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One of the big reasons the Tau-1 well had so much trouble was that the rig had inappropriate equipment to handle the conditions they encountered. Presumably with Tau-2 they will remedy that. Could explain moving equipment from another rig to the Gulfslope rig.
It’s really good to see things starting to move ahead, and the investor community paying attention. Maybe this will be the year we all get paid.
Last two days have been good volume and almost 100% on the buy side. A good omen, I hope. It’s what we want to see for sure. We were on track to hit .01 next week. So we need this to be the bottom.
My ears were burning, so I had to check the board. Appreciate the kind words.
I think we are the two most dedicated Gulfslope enthusiasts. Which is not an easy thing to be. I have actually owned the stock since September of 2013. I bought in to the initial Family and Friends private offering, and have been accumulating ever since. If Tau-2 is a discovery in a few months, owning Gspe will be a ton of fun. Will be worth the wait and the pain.
Already purchased my million shares a week ago. I’m ready to go when they are.
The EP is pretty much a boilerplate document with few specifics. About 90% of it is a description of how Gulfslope will handle a spill or other potentially environmentally damaging event. This is the same from one EP to the next, since the same assets would be used to handle any environmental emergency at any of Gulfslope’s wells. There isn’t any reason for the BSEE to keep an EP confidential, since it contains very little in the way of maps, seismic data or other proprietary information.
The APD, or Application for Permission to Drill, is another story. It contains details of the prospect that are confidential and often proprietary seismic data which only Gulfslope has access to. It will also have details of the well targets, casing design, expected mud weights, drilling timeline and expected operations. This is very specific to just one prospect, and is much harder to put together. I hope to see one of these first days that the APD has been received by the government. There is no reason to expect any problems with approval since Tau-2 is a near repeat of Tau-1. Once the approval is in place it is only a matter of getting partners sewn up and signing all of the papers and they will be on their way.
Just checked BOEM - still no application received from Gulfslope for anything. This despite a clear statement in the last 10q that the government had the application and was processing it. The 10q is the official word of a company, but apparently when they use the form that is designed to report relevant information, Gulfslope fails to give us anything but false hope. I won’t sell my shares, but this is so discouraging. I don’t think the company is anywhere near getting the financial support they think they need to move forward to drilling. But they have insurance money to drill anytime they want, and a rig on standby. Oh, wait, they don’t have a drilling permit. Or apparently an application for one. Huh?
Why not just get started and sort out the financing along the way? Let’s go. I’m so tired of watching the SP doing its Titanic imitation. Blub blub blub.
The 10q does state that the APD for Tau-2 has been received by the BOEM, and is being evaluated. I just checked the BOEM website and the last thing listed for Gulfslope is a revised sidetrack approval from May, 2019. So if BOEM has received anything from Gulfslope recently, they aren’t saying.
I also picked up from the 10q that a lot of the money that came from the insurance has been used, or will be, for outstanding obligations left over from Tau-1. So they may show $3.77 million in cash, but a lot of that looks to be destined for unpaid bills.
The revised total depth for Tau-2 is much more realistic than the Tau-1 total projected depth of over 29000 feet. It tells me that they see things in the geology that look interesting to almost 30000 feet, but they realize now that it is unrealistic to get to any targets below 21000. So they will drill the extra 5000 feet below where Tau-1 got stuck, and if they prove up any pay zones, prove the HC trap is there, they can go deeper at their leisure. One step at a time. The oil isn’t going anywhere.
When this stock hits $.01, I guess it will be the very epitome of a penny stock! When and if it does hit a penny, I plan to buy a million shares. It will only cost me $10000, and it could eventually pay for my 42 foot ocean-going yacht (Dufour 460 Grand).
But seriously, this is getting ludicrous. I can’t believe Gulfslope will sit by and let their market value go to zero without even attempting to defend the stock. All it would take is a PR reiterating the drilling plan and the follow-on opportunity at Anadarko/Corvette, and giving us some idea of what is currently happening. This complete unending silence is deadly. I can’t believe they are going to leave the believers in the Gulfslope story to just twist slowly in the wind. If they don’t do something soon, that’s where we’ll be.
As I understand it, if Gulfslope isn’t ready to take the rig it can be leased to other parties. But as you suggested, there are no other parties interested in a jack-up, because the shallow shelf is completely mature, and Gulfslope is the only shelf subsalt player. Only thing might be happening is somebody needs a rig for a re-completion or decomission project for a few weeks. Regardless, when Gulfslope is ready, they will get first dibs, since Tau-2 will be a big, lucrative well, relatively speaking.
I think you nailed it on what is holding things up. Nobody has money, so nobody is exploring, and finding money for Corvette is nearly impossible. Some shale player money might be on the way, but competition for it will be fierce. Wish they could get moving on Tau-2, but still no permit. At this rate, Corvette/Anadarko might never happen.
Probably not. Tau-2 has priority on the large Valeris rig. To drill another well at the same time Gulfslope would have to contract another rig. There aren’t that many rigs that can work in the Corvette water depth. Rig availability would depend on whether they drill the shallow Anadarko appraisal well or something into the deep Corvette prospect. They would also have to have funding for both wells and enough drilling supervisors to handle two wells. Not likely. They could be driven to that if BSEE refuses to extend the Corvette lease. Most likely Gulfslope will tell the government “hey, we’re drilling here, and we’re pretty much the only thing going, so cut us some slack and we promise to get Corvette drilled”. They could also argue that they need the Valeris rig for Corvette, so it will have to wait until Tau-2 is finished. Don’t know if that would be enough to hold the prospect.
I am an expert, and you got it just right. There are differences, I’m sure, but the whole point of Gulfslope has been to find a Thunderhorse on the shelf. If they have, the economic value will be extraordinary.
I have no idea what is going on with the permit. The only thing I can imagine is they are waiting to flange up a partnership agreement and they want to let the new partner have a say in how the well is drilled. It has been months since they announced that they and Delek were working on the Tau-2 plan, but they haven’t even sent in a permit application yet. I don’t know, but it is more apparent floundering. Not too impressive.
I am sure that the Gulfslope drillers/engineers have talked with people that have drilled wells with the same conditions in roughly the same area as Tau. So hopefully they have been told how to avoid the problems that plagued Tau-1. There is no guarantee that they won’t have similar problems, I just think they won’t make the same mistakes twice. I expect a much smoother process on Tau-2. Hope I’m right.
Gulfslope is well aware that they should be listed on the Nasdaq, rather than the pink sheet exchange. And once the share price and company value meet the Nasdaq conditions I’m sure they will move. But right now they are seen as basically a stock scam/worthless penny stock and nobody wants to touch them. I can’t sell most of my shares because Fidelity won’t let me put them in my account. The only solution is for Gulfslope to prove they are a real entity by finding an oil field. That will take care of a lot of problems
It continues to amaze that there can be a large number of shares bought, in the millions, and the SP response is to go down. Today - 1.71 million shares bought, virtually no selling, SP goes down 2.6%. Counterintuitive to say the least.
I am glad that the short sellers seem to be elsewhere. They probably reason that there isn’t enough downside left here to make it worth their while.
Don’t get ahead of the game. The government website doesn’t show a Gulfslope application for permission to drill, let alone approval. No permit, no drilling, even if everything else is in place. I agree they are anxious to get going, but I think late in March is realistic. The good news is that once they do start drilling, we won’t have to wait long to get results. Plus, judging from the last drilling campaign (Canoe, Tau-1) the share price should move up once drilling starts. It’s all up from here, IMHO.
I expect you’re right. I hope the new NSAI report is tallying up how much recoverable oil reserves have been found by Tau-2. That will be fun to read.
I wish I could get everyone interested into a conference room with a whiteboard for an hour and talk about Tau, and Gulfslope. I think I could clear everything up, and it wouldn’t be highly technical. I hesitate to go into too much detail here because my posts are already too long.
I would agree that Gulfslope has some good people, and is capable of proving up their inventory if they can find some funding. I would actually categorize the portfolio as having above average size potential. Exploration companies have a phobia of coming off as too optimistic, so they tend to err on the negative side. The shelf subsalt fairway has all of the elements necessary to develop very large deposits. It has been dinged for not having any reservoir by a lot of companies, but Mahogany field and apparently Tau-1 both refute that prejudice. Oil source presence and maturity are well demonstrated by Mahogany and Teak fields among others. I firmly believe Tau-2 will get drilled and then we’ll know a lot more.
I would caution everyone that typically a large field in the GOM subsalt takes 3 years from discovery to first production. So taking the long view is wise.
I have worked for 45 years as an exploration geoscientist for both major and independent oil companies, including 20 years in the GOM. It would take a book to explain all of the things that I know happened at Tau-1 from their published information and from my experience with many similar exploration wells. Let me summarize the important points:
There were no reservoir sands which indicated that they had producible hydrocarbons trapped in them. If there had been, Gulfslope would have put the proof from logs, shows and samples front and center on the website, and would have announced that Tau was a discovery of an unknown size. There were plentiful indications of high-pressure methane and salt water, but no oil or condensate indications. The fluid inclusion analysis I would discount. It is an exotic method not ordinarily used and would have to be considered very poor evidence of oil migration in the absence of any more obvious indicators.
The bottom line is that there were good indications of reservoir sandstones in Tau that were both thicker and of better quality than expected pre-drill. However, all indications are that these reservoirs were wet. Personally I find the results of the Tau-1 to be quite encouraging. Getting ggod reservoir sands was a big step forward. It is common in subsalt fields to have wet sands on top of deeper hydrocarbon sands. The fact that Gulfslope gets a nearly free second shot at drilling an exploration well due to the insurance settlementi isis a very nice thing. I havecontinued to buy the stock and still consider Gulfslope a unique opportunity for a potentially huge return.
Can anyone with more market technical knowledge clarify what asset value has to do with share price? If Tau gives Gulfslope an asset worth over a billion dollars, and they have other similar prospects, then their assets would amount to over a dollar a share. Would that justify a SP over a dollar? Or are their assets irrelevant and it’s all about earnings? Or something else?
I heard that since Gulfslope isn’t ready yet the rig will be doing one or maybe two short development or workover jobs. Doesn’t mean Gulfslope loses it’s slot - that will still have priority when they get their permit and partnership sorted out.
You are so right. Today’s gyrations involved a grand total of just over $7000. Imagine what would happen if Tau was a major discovery and hundreds of thousands of dollars started coming in. As you have so clearly pointed out this a company with a potential value in the billions trading in pennies. It is a completely ridiculous circumstance, and it can’t last. Either Gulfslope will go completely bust, and a few of us will lose a few thousand dollars. Or they will find a large oil field (all of their prospects are large) and a few of us will get a huge payday. Like somebody on here said, it’s like the lottery, only the chance of winning is more like 50/50, instead of one in several million. As long as I can get chances on this potential payday for a few pennies a share, I am going to keep buying. A lot. 1000000 shares for $20000! It just blows me away. IMHO, it’s a steal.
I pointed this out in my January 6th post. Thanks for providing all the details. Definitely a positive development for Gulfslope. I doibt if there is another play anywhere in the world that has better economics than the GoM shelf at this point.
True insiders are prohibited from buying through the market if they are privy to non-public information. Don’t know if that applies to options.
Because Tau-2 will be a new/replacement well for the Tau-1 with different parameters, it will have to be re-permitted. That means preparing all of the detailed displays just as if it was a wildcat and getting them filed with the government. There isn’t anything on the BOEM website about a permit application, so that apparently still has to be done. Gulfslope has to work with Delek on the well plan. And Delek and the insurance company are both going to want to hear how Gulfslope plans to prevent the second well from having the same problems as Tau-1. It must be a complicated process keeping everyone happy and on board with Gulfslope’s plan. Could take a while.
I have been hearing that a number of big players in the onshore tight shale play are selling their wells and acreage to big outfits like Chesapeake and cashing in “early”. This leaves them with big piles of cash and they are looking for nice profitable places to put it. Wouldn’t be surprised if some of them look at GOM shelf opportunities, especially drill-ready prospects. Seems like the stars are aligning for exactly the play that Gulfslope dominates and has the most recent deep drilling on. If Tau-2 is successful everybody will want to talk to Gulfslope. IMO.
BOEM announced today that there will be additional incentives to produce remaining oil in places where Gulf of Mexico infrastructure exists. Government is concerned that pipelines and platforms on the shelf will be removed before all of the reserves are gathered up. This is exactly in line with Gulfslope’s philosophy of saying there are still big fields in the shallow water. This could encourage more investors to get involved because the economic terms just got even better. It basically means you get to keep more of what you find. Very good news.
I appreciate the positive thoughts, and I’m sure Delek will be involved in the Tau-2 well. However, they are not going to pay more than 75% of the exploration extension cost. Texas South is gone, so Gulfslope is now responsible for 25%. Don’t have any idea what extending the well will cost, but clearly Gulfslope will potentially face a bill for millions of dollars. IMO they have two tough tasks. They have to get Delek to put in writing how far they are willing to drill while paying 75% of the cost. And they have to find some party to pay the bulk of their 25% while keeping a meaningful percentage of Tau. There is a saying in the oil exploration game that all is forgiven if you find pay. All Gulfslope has to do is get the money together to drill another 1000 or 2000 feet and find a pay zone or two. At that point they should have enough credibility to bring in a flock of investors and money won’t be much of a problem. Success seems to be in sight, but getting there is still a challenge.
We have no idea what sort of participation Delek will have in Tau-2. Both partners will be carried down to 15254 feet. But in order to prove the prospect and get an idea of how big it might be, the well needs to go much deeper. That deeper section of Tau-2 will be paid for by the partners. I doubt if Delek will be paying the 90% that was part of the agreement for Tau-1. Certainly they will be watching everything very closely below 15254, and if it is still wet sands they will probably bail sooner, rather than later. Gulfslope on the other hand really needs to make Tau work, so will keep going as deep as possible. My best guess is that Gulfslope will use the fact that they have a free well to entice a new partner with a low-cost, low-risk extension of a well which already has proven sand and hydrocarbon presence. Their goal will be to get this new partner to pay most of the cost of deepening the well in exchange for a chance to own part of a potentially huge field. I hope that works out for them, and they get pretty much a free ride without giving up too much interest in the prospect.
Delek probably didn’t pay 90% of the Tau-1 drilling costs. The usual agreement is that the operator estimates the drilling cost for the well, and the partner agrees to pay x% of the costs up to the estimate. If the well exceeds the estimate by some percent then this all changes. Tau-1 greatly exceeded the Gulfslope estimate, so some form of adjustment was probably made. It’s basically a penalty for the operator screwing up and sticking the partner with unanticipated charges. Obviously we don’t know how that worked out. Suffice it to say that Delek probably ended up paying less than 90%, and Gulfslope ended up paying more. I am curious if the drilling insurance paid the partners based on their relative contribution. If so, then Gulfslope would get a higher settlement than 10%. Wish they were more forthcoming about all this, but I guess it’s their private business.
It could indeed be busy. Gulfslope has the insurance money for Tau #2, and the rig on standby, so that is most likely first up. I would guess a spud date on that in the first quarter. Then they will have to do something about their deal with the government to get production started at Corvette (accessing the oil that Anadarko found there years ago). If they don’t get that going in a timely fashion they risk the government taking back the VR375 lease. And then there will likely be some activity associated with the Texaskew deal. So potentially a lot going on. Just wish we would hear something definitive about a Corvette partner and drilling plan.
Based on past performance, just having drilling going on should do wonders for the SP. If Tau #2 is a discovery, I can only imagine. And that one looks like it will go for sure in the next few months. Just the few facts as we know them - but don’t buy anything based on what I post.
You are correct. The joint venture with Texaskew is for shallow shelf conventional prospect generation and drilling. That means Plio-pleistocene targets above salt at depths above 10000 feet, and bright-spot/hydrocarbon indicators associated with each prospect as a requirement. Corvette is a subsalt, exclusively Miocene prospect below 12000 feet and wouldn’t necessarily involve any hydrocarbon indicator technology. Completely different ball game. Drilling costs for the Texaskew stuff would be on the order of 5 to 10 million dollars per well. I suspect Corvette will be several times that. Texaskew might want to get in on Corvette, but it isn’t what the company is designed for at all. Only real benefit I can see from the joint venture in the short term is a little help on Gulfslope’s overhead costs.
Anybody have any insight from Gulfslope and Delek published info. as to how the insurance money will be allocated? The insurance company is committed to getting the partners a new wellbore down to 15254 feet where the “well control incident” happened. Does the operator just hire the rig and drill the well and then send all the bills to the insurers? It’s a weird situation, one that I haven’t seen in a long career in the oil patch. So they get to 15254 in a new location, and presumably keep going. At that point what portion of the bills gets paid by Delek, and what portion by Gulfslope? I assume there might be another partner involved to replace Texas South. What will be the final ownership of any field they find? The good news is they get a free, new, hopefully problem free well bore. But it is a mess from a deal standpoint. Would be nice to get some clarification from one of the remaining partners. Especially since it looks like Tau is going to be the only real Gulfslope asset, if successful.
You’re right, that there were a lot of problems with lost circulation all during the drilling. However these didn’t have the seriousness of the final control incident which shut the well down. That was clearly a different animal, and the insurance company agrees it was equivalent to a blowout, or near enough for them to reimburse the companies.
Nobody has mentioned one aspect of this insurance re-imbursement. Essentially what Gulfslope and Delek purchased for the Tau well was “blowout insurance”. We know the well didn’t actually blow out - there was no oil geyser blowing over the Gulf. But something pretty exciting did happen just below 15000 feet that caused Gulfslope to stop everything and get the hole plugged in a bit of a hurry. A well control event could be a very good sign if it indicated that they had gone through some sort of a hard seal and into a higher pressure pay sand. Since the insurance company is paying off, they are acknowledging that the well was perilously close to being out of control. I find that very interesting. It certainly isn’t the sort of event that is associated with dry holes, but Gulfslope of course can’t claim a discovery because they were just trying to get the well under control and couldn’t do the required evaluation. This was anunfortunate event but it could in the end be a sign of good things ahead. And a free redrill, no less. Hmmmm
You are pointing out the support for what I am saying. Delek appears, at this point, to only be interested in harvesting whatever they can from Tau. Fine, if Tau is indeed a big discovery it will be nice for them and for Gulfslope. But the point and the vision of the company is to prove that there are a lot of potential Taus on the shelf. Without that vision there wouldn’t be a Gulfslope. Finding a one-off discovery that isn’t followed up by others will result in maintenance of the status quo. That is, the industry will refuse to explore the shelf subsalt, because they “know” that there isn’t any reservoir there. So Gulfslope drills Tau #1 and guess what? There is even more reservoir there than expected! Probably just a little sand pocket that won’t happen again, right? Or maybe John is right and the industry is dead wrong. Without a real, exploration-oriented partner, several potential giant oil fields are still going to be sitting there 100 years from now. And our stock, by the way, is going to still be in the toilet. So forget Delek. They had their chance and they played it safe. You don’t find big oil fields by getting cold feet.
Delek being a multi-billion dollar company does Gulfslope no good if they aren’t contributing funds to continue the exploration program. It is at least possible that they are not interested in risking anything doing exploration, but will just sit back and let Gulfslope and ? partners take the risks, and then cash in their shares if/when one of the prospects (Tau?) is a success. Why not? They obviously have no more stomach for exploration, and if Gulfslope goes under they aren’t really out anything but pocket change. It’s a smart strategy, but it isn’t helping to grow Gulfslope, and that’s all I’m interested in. So screw ‘em. If they don’t commit to Corvette or Canoe Deep or another prospect soon, then I don’t think there is any “parnership” interest on their part. They will just be another stockholder sitting back and letting the Gulfslope team fight the battles. How is that in any way helpful?
I have no idea what is up with Delek. At first it appeared they wanted to be a long-term partner with Gulfslope to thoroughly evaluate the shelf subsalt. But after only the first two wells they seem to be abandoning the whole idea and just salvaging what they can from Tau. Not at all impressive. If that is the kind of partner they are going to be then good riddance. They obviously don’t have what it takes to do serious exploration. I just hope Tau is enough to bring in a new partner that will stay with the program rather than going all weak in the knees and running. As I recall Corvette was an even better structure than Tau. I guess the upside is that Gulfslope won’t have to share it with Delek.
Yes, but we want to be richer.
I suspect Corvette will be the second well, and Tau will be next. This based on Gulfslope having a built-in Tao partner in Delek, so the financing doesn’t require bringing in another party. Tao 2 should be operationally easy, since they will just be re-doing the Tao 1. The rig will have to be retrofitted with equipment to handle pressure imbalances and excessive cuttings, which ate their lunch the first time. The rig will probably head to a coastal location to do the equipment upgrades and then wait for Gulfslope to get the permits and money in place for drilling. Also probably need some intense discussions between the partners about where exactly to drill and how deep. I say Tau 2 first because funding for Corvette hasn’t been announced. But drilling Tao 2 is really the best alternative. At this point it has to considered a lower risk, high return prospect, and you can’t beat that.
BTW - apparently Smith199 didn’t have an account with iHub, so wasn’t allowed to post. Hope he signs up, because I miss his posts also.
This is really good news, IMO. I don’t believe there is any current production through the platform they are acquiring. But it is a usable facility, with two slots left for additional wells, according to the BOEM website. The previous owner, Rooster Petroleum, has been near bankruptcy for years if I recall. So they probably didn’t have any money to drill additional targets from VR376. If they left anything behind it could be easy pickings for Gulfslope with little risk, and early production. Also, being able to drill Corvette from the platform will make things much easier and quicker. I’ll be waiting to hear what plans Gulfslope has for exploiting this new acquisition (assuming, of course, that they close the deal).
Action today was really encouraging. Only a minimum of selling and options, and a solid $25000 worth of shares purchased. Maybe some more folks are realising this is a great opportunity.