at this depth and sand permeability should be good. Oil quality is a potential issue due to the possibility of biodegradation at the lower temperature expected at this depth. BOR has estimated the oil would be 25 API. This is similar to APIs encountered in deep water Angola where the reservoirs are buried at a similar depth.Stebbing is significantly larger than Darwin. The P50 Prospective Resource is about 1.3 Bn bbl split roughly 700 MM bbl in the Tertiary and 600 MM bbl in the Cretaceous. Only the highest amplitudes within the Tertiary channel system are included in the P50 estimate. Stebbing too has one of the most sought after direct hydrocarbon indicators. There are very high amplitudes in the shallow section that appear to be gas hydrates. Hydrates are a solid that is formed by the combination of methane and water. The higher pressure exerted in deep water promotes the existence of hydrates at the relatively low temperatures in the shallow part of the subsurface section below the seabed. These conditions do not exist in shallower water so this is one of the advantages of the SFB. Hydrates can be associated with gas leakage from fields underlying the hydrates. In fact hydrates are present above most of the oil discoveries in certain parts of Angola’s prolific deep water acreage. Hence in certain areas they are a marker for an underlying gas or oil field. If this turns out to be the case in BOR acreage there are other hydrate events that could derisk other prospects. In some cases the hydrates are formed from biogenic methane rather than from a hydrocarbon source rock. However it would be an unlucky coincidence for shallow biogenically derived hydrates to just happen to sit immediately below a prospect with an AVO anomaly. BOR Overall SummaryFrontier plays by their nature are risky due to the absence of wells to calibrate the seismic. BOR is one of the most exciting frontier plays on AIM at the moment due to the quality of its prospects and location of the acreage in a fold belt, one of the world’s few remaining unexplored fold belts. The Darwin and Stebbing prospects are different play types so are relatively independent of one another and are supplemented by other play types in the BOR portfolio. Each is of a scale that would be transformational for the SP in the event of a single success whilst two discoveries would make it the hottest oil stock on AIM. The Darwin seismic displays shown at the AGM were jaw dropping because they showed two excellent examples of the most powerful indicators of hydrocarbons that seismic can provide, a booming flat spot and amplitude conformance with structure. The combination of the two is, according to the geoscientists I know, “As good as it gets in seismic terms”. If as it appears the flat spot confirms hydrocarbons have accumulated in the Darwin trap this derisks source rock presence, initial trap integrity, migration and timing, seal risk and reservoir presence. Residual risks are subsequent loss of trap integrity due to fault reactivation and risk of gas.If anyone knows of a small AIM oiler with equally encouraging seismic on its acreage (i.e. all of the following attributes well defined structural trap, flat spot, amplitude anomaly with conformance to structure, AVO, regional source rock and sands present elsewhere in the basin, gas hydrates above a structure) then it would be interesting to see the corporate presentation showing this. Very rarely IMO does one get the opportunity to participate in a well with so many positive aspects to the seismic. Investors in exploration stocks frequently find they have participated in an exploration prospect that has never seen a drop of oil or sniff of gas. With Darwin the seismic strongly suggests the prospect has received a charge of hydrocarbons. That puts Darwin well ahead of most exploration prospects. The question is how much remains in the structure and what is the mix of gas and oil? If the fault seal is holding BOR is likely to have opened up a company making play type. Darwin East and West are significant but there are good reasons to believe there is follow up potential. Fold belts are known for their prolific number of traps. The Scott Pickford CPR identified 5 leads within the paltry seismic available at the time. One of these leads is likely to have matured into the nearby prospect Sulivan South.Stebbing offers significantly greater scale. It too is a well defined structure this time induced by folding. The shallow hydrate DHI is very encouraging as are the amplitudes which appear to show a channel system in the Tertiary. Moreover there is a secondary target a Cretaceous tilted fault block so you get two bites of the cherry. The fold belt is present throughout most of BORs blocks so it is fair to assume that follow up potential exists elsewhere alongside the ridge. One example appears to be the Fitzroy prospect.However it is a frontier area and as such it still carries risks, even the best looking seismic does not guarantee success. BOR has not revealed their estimate of the chance of success of either Darwin or Stebbing and there were no prospects available at the time of the 2005 CPR to measure it against. It is most definitely not a slam dunk and I would not go all in. If both prospects fail substantial funds (>$50MM) should remain but the share price will suffer. However, IMO due to the quality of its two prospects with three targets BOR is most definitely worthy of inclusion in a portfolio of shares with differing levels of risk. Regards and GLAGramacho

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Harry Winston, others circle BHP's diamonds - source
Wed, Mar 14 13:10 PM EDT

* BHP said in November it was considering sell all or part of diamond assets

* Focusing on large, long-life, scalable assets

* Several suitors circling EKATI, review to conclude mid-2012

* BHP's 80 pct stake in EKATI valued at $500 mln to $1.5 bln - analysts

LONDON, March 14 (Reuters) - Diamond miner and luxury jeweller Harry Winston is among several potential suitors circling BHP Billiton's majority stake in the EKATI diamond mine in Canada, a person familiar with the matter said on Wednesday.

BHP, the world's largest miner, focuses on large assets and said last year it was considering pulling out of diamonds. It sold its majority stake in the Chidliak project in northern Canada to partner Peregrine in December.

Harry Winston is one of several jewellery makers that have gone into mining to secure access to rough diamonds. It is already a partner of Rio Tinto at Diavik in Canada's Northwest Territories, Canada's largest diamond mine.

Harry Winston raised its stake in Diavik, which is just some 100 km from EKATI, to 40 percent in 2010 after buying back a share it had sold to miner Kinross Gold during the financial crisis.

"They and others have continued to look at securing the diamond supply to their downstream business, and arguably they have done a better job," the source with knowledge of the bidding process said. "They are definitely kicking the tyres."

Other suitors which have considered the BHP mine include some of the diamond industry's emerging players, the source said. Private equity houses have also been reported as potential bidders for the asset.

"It is a good cash flow business but there is a limited mine life," the source said. "From a cash flow perspective it is a good business if you can get it for the right value. It is pretty supportive of some leverage and given the outlook on diamonds... (private equity) may take a view on that."

But industry sources have cautioned against expecting a sale, as BHP has indicated it could also hold on to the operation until the end of its mine life in 2019, unless it gets attractive offers.

Last year, Harry Winston Chief Executive Robert Gannicott told Reuters the company was not interested in another producing mine, but rather was looking for development-stage assets.

"What I'd like to find is something that hasn't yet been started up, but with a recognized resource," Gannicott said in an interview in May 2011, before BHP announced it was reviewing its diamond presence. "Or a resource that we can measure and understand its true value."

BHP had initially expected a conclusion to its diamond review early this year, but extended that deadline in February to the end of the first half.

EKATI, the cornerstone of BHP's diamond business, has annual sales representing 11 percent of global diamond supply by value.

Analysts' estimates of the price tag the mine could fetch vary widely, from $500 million to over $1.5 billion, and even as high as $2.7 billion for BHP's 80 percent stake.

BHP and Harry Winston declined to comment.

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