Try,
Of course you seem to be “up in arms”. You were threatening to take the company’s management to court yesterday….lol.
Now, briefly as a response to your other points;
1) - Analysis using in 2003 SW is hardly as up to date or as precise as work done in late 2008 with the latest SW tools. Granted WG measures volume, NSAI measures risk in extracting this volume. But it does not measure risk in isolation.
I have already told you the difference the two studies have in the real world. The volumetric approach of WG was useful in establishing the existence of abundant hydrocarbon resources. NSAI’s approach builds on that and provides a tangible measure of the risk involved and the consequent volumes likely to be extracted (under 3 different scenarios).
But all this is meaningless in the investing world. What little does counts - prior to actual drilling which the mother of all proof – is what benchmark status auditors such as NSAI say is the case down there ( broken down as per the three scenario contingencies). (And as I am sure you know, NSAI also audits tested discoveries, providing the necessary reliable third party testimony). Everything else, at least in marketing one’s assets, is just plain window dressing, as all serious investors well know.
2)- I, like you, have the greatest of respect for Addax and its team. However, your following points are not quite correct;
“CEO calls Addax's deep water portfolio (which is a mirror of our own) "world class" every time he mentions the JDZ”.
Indeed he did so in the past, but as of the last two presentations he has downgraded those comments with words to the effect that the portfolio (and don’t forget that it includes OPL 291) would enhance AXC’s reserve basis. Hardly of the same impact.
“Jeff Schrull, the head of Addax exploration who joined Addax after drilling OBO-1 for Chevron , called the JDZ a "company maker" on several different occasions.”
Again correct historically. Those were 2007 comments. But I don’t recall any statements since then. Indeed at the September 2008 London conference, when pressed about the ROO, he simply responded that we would get it whenever we got it and that was the endo of it. Nothing…..on the importance of the JDZ, although it would have been a most opportune time to say something. Indeed, attention soon turned and focused on Tac Tac in Iraq. THAT was deemed as company maker.
3) - Addax issued the NSAI report and in most people’s minds it expects to find a very substantial amount of hydrocarbons on the JDZ (mostly oil). Indeed its share of the unrisked (mean/best estimate) amount exceeds 800Mmbls. IF such is discovered, that would most definitely be reserve enhancing. I am not that certain however, given the immense expense production capacity build would require (unlike TacTac) if the company maker claim would be seen as anything other than marketing spin .
That’s it for posting from me today.
spp119
AI
