Bowleven Share Discussion Threads

[rm137] 15/10/2018 10:44

warbaby43 - like your style - if you can’t bet on the results, at least bet on when they’ll come in!.. Although after 30yrs of drilling results sweepstakes and never winning because I trusted either the drillers prediction of drilling time or the geologist prediction of net pay, I’ll be passing on this sweepstake. (You have to be seen to trust your colleagues, otherwise the get upset, and both drillers and geologists are sensitive souls). Like most engineers, I prefer to bet with some data in my back pocket, so I need to see the test results before getting too excited... and then some positive movement from New Age to get after FEED.

[warbaby43] 14/10/2018 11:26

Given "2-3 months" being the expected interval for the IM-6 Test Results RNS, we can reasonably expect that news arriving over the coming few weeks.

And given also expectations from those IM-6 Test Results should include "unlikely to get full .7tcf but assuming some uplift to 1.1 tcf" the IE-4 drilling result is not the only significant news on the near horizon.

In that regard too, were Ladbrokes to open a book, I would be putting a few bob on the IE-4 Preliminary Drilling Results RNS coming in early to mid November.

Pity we're not all in the same office or it could be tenners in and pick your date(s)

[oilretire] 05/10/2018 18:34

Bit of excitement towards the end of the day? And against the trend of most oil related SPs. Upper zones?

[rm137] 05/10/2018 12:13

secs in the city, warbaby43, regretfully it's worth clarifying what it takes to book 'Reserves' as compared to 'Contingent Resource'. Whatever the estimated discovered hydrocarbons at Etinde, it is classified as Contingent Resource until a development scheme has been established, including a route to market. You don't necessarily need FID, but you do need a clear line of sight to FID, and that means a FEED study(Front-End Engineering Design). And in the case of a gas development in West Africa, for a Reserves booking, there also needs to a gas sales agreement. And given that Etinde would be developed under a PSC (production sharing contract) with SNH (Cameroon state hydrocarbon), then this needs SNH approval, and under Cameroon petroleum law that also means Presidential approval is required for a project to proceed. Therefore without a development scheme, gas contracts and SNH approval, there can be no Reserves booking.

However, that's not to say there isn't value in Contingent Resource. But as we've seen in the Bowleven share price, Contingent Resource doesn't get realised in the share price unless there is clear line of sight to FID.

So, we should not expect a Reserves booking.

As regards the estimate of both liquids recovery and recovery factor, for a gas condensate development in multiple reservoir intervals at different pressures, the recovery factor will be a function of the wells count and production strategy. And the prices paid would be a function of the gas sales agreement, the liquid yield and the condensate prices at the time (3-5yrs ahead of now). With a PSC arrangement, there is also allowance for cost recovery, but the price for liquids is often governed by the PSC terms. Therefore, I would be very cautious with quoting recovery factors and valuations until the development scheme is established, a gas sales agreement is reached and agreement with SNH established.

As I have said before, this does not mean that the Bowleven share price can't move on good news.... the news required is clear signs of commitment from the operator, New Age, to a development...and that will be the FEED contract. Once there is a FEED ongoing, there is everyone reason to expect that the value of Etinde should be realised in the Bowleven share price. At the point, Bowleven's best option is to monetise and get out, since it will otherwise have to raise 25% of the development cost...

[secs in the city] 04/10/2018 19:30

Following IM-5, the Intra Isongo resource was assessed to contain 1.05TCF gas (about 178mmbbls) and 155mmbbls condensate, none of which is yet in reserves. The second penetration on IM-6 will allow conversion to reserves, and assuming a 60% recovery rate this would add 200m barrels to reserves (178+155 x 0.6). Eli indicated in the call that the gas/water contact was lower than assumed in IM5, so the figures might be larger. Existing reserves 290m barrels plus 200m = 490m barrels, hence I have no intention to mislead by quoting 0.5bn barrels.

Also worth pointing out that if nearly half is liquids then the economics changes a lot. The gas would only fetch $3 or $4 per cubic foot and there are about 8 cubic feet in a barrel, so $24-32 per barrel, but light sweet crude fetches roughly $87 per barrel now, so the liquids make it very attractive, given the valuation I don't think the market has clocked this.

[warbaby43] 04/10/2018 17:20

"there is a big reserves upgrade imminent following IM6 (though no new resource was found, the existing resource can be converted to reserves giving Etinde about 0.5bn barrels recoverable"

Pushing the boat out a bit with some .5bn assumptions, aren't we?

Etinde is currently assessed at 290 mboe and looking at my Conference Call notes at c8.10 my scrawl reads (I think) "In terms of IM-6 410 data ......not .7tcf but assume some uplift to 1.1 tcf"

As I recall Our Eli's tone was pretty confident that with the full results there would indeed be "some uplift" and the implication of that tone was that it would not be negligible but as for one of 72% - that we should be so lucky!!!

However, I take the main point that an uplift is most likely on the way and given his indicated timing was around 2-3 months from drill,which would have finished probably in the first week of August, we can probably expect to hear over the next month or so

[secs in the city] 04/10/2018 15:24

With two low cost offtake solution nearby (Bioko Island LNG in EG is working at half capacity) and Hilli LNG ship (also half capacity) I can't see it being left undeveloped for long, and many posters (Luck Counts) don't even understand that there is a big reserves upgrade imminent following IM6 (though no new resource was found, the existing resource can be converted to reserves giving Etinde about 0.5bn barrels recoverable, the potential of the existing resource was what got Lukoil on board back in 2014), how many 0.5bn fields are there so close to existing infrastructure valued at almost zero? Just the other day Total found 1TCF (170m barrels) off Shetland and the headlines said "major find," so Etinde at 0.5bn just can't be ignored, especially when about half is liquids.

[brileyloucan] 04/10/2018 14:54

Not necessarily, if you felt there was a 50% chance that Etinde would never be commercialised and the cash would be wasted trying to get it there and a 50% chance it would be commercialised and have a NPV of around £90m then you'd value the share where it is today.

I'm not saying this is the case but there could be numerous situations where the current valuation is appropriate. I obviously believe that it will be developed and the cash won't be wasted which is why I'm holding...

[cyan] 04/10/2018 14:22

We seem to be being valued on cash held plus FID payment ONLY.

ETINDE (maybe 1.1 TCF ) is valueless. Crazy situation now.

[warbaby43] 02/10/2018 17:32

With a hat tip to LuckCounts and Rivendell666 over at LSE:

[rm137] 28/9/2018 12:24

warbaby43, 700m is probably only a couple of days actual drilling time, so I wouldn’t expect timings much less than IM-6 unless the shallower target also means one less casing string, which is possible, in which case maybe around 7 days quicker to the IE-4 target, provided no drilling issues. Shouldn’t be any pressure surprises at IE-4, looks like there’s offset wells nearby so they probably have a better handle on the pressure vs. depth profile. IE-4 was the back-up location if IM-6 wasn’t successful in the 410, so by rights should be less risky, but also will be less volume and upside. I’d imagine that if it does come in, that Bowleven will hype it up, so we can expect some short term share price activity.... but it will be development commitment that sustains the price, so any call will need to challenge on the development schedule.

[warbaby43] 28/9/2018 07:47

"Bowleven need to provide some clarification on this...i.e. what was actually logged in the 510, 410 and 310 Intra Isongo intervals, and did IM-6 reach the higher pressure, deeper Middle Isongo interval and what was logged there."

Given indicated timescale for testing/interpretation, this should be available towards end October.

With regard to IE-4, IM-6 took c 78 days to 3,550m so with IE-4 going down to c700m lower, reasonable to assume around 10- 15 fewer days required, providing no greater pressure/temp, geological or rig problems?

[rm137] 27/9/2018 12:28

basti302, there are some inconsistencies in this information from the call, and from Bowleven which are probably worth following up on at the next call. First of all “gas shows in the 310 Intra-Isongo”... speaking as an industry professional, the phrase “gas shows” is usually used when the gas logging on the drilling mud returns indicates an increase in gas in the open-hole interval. Sometime this isn’t then identified in the logging runs. This can happen if the interval has been a conduit to hydrocarbon migration, but the seal has been breached, so the hydrocarbons have migrated through that sand interval without being trapped. The next sentence is misleading since it refers to logging runs in the Middle Isongo... while the 310 is identified as an Intra Isongo interval. This Middle Isongo interval is somewhat deeper and higher pressure, and I’m not even sure was encountered in IM-6. Bowleven need to provide some clarification on this...i.e. what was actually logged in the 510, 410 and 310 Intra Isongo intervals, and did IM-6 reach the higher pressure, deeper Middle Isongo interval and what was logged there.

[cyan] 27/9/2018 12:23

The headline was negative (not adding sufficient to hit 2tcf) but there were other indicators that sounded more positive.
On 20th sept i posted a brief note of what was said in the conference call;

'Commenting on the encountered hydrocarbons in the deeper middle Isongo sands;

12.02 mins " What's probably more interesting is that it does seem to provide support that the middle Isongo prospect identified does have legs and there maybe larger volumes of prospective resources in the license than currently thought." '

'larger volumes'? I wish BLVN would put up the conference call again. What's the problem?

[basti1302] 27/9/2018 10:58

Can anyone that heard the conference call on 21 Aug 18 expand on the info regarding the interesting 310 Intra Iinsongo.
In the news bulletin post drilling it stated:"The gas logging data collected in the 310 Intra-Isongo showed gas shows during drilling. Well log data and reservoir fluid samples taken provide a good indication that, the Middle Isongo sections in particular, are of interest as the two horizons both show condensate rich reservoir fluid samples".
Although the 510 Intra Insongo level was a dud there was High gas pressures that exceeded the rig design at 3550 meters and as the statement above alludes to condensate rich reservoir I am wondering if I have missed something. Surely this is good news or have I got it completely wrong?

[cyan] 27/9/2018 10:28

Yes Slip, there is smart money in BLVN holding for the future.

[slipanchor3] 27/9/2018 09:17

New Shareholder List

1 Crown Ocean Capital P1, Ltd 28.94% 94,756,697.00
2 HSBC Global Asset Management (UK) Limited 8.02% 26,249,682.00
3 Ophorst Van Marwijk Kooy Vermogensbeheer NV 5.20% 17,043,934.00
4 JPMorgan Asset Management U.K. Limited 3.50% 11,453,913.00
5 M & G Investment Management Ltd. 2.03% 6,644,863.00
6 CA Indosuez Wealth (Group) 1.62% 5,316,703.00
7 Hof Hoorneman Bankiers N.V. 1.32% 4,331,874.00
8 Alliance Trust Plc. 1.26% 4,136,761.00
9 UBS Asset Management (Switzerland) 1.20% 3,921,756.00
10 Hotchkis and Wiley Capital Management, LLC 1.16% 3,786,878.00
11 River and Mercantile Asset Management LLP 1.08% 3,549,430.00
12 Martin and Peggy Lamb JT Tenants 1.02% 3,327,834.00
13 FPM Frankfurt Performance Management AG 0.92% 3,000,000.00
14 Standard Life Investments Ltd. 0.56% 1,838,299.00
15 DMS Bank & Trust, Ltd. 0.53% 1,737,310.00
16 Tabetando (Ndieb-Nso George) 0.51% 1,683,445.00
17 Arkus (Gregory Samuel) 0.49% 1,594,118.00
18 Merseyside Pension Fund 0.46% 1,500,000.00
190,000. 1MSN. 0.0001%. 1,100


This time next year Rodders

[slipanchor3] 26/9/2018 13:11

Ramayer

There are only 2 offshore vessels in attendance and 1 vessel on traffic duty the rest are passing traffic. We have also had a visit from the Seacor Cheetah which was alongside the rig for a couple of hours.
The rig is still on the spud coordinates so everything looks normal.
GLA

[ramayer] 26/9/2018 11:07

Slip can you see anything interesting around the rig seems to be lots of vessels around, could we be testing something already?

[dianecarberry] 24/9/2018 18:07

RM137

VOG have many thermal customers for their gas (36 at last count paying up to $16 mmbtu) in Douala and they are good customers who pay up on time. Big users of gas include Dangote/Nestle/Guiness etc. This market is growing. 5 year contracts.

Sadly it is ENEO/SNH and the Cameroon government where the problem lies with payment for the gas/power generation.

BLVN will suffer the same with these rogues.

(GSA are not legally enforceable anyway)

[ramayer] 24/9/2018 18:01

Do the Chinese want etinde?

[rm137] 24/9/2018 16:31

Don’t doubt that doing business in Cameroon is difficult, as in any African country. The discussion is really what are the triggers to an increase in Bowleven share price. The value driver for Etinde, and therefore Bowleven, is a sanctioned project and hence identified costs and revenue. As well as a proper engineering solution and a route to market, the JV will also need enforceable gas sales contracts. It may be that this becomes the key that delivers sanction, i.e. guarantees around gas sales contracts.

As far as I can tell, VOG’s business onshore Cameroon is not at the same scale and gas is sold to a variety of small local industrial players on a short term basis; this would imply that they didn’t sanction the project with enforceable gas sales agreements. But then at the scale that the are operating, and the capital investment needed for a small onshore field, this also makes sense. The upside is that at times they may get a good price for the gas; the downside is that they are exposed to the commercial risk of business in Cameroon.

[dianecarberry] 24/9/2018 14:45

Doing business in Cameroon is a nightmare.