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Sorry to say it, but after being associated with Gulfslope for almost ten years, starting with the first day we started work in Houston, I have given up. It is clear to me that the company has no plan and no backers. I still think John Seitz had a great idea, his vision was clear. But business-wise, he made too many bad decisions. Tau was so very close to being a big discovery, it is just heartbreaking. If they could have kept going for just another few hundred feet, we would all be congratulating ourselves on picking a big winner against the odds. But I think it’s over. I have started liquidating my position, and it’s a few million shares. So expect to see the price take a hit. Sorry about that.
It’s been an interesting ride, and it had its exciting moments. Good luck to those of you who are still hanging in.
So what is $114 in Rubles?
Now would be a great time for somebody at Gulfslope to let us know how, if at all, they are tied in to this new company. And whether any of the capital Cenaq raised will be going into exploration prospects. Sounds like they are mostliy going to try to pick up oil production on the cheap from “ distressed” companies that are “over leveraged”. The fact that John and Connelly have been friends forever and Connelly was one of the original investors in Gulfslope, and that they mention Gulfslope in this PR is all encouraging. But as far as how it affects Tau we haven’t a clue. Once again I feel encouraged, but left in the dark. I have to believe that the news that Maleska said was coming soon has something to do with Cenaq. The last time I was in the Gulfslope office (late 2020) I had a discussion with Clint Moore where he mentioned that Connelly was going to get another company going. So I have to think that Seitz isinvolved in some way. Very interesting, but just another tease. No solid information.
Maybe we should just start shamelessly pumping the stock like WallStreetBets with Gamestop.
So was Maleska’s statement that we would be hearing from Gulfslope soon just a mis-statement? Why are we waiting on management once again to decide to give their stockholders some idea of their plans for the company? After all as share owners we have a stake in the company and deserve to know what they are doing to make money for us. Would it be that hard to say “we’re talking to potential partners, we will try to drill this year, Delek are still on board”? But their loyal stockholders (us) who have hung in through thick and thin get bupkis. I do not understand it, unless they just don’t care, and never think about us. That would not be politic or good business practice. Malpractice, in my opinion. Come on, just give us the outline so we don’t feel like fools who wasted money on this investment. I am tired of knowing nothing.
Your list of blocks is discouraging, because Gulfslope has apparently dumped Corvette. And another block in that area that they picked up just two or three lease sales ago. We are well and truly just a single prospect away from oblivion. Might as well rename the company Tau Oil and Gas.
I have toyed with the idea of getting a group of investors together and trying to put a bid in on the Corvette block. You could do it just on the basis of the shallow Anadarko discovery, and then move on to getting the necessary data to drill the huge deep structure. Stay tuned.
It was a really quick and dirty extended DST. Not really a completion - just a look to see if there was a viable reservoir that could produce. There was a second DST on another interval that watered out after a short time.
That’s us - jus’ the facs, jack.
It’s on the Corvette lease which I think they still control. I re-worked it as part of my evaluation of Corvette as I was being ushered out the door. It has zero risk, because Anadarko produced oil from it for less than a day before the reservoir sanded up. But it isn’t a conventional discovery, since the pay sits under a salt overhang. We tried to sell it but got no interest. As with the main body of Corvette, the problem is that data quality is not good enough, and companies see it as something that Anadarko abandoned, so why should they develop it. When I designed the wellbores for Corvette I tried to hit the Anadarko pay on the way down to the big accumulation, because why not. Don’t know what the new team has in mind for it. I am pretty sure it will still be un-drilled when oil exploration goes the way of the dodo.
Regarding John Seitz - There is no doubt that without him Gulfslope would never have existed. It is his concept, his vision, his obsession. At this point I doubt the company would survive if he wasn’t leading it. The fundamental play concept has not been proven faulty - I truly believe that the Tau well was a whisker away from finding a huge oil deposit when it failed. So I believe that John has always been right on target. But unfortunately he hasn’t been able, with the exception of Delek, to convince the right people. It’s enough to drive me nuts. I can’t imagine how it must be for Mr. Seitz. Nobody would have blamed him if he just gave up. But he is apparently still fighting to prove his vision. If there is any justice, somebody will step up and make Tau-2 a reality. And I am convinced it will be successful.
Regarding succession - John does have a grown son who is, I believe, a petroleum engineer. I met him a few years ago when he asked me to help him with a problem that his employer had run into. He seems sharp, based on a few hours of contact. I have no idea if he is in any way interested in continuing in his father’s footsteps. It is at least a possibility. If Gulfslope does find a field or two, I imagine he would be involved. But who can say.
If you are an oil company, you need to have reserves and produce them. The best way to get oil is to find/develop your own fields. You can also buy oil production, but decades of experience show that that is just a way to go broke slowly. I know that Gulfslope would dearly love to have income every month from selling oil reserves. I know they have been looking at buying fields, and have made offers, but nothing has come of it. So their only alternative is drilling. As you say it isn’t good to have only one option, but that’s where we are. If Gulfslope doesn’t drill a successful exploration well soon, there will be no future for the company.
$112 oil certainly will have Tesla turning cartwheels. OPEC is playing a fool’s game.
Different structure, entirely. Same target section.
I have no particular insight any more. I can say that the fact that John Malanga says they are still fighting to get something going is very good. I half expected that they had given up.
Hope they were worth the time. If we actually do get the word that Tau-2 is a go, then I will be back to keep everybody up to speed. Frankly I was getting discouraged enough that I was seriously thinking of selling out.
I was involved in the design of the wellbore for Tau-2 just before the new team was hired and all of us originals were let go. So I don’t know what the final wellbore plan was, but it could very well be with a different tophole or bottomhole location. The only thing we can say for sure is the bottomhole will certainly be in a block that Gulfslope has leased. The Tau-2 structure is long and skinny and oriented roughly north-south. Since an OCS block is 3 miles square, there is a lot of territory where the feature could be drilled and end in the Gulfslope block. The good news is they will have a lot of leeway to avoid the shallow section “gumbo” zone which caused most of the Tau-1 problems. They will also certainly have the special drilling package for handling high-pressure, soft-rock conditions. If they don’t, it will be deja-vu all over again.
I would like to provide some info on Tau-1 and what to expect in Tau-2, but I am a little busy at the moment. Will jump in with a long post when I get some time. In the meantime, everyone review my past posts and be ready to answer questions (kidding).
The road to oblivion is paved with “intentions” to drill.
Holding the blocks requires paying rentals every year, so that might be the largest expense they have these days. Other than that, it’s just the one CFO salary. Since the blocks cost money, your point is well taken. Dropping the blocks would save money they need to hoard just to stay alive. So spending to keep the blocks is significant.
A lot of smaller GoM operators are reluctant to farm in to prospects developed by other operators. They have a limited number of wells they can drill every year, and prefer to drill their own stuff, which meets their own standards for “drillable”, rather than partnering. GulfSlope has had a big problem with getting over that hurdle, since their prospect inventory is relatively poorly imaged, and is perceived to be high risk. W/T Offshore is very risk averse, from top management on down. When they had proven that Mahogany was a very viable field, they were hesitant to push the field deeper, even though every deeper well ended up being the best in the field. So they are not a natural fit for Tau because it would not clear their risk hurdle. GulfSlope has presented their prospects to pretty close to every oil company in the world, and Delek is the only one that had the courage and foresight to drill one of them. It is just tragic that Tau was screwed up, because it just reinforces every oil company’s belief that Gulfslope’s inventory is never going to work. About the only believers left are on this board.
No, I was responding to the statement in the latest filing. That 2020 APD filing never got into the government system, probably because they were shut down for Covid. I could be wrong but it looks like they are starting over. Which makes sense, because without any operations, they wouldn’t be able to hold a drilling rig slot for two years.
Just a reminder that GulfSlope wouldn’t have filed an application to drill if they didn’t have the name and specifications for the rig that would drill the well. Without the rig info., the application would be summarily rejected. Looks like the undisclosed operator for the Valaris rig could very well be GulfSlope. If so, why keep plans under wraps? Gulfslope’s abuse of their shareholders is approaching legendary. We haven’t had any guidance as far as the status of the company that we have all invested in for almost two years now. I call that ridiculous.
All I want for Christmas is some positive news from GSPE. Some assurance that our favorite oil company is still a going concern. I don’t think it’s asking too much.
Drilling the first well I believe would have extended the lease term beyond the normal expiration. So the fuse may not be as short as it looks. If Clint was still with us he would be able to give us all of the details on that. He was a wizard with that kind of thing. But…… Hopefully the annual report will give us some hint - at least that GulfSlope is planning another well if possible. It’s nuts to not even know that much.
Yeah, when Clint was putting that slide together he asked me what we should use as an analogue. Thunder Horse is the classic deep water “turtle structure”, which is another way of saying “inverted basin”. So I told him to use Thunder Horse. Geologically they are very similar. Thunder Horse just happens to be 3 or 4 times the area. So Corvette in the very best case of everything working right might be a quarter the size of Thunder Horse. Which ain’t bad. At that time we were pushing the upper Miocene, which is where Anadarko found the shallow pay zones, and then throwing in the deeper stuff as a bonus. But the deeper stuff is where the prospect really lies.
I was at BP working the GoM when a couple of my colleagues were doing the initial prospect mapping on a big structure called “Crazy Horse”. At that time all of the BP prospects were named after rock groups. When Crazy Horse was discovered and it was clear it was humongous, BP understandably got out a lot of publicity on it. A couple years later BP heard from the Lakota Sioux tribe, complaining about the disrespect shown to their chief by naming an oil field after him. BP caved and changed the name. They came up with Thunder Horse which was met with wide ridicule in the oil industry because it is not a real thing, and it sounds weird. BP was just trying to avoid a lawsuit and did the best they could. There are always fun things like that going on in the oil industry. It was a hoot being an oil exploration guy. I miss it.
There have been recent spec. acquisition projects on the shelf that should be all that is required for Corvette. When I was working up the prospect in 2019 - 2020, we did reprocessing of 1990’s vintage data. It was improved, but not enough to convince any company to drill. The reason we reprocessed is that the new acquisition didn’t come far enough up onto the shelf to cover Corvette. Since then I have lost touch with the seismic industry, so I don’t know if that is still the case, or if another new survey did provide the necessary data. Interesting question. In terms of Corvette analogues, any of the deep water, middle and lower Miocene fields would be a good comparison. The geology is very much the same. Only the present-day water depth is different.
Couple of thoughts. Mrs. Smith is correct that big companies only sell off production when it is too much of a pain to continue with it, and they already have gotten the low-hanging and medium-hanging fruit. All fields require greater or lesser degrees of attention. That means cash for recompletions and such, as well as dedicated time from engineers and geos. So even though you are producing revenue every day from the field, if you aren’t careful you end up having the field eat your bottom line alive. It was an accepted fact, among every geo and engineer that I worked with, that the way to make money in the oil business is to find oil. Buying oil was always seen as an act of someone who didn’t have any idea what the business was about. The mantra was “Find an oil field, get rich. Buy an oil field, go broke”. I don’t know of any production purchases that worked out over the long haul. There may have been some. But the companies that I worked for, including several majors, wouldn’t touch a field acquisition with a ten foot pole.
The other thing is, on Corvette, the data quality is not as good as it is at Tau. So it is an even tougher sell than Tau. It is entirely possible that getting Corvette to drill-ready would require new acquisition of seismic data. That means you have to find potential partners that are willing to spend millions up front ,and only then would know what they had. I am convinced that Corvette is a world-class prospect, and deserves to be tested. But I am a wildcatter, and investors are skeptics .Doing Corvette probably is only possible if Tau is a big success. In which case getting partners would be very much less of an issue.
For what it’s worth, I had a conversation with Clint Moore shortly before his untimely death, and we were discussing the possibility of Tau-2, and how it would work. Clint remarked that Delek were still positive about Tau’s potential, but their management didn’t want to be exposed to the kind of cost overrun that happened with Tau-1, so were really not wanting to proceed with just GulfSlope. But the thing I remember, and this is second hand from Clint, is that Delek had indicated that if finding another partner turned out to be impossible, they would drill a second well anyway, rather than let the prospect leases expire. That was one point in time, and a lot has happened since then. But the post drill analysis by the reservoir engineering firm had impressed them, and they didn’t want to let a potential several hundred million barrel field get away without trying to save it. I don’t know how accurately that represented Derek’s true view at that time, but Clint seemed to think they would step up if push came to shove. And that and $5.00will buy you a cup of coffee.
I know former GulfSlope employees, guys I worked with, that have told me that it’s all over, that GulfSlope is history. I took that as just cynicism, and have maintained my hope that something continues on. I haven’t spoken to anyone directly involved with GulfSlope in over a year, so I really don’t have any current information. The fact that the leases are still in Gulfslope’s name is probably the most positive sign. You have to pay rentals on those every year, and they aren’t cheap. If the company was truly defunct, I would expect them to drop the leases, and that hasn’t happened. So I still hold my stock and wait for word on upcoming plans like everyone else.
Tau-1, if it had at least provided good evidence of a thick, good-quality sand or two, would have been a success, even without being a discovery. It would have eliminated the risk that keeps most companies from drilling deep, subsalt wells on the shelf ie. the apparent lack of reservoir. But that is all over now. As someone who saw the data coming up from the drill-string instruments on the Tau well, I have no doubt that there will be a ton of reservoir there if they drill another well and keep it under control. Whether it is the M3 sand or something else, is really irrelevant. Those names are just a convenience so everyone knows what is being talked about. I know that John Seitz was really floored by what happened with Tau, because if they just could have kept drilling for another day or two, the critical evidence of the worth of the GulfSlope play concept would have been there for all to see. I believe there actually was enough evidence collected, especially at the very bottom of the hole, to provide strong reasons to drill again. But I’m not the one they have to convince, and the people with money apparently don’t see what I see. And here we are. It is entirety possible that the GulfSlope play oil, which amounts to billions of barrels, will stay in the ground forever, because a bunch of people with a misguided prejudice are afraid to take a chance.
Sorry, I sort of went off at a tangent there. I think what you wanted to know is how many reservoirs might be penetrated by a well. The answer is a number of them, and they will keep coming to whatever depth anyone is able to get. Enough reservoirs is not a problem.
Thanks for asking. It would take some work to get the information you’re after, and I don’t really have any means any more to do that work. I had access to all of the GulfSlope seismic data until November, 2020. At that point Seitz decided to bring in a new team of geoscientists, and my access disappeared. What I can tell you is the targets - base salt, M1 sand and so on are estimates, not hard facts. They are usually based on events in the seismic that may or may not be tied to well data. They are useful to give an idea of the topography of the rocks in the prospect. They may not have any geologic “truth”. For the most part they serve as “markers” to follow through the data, and provide mapping surfaces. It really is very complicated, which is why people like me were paid big bucks to work for oil companies. I can’t really help you with your question, but I believe I know what you are getting at. We observed in Mahogany field that the number, quality and thickness of sands increases with depth below the surface in that field. It isn’t a subtle difference - it improves dramatic as you drill deeper and deeper. There is reason to believe that the same would be true of Tau. And the Tau-1 well was suggesting that - there was getting to be more and better sand as the well went down. I have no idea what the Tau M3 sand might be. And it really doesn’t matter. It was listed as a well event that would occur near that depth in the prognosis for Tau-1, but it was really just a mapping horizon which was loosely tied to well data in the area. As such it probably is near the bottom of the upper Miocene. That is where you begin to get really good sands in a lot of the offshore fields. Getting into the Middle Miocene would give you the mother lode. But that is a very deep and expensive well, and would have to wait on a second or third well.The important point is that a lot of companies do not recognize the presence of good quality reservoirs in the Miocene on the shelf. Mahogany clearly contradicts that. But managers especially get pretty locked in on certain “truths” at which point they won’t consider other possibilities. That is what GulfSlope is fighting, and why the failure of the Tau-1 well was so devastating. - Continued in another reply-
In terms of shallow prospectivity, at Corvette, there are a number of above salt amplitude-supported traps, similar to Canoe, which appear to be economic. There isn’t anything to speak of at Tau. The shallow oil that Rooster produced in VR376, next door to Corvette, is now depleted and I believe that GulfSlope now controls the facility on that block. It is possible that one of the undrilled fault traps near the Rooster rig could be exploited at minimal cost. But I think GulfSlope is focused on Tau, at this point, and shallow oil at Corvette is not anything that Seitz is interested in pursuing. The shallow oil trap that Anadarko found in the 1990’s is still there and available. It is in the uppermost Miocene, and under the edge of the salt. So it is much younger than the target of the main GulfSlope fairway, but much older than the the usual shallow pays on the shelf. So it is a bit of an ugly duckling, and has no natural partner among the shelf explorers.
As far as potential partners putting in money to get the information - this is done rather often, and is referred to as a “bottom hole contribution”. At this point GulfSlope/Delek probably would listen to any proposal that brought in funding. But I think they would probably limit it to participation in the prospects. Anything short of that would just cause potential complications without helping significantly with the well costs.
It’s rather involved. If a potential partner was serious they would approach GulfSlope and Delek and get a show of basically everything that is known about the play fairway and Tau specifically. They would have to sign a confidentiality agreement, part of which would constrain them from leasing acreage in the Tau area without offering it to GulfSlope. If you divulge hard won and expensive information to potential competitors you protect yourself. A new group could independently come up with the subsalt play concept and pursue it without involving the Tau partners, but it would save them a ton of time and effort to talk to the guys who have been working it for nearly ten years and have the latest well information. There are companies that have the wherewithal to work up separate features in the area, and lease them.But I think if they did that they would recognize that Tau and Corvette are the sort of thing they are looking for, and they would find it easy and reasonable to join the Tau partners to jumpstart their own efforts. At this point the key blocks on those two prospects are leased by the Tau partners, and another party couldn’t lease their way in. So if they recognize the play, they will almost certainly talk to GulfSlope/Delek about participating. I will continue this below.
The only things of possible interest in the lease sale was four blocks that are midway between Corvette and Tau in the GulfSlope focus trend. These blocks all had multiple bids, which was highly unusual and significant. I have no seismic data anymore to check out what they might have been after. Any blocks on the shelf could have shallow potential, so that might have been what got everyone excited. But if there is a subsalt structure there, it would be positive for the GulfSlope play concept. Any drilling or discovery along the GulfSlope play trend is almost as good as a GulfSlope well, in terms of the share price. So I hope these contested blocks are a sign of interest in the GulfSlope play.
I agree. A rig contract would be the most important development for Gulfslope’s continued viability. Without drilling, GulfSlope is going to wither way. A rig contract says loud and clear that they intend to stay around. And it will, thus, greatly impact the SP. They have no choice but to announce it.
Too short a time period to be an exploration well. I would imagine it’s a work over on an existing producer, or a completion/recompletion.
The drilling depth will be determined by money in the end. If Delek and GulfSlope are in along with another small O&G company, they won’t have the budget to go very deep. If the third partner is a deep-pockets, aggressive company that wants to hit a grand slam, they could design and drill a really deep well, but that would be really expensive. The indications are that the targets get thicker and better quality as you go deeper (based on Mahogany Field) so deeper definitely is better. But it also gets more dangerous as you go really deep. I think the Tau-2 well will not be really ambitious. They will just try to get real, hard support for the existence of a viable field, then cut things off and consolidate and announce a discovery. The leases will be held, and the deep targets will still be there, but it will be necessary to regroup and see how the well results confirm or modify the geologic picture. The third well could be a very deep well to try to confirm the existence of a giant field, and a limit to the depth of pay.
Yes, they will have pressure measurements constantly while drilling. When drilling in the GoM that is about 90% of the effort, because drilling the rock to create the wellbore is actually very easy. You just have to avoid the bad (over)pressure and then everything goes quickly and easily. GulfSlope will use the pressure profile from Tau-1 to guide them, since that will be pretty close to what they will see in the second well. As far as how deep they will drill - there are actually viable targets to well below 30000 feet. But those are not reachable without a different rig and well plan. The #2 well will go beyond the depth of the #1, maybe a couple of thousand feet. If they log enough pay in the bottom of the hole to have a reasonable chance of an economic deposit, they will stop and start planning how to appraise the discovery. They will also use the data from the well to redo all of the reserve estimates, and refine the structure maps and so on.
Hoodoo that voodoo that yoo do so well