Westmount Energy Share Discussion Threads

[xxnjr] 12/8/2020 15:22

very good analysis! Thanks.

[phoebusav] 12/8/2020 12:24

Kaieteur Block

I assumed that one of the 7 planned wells would be Toucan however this week's presentation suggests we should swap this out for a well on Block 47. That said I'm sure they will drill Toucan as it's a really big target with an excellent COS.

Tanager … P50 MMB 256.2 gross, 3.91 MMB net, 72% COS
Toucan … P50 MMB 702.7 gross, 10.72 MMB net, 56% COS

Canje Block

The plan appears to be to spud Bulletwood in the next few weeks followed by Jabillo and Sapote. I have used the P50 figures as per the JHI audio presentation cited on this board, however I was uncertain on the figure for Sapote, but apparently it is roughly the same as Jabillo. I have not seen the COS figures so assumed 30%, which seems ultra conservative as it is lower than the figures for ECO's Cretaceous targets and given Exxon has chosen to prioritize these drills I would imagine it should actually be over 50%. I used 30% in calculating WTE's risked NAV, so in actual fact the risked NAV should probably be quite a bit higher as these targets are particularly significant for WTE on a net barrels basis.

Bulletwood … P50 MMB 500 gross, 4.2 MMB net, 30% COS
Jabillo … P50 MMB 1,200 MMB gross, 10.08 MMB net, 30% COS
Sapote … P50 MMB 1,200 MMB gross, 10.08 MMB net, 30% COS

Orinduik

The exact drill targets have not been specified, but based on the sounds coming from ECO and TLW I'm certain they will be targetting Cretaceous prospects. I have chosen the targets in the NE quadrant of the block as they are closest to Liza and Hammerhead and furthest from the heavy oil Triassic discoveries of Joe and Jethro.

Amaila/Kumaka … P50 MMB 775.8 gross, 0.93 MMB net, 31.5% COS
Iatuk-D … P50 MMB 725.3 gross, 0.87 MMB net, 31.2% COS

These 7 drills amount to 40.8 MMB P50 net to WTE although we should probably now swap out Toucan for Goliathberg Voltberg on Block 47.

Block 47

I can't tell if the well would target Goliathberg Voltberg South or North target or both if they are stacked.

Goliathberg Voltberg South … P50 MMB 368.4 gross, 0.52 MMB net, 37% COS
Goliathberg Voltberg North … P50 MMB 234.7 gross, 0.33 MMB net, 34% COS

Conclusion

It is clear that the vast majority of value for WTE lies in the Kaieteur and Canje blocks with most of the value from this drilling campaign coming from just three of the scheduled wells. The total P50 net to WTE across the licences amounts to 97.3 MMB, with 57.6 MMB on Canje, 32.2 MMB on Kaieteur, 6.2 MMB on Orinduik and 1.3 MMB on Block 47. Clearly, success at the first two wells, Tanager on Kaieteur and Bulletwood on Canje would derisk the lions share of value in WTE's portfolio. Not long to wait to find out.

[phoebusav] 10/8/2020 10:49

Having crunched the numbers for the prospects across WTE's 4 blocks in Guyana and Suriname, WTE's total exposure amounts to 97.3 MMB P50 net recoverable with an average COS of 31.3%. At $5 per barrel that equates to £379M or 301p unrisked and 94p risked. The current drilling plan for the next 12 months appears to be for 7 wells which I anticipate will be [Canje Block] Sapote, Jabillo, Bulletwood, [Kaieteur Block] Tanager, Toucan, [Orinduik Block] Amalia/Kumaka and Iatuk-D. This amounts to 40.8 MMB P50 net recoverable to WTE or 126.5p unrisked and 51.7p risked at $5 per barrel. Prior to the Covid crisis Hess and Exxon were touting $7 per barrel for Guyana oil in the ground and ECO topped that valuation on hitting pay dirt at Joe and Jethro. This would equate to 177.1p unrisked and 72.4p risked for WTE. The great thing is this target price is based on accretive value from multiple largely Exxon operated wells rather than a single high risk binary event. Given the immense success so far on this fairway I will be very surprised if WTE does not have 5 to 6 major discoveries and at least 30 MMB under its belt this time next year and a share price well north of 100p.

[phoebusav] 09/8/2020 14:16

hxxps://oilnow.gy/featured/stena-carron-set-to-arrive-at-tanager-1-today-as-search-for-more-oil-in-guyana-continues/

[donmac101] 09/8/2020 11:24

Government is just looking for a better slice of the pie.

[phoebusav] 09/8/2020 10:46

The Stabroek licence contract was signed in June 2016. If the new government insists it is honouring that contract it seems impossible that any contract signed prior to Stabroek could be altered. This appears to be a non issue for WTE and the fact that drilling is proceeding suggests Exxon agrees.

[robs12] 08/8/2020 19:05

@ein4 - yes (edited) they were awarded before the 2015 election, but now there has just been a change of government. The PPP (new government) have previously stated that they will renegotiate all oil licenses other than Stabroek. We'll see in due course.

Looks like the drillship is on the way to Tanager-1:

hxxps://marad.gov.gy/wp-content/uploads/2020/08/Notice-To-Mariners-55-of-2020-3.pdf

Great news! (courtesy of harel posting elsewhere)

Irrespective of the risk of contract renegotiation, WTE still has (very) good potential to multibag IMHO.

[ein4] 08/8/2020 11:51

The new government is the same party that awarded the original licences as far as I know? So ,I do not see any problems with them in power regarding licences?
?

[donmac101] 08/8/2020 01:12

Tanager1 on kaituer and bulletwood on canje spudding this month .Big things ahead for wte
Going to be massive as canje is a sump for stabroek s8 billon barrels whats not to like iam all in

[donmac101] 07/8/2020 22:08

Tanager1 on kaituer and bulletwood on canje spudding this month .Big things ahead for wte
Going to be massive as canje is a sump for stabroek s8 billon barrels whats not to like iam all in

[robs12] 03/8/2020 11:05

The PPP (previous opposition party) has now won the election and the new president was sworn in yesterday:

hxxps://www.nytimes.com/2020/08/02/world/americas/guyana-president-ali-oil.html

This is what they (the PPP) had to say about the licenses (specifically excepting Stabroek) in February:

"The People’s Progressive Party (PPP) intends to renegotiate, with the exception of the Stabroek Block Production Sharing Agreement (PSA), all oil contracts."

Albeit that is reported by what may be a somewhat biased local press (who also state they want Stabroek renegotiated):

hxxps://www.kaieteurnewsonline.com/2020/02/14/ppp-govt-would-renegotiate-deals-for-kaieteur-canje-other-blocks-opposition-leader/

Let's hope that Exxon and the consortium(s) carry enough weight to get it resolved quickly. One hopes it's towards the top of the new government's "To Do" list too.

[phoebusav] 30/7/2020 21:24

July 30, 2020

“The Stena Carron will next move to the Kaieteur block in which Hess holds a 15% working interest to spud the Tanager-1 well, which is located 46 miles northwest of Liza,” Greg Hill, President and Chief Operating Officer of Hess Corporation told investors on Wednesday.

A block-wide application for environmental authorization to conduct oil and natural gas activities on the deepwater Kaieteur block was submitted to the Environmental Protection Agency (EPA) by ExxonMobil. This has since been approved, according to EPA head, Dr. Vincent Adams.

[vraic] 30/7/2020 12:37

Apache/Total news yesterday of third oil discovery offshore Suriname also helps.

dyor

[donmac101] 29/7/2020 18:29

exxon and hess have double find on yellowtail appraisal today wednesday .it just keeps giving next up kaietuer block shortly you guys need to double down.wte will multibag for sure.

[donmac101] 11/7/2020 11:32

exxon restarts drilling in offshore hotspot.
Yahoo finance

[mick] 10/7/2020 13:23

Taken from an article on LSE chat;

ExxonMobil to move ahead with first well in Kaieteur Block
Jul 07, 2020 News 0 Comments

In spite of the logistical and economical challenges brought on by the COVID-19 pandemic, it appears ExxonMobil will still be moving ahead with plans to drill the first well in the Kaieteur Block.
Making this disclosure was Chief Executive Officer (CEO) of Hess Corporation, John Hess.
His company is one of the partners in the Kaieteur Block along with Ratio Petroleum and Cataleya Energy Corporation (CEC).
Hess disclosed that ExxonMobil, which is the operator of the block, will be drilling the first well in the second half of the year.
With respect to the prospects of success, Hess said that he is encouraged by the geology.
He highlighted that the majority of the discoveries in the Stabroek Block, which borders the Kaieteur Block, are found in the Campanian and Santonian layers.
They are 15,000 feet and 18,000 feet deep respectively. Hess said that the partners see a lot of the oil-rich sand channels flowing from the Stabroek into the Kaieteur.
“So it is highly prospective but you have to drill to see what you have,” the CEO noted.
Further to this, the Chief Executive Officer said he is confident about the possibilities for success given the technology that is available to the operator for deep water drilling.
The Tanager-1 well is expected to be the first target as it is estimated to hold 256.2 million barrels of prospective resource according to Competent Persons Report (CPR) conducted by the Netherland, Sewell & Associates Inc. (‘NSAI’).
The report also noted that the co-venturers have a 72 percent chance of success.
The Kaieteur Block is located approximately 155 miles (250 kilometers) offshore and covers 3.3 million acres (13,535 square kilometers).Three-D seismic survey was completed in 2017 on this block. Results showed that it holds a gross estimated prospective resource of 2.1 billion barrels for nine prospects.

[mick] 10/7/2020 13:15

Thanks Donmac. As I understand it WTE has a 1.6% interest in Tanager 1 via their shareholdings in Cataleya and Ratio. Exxona and Hess hold 35% and 15% respectively.

This well could take a couple of months given that the target is 8,000 metres and water depth 2,900 metres.

Exxon are also planning to drill the Bulletwood well in the Canje block in HY2. WTE holds a nearly 1% interest in Canje.

The next few months will be very interesting and potentially transformative for WTE.

[donmac101] 10/7/2020 11:50

Boys over on lse board at ECO atlantic have posted that ratio say tanager1 will spud early august.

[mr hangman] 24/6/2020 16:35

The licences in question are the ones that JHI Associates have a interest in, according to a article about 18 months ago

[euclid5] 24/6/2020 15:14

Thanks for your reply Robs

[robs12] 23/6/2020 18:55

Well, it looks probable to me that the opposition will win the election (we'll know very shortly), and they have already stated they will look at the licenses. But if they really will or not, and whether they'll make any changes, who knows. It's certainly a risk.
Both Canje and Kaieteur were awarded before any oil was discovered nearby.
I'm continuing to hold anyway, on the basis that Exxon are already 'in' to such an extent that the government would not want to stir it up too much with them.

[euclid5] 22/6/2020 20:30

taken from Lse board also - any views on this?

[plunger2] 28/5/2020 15:39

To which I would add that some of the personnel involved were associates/supporters of Cove Energy. That company was a role model for getting an optimum return from the asset before selling up for cash. If they do half as well here shareholders have plenty to lok forward to.

DYOR GLA

[robs12] 28/5/2020 14:55

Westmount holds ~ 4.8% of JHI.
JHI hold a 17.5% carried interest in the Canje Block covering over 4,800 square kilometres, offshore Guyana. This block is located adjacent to and in the same geologic basin as the Stabroek Block which has delivered sixteen substantial oil discoveries since 2015, with reported discovered recoverable resources in excess of 8 billion oil-equivalent barrels to date.
ExxonMobil is the operator of both blocks.

"The proximity to these world-class source rocks means that reservoirs on the Canje block are in direct contact with the source, and are charged through vertical migration. Effectively, Canje’s reservoirs are filled first before hydrocarbons migrate up-dip to other blocks." (JHI website)
"Canje Block is the same size and adjacent to the productive portion of the Stabroek Block operated by ExxonMobil, with recoverable reserves exceeding 4 billion barrels. Utilizing block wide 3D seismic, JHI’s technical team is working closely with ExxonMobil to select drilling locations on multiple billion-barrel prospects, each demonstrating direct hydrocarbon indicators identical to successful wells in the Stabroek Block." (JHI website)

As a result of a 2018 farm-out to Total, JHI is carried for the drilling of up to four wells and is funded for the drilling of additional wells.
It is anticipated that the first well on the Canje Block, Bulletwood-1, will be spudded in H2 2020, with the possibility of additional drilling by the end of the year.

That's about the closest I've found to any figures - multiple billion bbl prospects, same size as Stabroek which has >4bn bbls recoverable.
Though likely that JHI would sell out at some point sooner rather than later (after the 4 carried wells?), and who knows what they'd be valued at.... 4bn x 17.5% = 700mn bbls @5$ is $3.5bn. 4.8% of that (i.e to WTE) is $168m.

WTE have bought their 4.8% stake in JHI for approx $5.3m (£4.3m) (if I am interpreting the slightly obscure wording "At cost, Westmount's holding in JHI equates to approximately 38.1% of the value of Westmount's gross assets as of 31st December 2019." correctly?).

So it could be very, very good for the WTE share price if they strike...
Then there's Kaieteur next.

All assuming there's no shenanigans about the validity of the licenses by the Guyana government, though that seems unlikely given how far in Exxon are already, but you never know...

GLA

[mick] 28/5/2020 14:36

Taken from LSE Board today.

Looks like WTE is now only a few weeks away from the spudding of Tanager-1 on the Exxon operated Kaieteur block. Well is targetting 256.2 MMB P50 recoverable with an amazing 72% COS. Looks to be bang on trend with the huge number of discoveries on the adjacent Stabroek block, the most prolific oil exploration block of recent years. Through its holdings in Cataleya and Ratio Petroleum WTE has a 1.53% interest in the licence amounting to 3.9 MMB P50 net recoverable for Tanager-1.

In addition the block contains a further 1.86 billion barrels in 8 targets giving a total of 31.9 MMB P50 net to WTE on block including the tantalising Toucan prospect with 702.7 MMB P50 net recoverable at a whopping 56% COS.



WTE also has a 0.84% interest in the Exxon operated Canje block, also adjacent to the prolific Stabroek block, through its holding in JHI Associates. Several targets have been identified for drilling including Bulletwood-1, Jabillo-1 and Sapote-1. I have not seen and resource figures, but imagine they will be of similar size and COS to those on Kaieteur.

WTE also has a 0.12% interest in the Tullow operated Orinduik block, also adjacent to Stabroek, through its holding in ECO Atlantic. Further major exploration drilling is anticipated for 2021 targetting around a billion barrels.

Prior to the virus outbreak Exxon was planning to drill a total of 6 wells on Kaieteur and Canjie over the net few months all at zero cost to WTE. Exxon is currently still going ahead with Tanager-1 which is expected to spud next month. If all seven wells (Kaieteur 3, Canje 3, Orinduik 1) are drilled as originally planned that should amounts to around 30 MMB P50 net recoverable to WTE, with further upside in additional targets. Six of the wells are Exxon operated, many have a high COS and all are on trend with the prolific Stabroek block.

The current NAV of its block interests is around 10p per share, which underpins 2/3 of the current market cap of only £17M. The shares are also thinly traded so any interest in the shares will lead to a very rapid increase in share price especially with the first well coming in at 72% COS! Given all of this I expect WTE will perform extremely well indeed in the days and weeks ahead.

STRONG BUY