Northsea, Houston, Xpurt, Dudog...run the traps!
Some friends are indicating to me some special interest developing in block 248 in Fences II. I remember from the presentation some talk about this area, but I can't seem to remember the significance. I certainly understand this is a different geological play than the Rotliegendes, but I�m curious what makes block 248 different. I�m hoping some of you rock jocks can shed some light on the discussion. I don�t see block 248 mentioned in the updated presentation, but I seem to remember some slides from the Boston presentation. Apparently, this area is chocked full of Zechstein opportunities that look like some of the largest oil and gas discoveries ever made in Poland. I realize to date we have been discussing the Rotliegendes play in Poland, but I�m curious from a geological perspective the differences in the two plays and what makes block 248 different from any other blocks. Since we are waiting for news of drilling, I thought we might as well get some education from some of the board experts. I can shed decent light on CBM plays, but this stuff is slightly out of my league. If anyone is up for giving an old man a free tutorial, I'm all ears. Take Care, Bob
Thanks for replying to my questions.
"There�s more to this business that just drilling wells."
I am finding this out. Indeed, very interesting and exciting stuff. It would be great if there are other potential targets along where the main pipeline will run.
Is it conceivable that Cal Energy would be contracted to develop future wells?
As always, your incite is much appreciated.
That subject came up in a recent conversation with mgmgt. My understanding is that pipeline designs are in the final stages as well as gas sales contracts. The plans would be to drill offset/offsets to the Z. well so that they are scheduled to come in about the time the pipeline is completed. There has been new 3D seismic shot to help further delineate the structure and support the belief amongst the engineers that the structure was larger than earlier assumptions. I believe the interpretation of the new 3D has been recently completed. I don't view that there has been any delay. It takes some time to properly evaluate potential offset drilling targets.
They may be basing production volumes on what type of gas sales contracts they intend to have. Volume and pricing conclusions may determine whether additional wells are vertical or horizontal completions. All these decisions have an impact of facilities and pipeline designs. Not unlike a large residential home development, a master plan has to be designed. There very well may be additional targets along the potential route that need to be looked at that very well could affect the potential pipeline route. The good news is that FX�s partner Cal Energy Gas are experts on these types of projects. After all their owner, Buffett�s Mid American Energy is essentially a pipeline company.
You just don't slap up a line to the main grid without completely analyzing all potential routes and plans and your buyer and his contract will in many respects determine how you might flow the well or wells, which also plays into the design plans. The first one is always the slowest, but it's certainly my understanding that they expect to have gas sales in early 05 from the Z. field. There�s more to this business that just drilling wells. Walt
Any news on when Cal Energy will drill the next well to further explore the Z well discovery? Are they installing facilities to get the gas to market? Is it Cal Energy's decision to wait so long or is it the POGC that is holding up the drilling of the second well?
Thanks in advance.
<<Simply put, a shareholder has the opportunity to participate in a WI on 1.7mm acres without paying a single dollar on an AFE with unlimited non-consent privileges.
Try to find that opportunity no matter how much money you have. It simply doesn�t exist. >>
That�s a very interesting way to look at the situation. Drilling 200-500BCF targets for 2.5-3 million even at 50% success rates is very economic. Actually insanely economic.
Agreed, I'm in this thing as long as they can drill wells. The rest of 04 and 05 will provide us with plenty of action and returns. I sense we are very close to kicking off the first in a series of wells. I suspect non-stop action for the next 18 months. The current balance sheet supports a large number of wells and early next year substantial cash flow from the Z. discovery should kick in. Substantial NAV creation in close at hand.
I'm refraining from commenting about a certain moron. The ignore button is the best action for one certain raving clueless idiot. Walt
dudog and the other experts on this board....
there was talk recently about the possibility of FXEN being bought out by one of the majors if some of their prospective wells started producing. What would likely happen to the price of FXEN if that were to occur? Would it act like any company being bought out by another....my experience being that the purchased company stock usually spikes and the purchasing company stock usually drops...at least for the short term? It just seems to me that the true value of FXEN would be diluted if it was purchased by XOM or CVX.
Would one be wiser to sell on the spike before it was absorbed? Here's hoping it doesn't happen, but one never knows in this business. Thanks in advance.
WI = working interest = those who pay the bills to assemble the prospect and drill the wells.
AFE = Authority For Expenditure = a pre-drill estimate of the cost to drill a well. All parties involved sign this and is then responsible to pay their share of the costs whether the well costs more or less to drill. The AFE will show the Dry Hole Cost (DHC), which is money completely at risk, and the Completion Cost (CC), which is money that could be at risk if an attempt to complete the well is made.
****<And by the way, I'm not in the stock for $12 or $20...I'm in the stock to see if the company can drill 15 wells and find 4 or 5 TCF or more. Try to put a price on that. >****
That statement is exactly why I'm a stakeholder. In my humble opinion, it is a rarity in today�s exploration opportunities where a single company can explore a relatively under-explored, yet in many ways a proven basin that�s a direct analog to one of the most prolific hydrocarbon areas ever in the world, the North Sea.
Adding to my conviction is the fact that many of the same people who were on the leading edge of North Sea development and are now some of the most highly regarded geophysical experts out there, have assembled into a single unit to lead this effort. Simply put, a shareholder has the opportunity to participate in a WI on 1.7mm acres without paying a single dollar on an AFE with unlimited non-consent privileges.
Try to find that opportunity no matter how much money you have. It simply doesn�t exist.
I'll heading out of town Tuesday. Another vacation ends.