Dominating the MARKET !!!!!!!!!
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Great find. Again, liking this more than HRT, just due to the value, and zero drama. Although, I like the whole Namibia region and story, so I remain in both.
No Pan Continental for me however, so I am sure they will HIT IT !!!!!!!!!!!!!
Van
Heading toward that upper channel wall at $8.00ish. Action these past few days has been GREAT.....BIG Moves on HIGH Volume = True Strength
This is SHORT SQUEEZE 101
I would argue the past 5 days of trading are signaling something else. I would not be surprised if RQ lines up Financing package here shortly.....and preemptively gets the stock price up.
Financing contingent upon permits and approval of updated Feasibility obviously.
That I believe in the next 4-months will be the game changing event here with PVG
Let's also not forget....Lots of SHORTS as of April 30th
12 days to cover at normal Volume !!!!
Settlement Date Short Interest Avg Daily Share Volume Days To Cover
4/30/2014 3,461,256 281,428 12.298904
4/15/2014 3,563,271 430,471 8.277610
3/31/2014 3,528,790 499,439 7.065507
3/14/2014 3,636,061 665,979 5.459723
Read more: http://www.nasdaq.com/symbol/pvg/short-interest#ixzz31WkYlqPr
Casey Research Article....may be helping as well
Casey Research
Discovery of the Decade, On Sale
Pretium Resources (PVG, $6.57, PVG.TO, C$7.18, $712.8 million market cap)
The Pretium story is simple: a group of serially successful geologists have made an extraordinarily large and spectacularly high-grade discovery in an area called Valley of the Kings, which is part of the company’s flagship Brucejack gold project in mining-friendly Canada.
We’re not talking about grams of gold per tonne (g/t) here, or even ounces, but kilos of gold per tonne in many drill intersections. And we’re not talking about a small, rich “sweet spot,” but a monster gold system with more than 6.6 million ounces of gold in Proven & Probable mining reserves, averaging 13.6 g/t gold, within 13.6 million ounces of gold in all resource categories, averaging 20.5 g/t gold.
There are 1.7 million more ounces at the project’s West Zone. Both zones are wide open for expansion—and are adjacent to 35 million ounces of bulk-grade gold in Pretium’s Snowfield gold project (which itself is adjacent to Seabridge Gold’s 63.9-million-ounce bulk-grade KSM deposit).
To give you an idea how rare a bird this is, a recent report shows 26 gold deposits larger than one million ounces—just 26 in the entire world—that have more than 10 grams of gold per tonne of ore.
There are only 11 such deposits above 15 g/t, which the Valley of the Kings zone beats, if you consider its 8.7 million ounces of Measured & Indicated gold averaging 17.6 g/t. To count publicly reported gold deposits that are both larger and higher grade than Pretium’s Valley of the Kings, you only need one finger.
That’s right: just one.
Pretium’s Valley of the Kings is the richest gold discovery in the last 10 years, and one of the richest in recorded history.
But that’s just the beginning. A deposit this rich will pay for many faults and still make for a highly profitable mine, but there are many questions to answer before one can say so. Is there a lot of mercury, arsenic, or other toxic elements in the mix? Is there a national park or endangered species living on top of the deposit? Is the local government likely to steal the mine if one builds it?
I don’t have space in this column to deliver an entire “Casey 8 Ps” analysis of the company, but the questions above have been thoroughly addressed in the company’s June 2013 feasibility study. That study is being updated in view of the company’s late 2013 bulk sample, which produced almost 50% more gold than the company’s estimates predicted.
Pretium also discovered more gold veins when it went underground for the bulk sample, and is incorporating those and other new discoveries into its mine plan.
Nevertheless, and despite what is a somewhat aggressive—at the moment—gold price assumption of $1,350 per ounce, the study yields some terrific results, including:
After tax net present value (NPV-5% discount) of $1.8 billion
After tax internal rate (IRR) of return of 35.7%
Project finance payback in 2.2 years
Mine life of 22 years, at an annual rate of 425,700 oz. per year
All-in sustaining cost of $508 per oz.
Critical point: even at an unrealistically low $800 gold price, the project still makes money (IRR of 13.7%).
In short, this project has all the signs of a world-class, high-margin gold mine in the making, at a rate of production large enough to make Pretium of interest as an acquisition target for any of the world’s major gold producers.
That’s particularly important today, because one of those major producers, Goldcorp (GG, G.TO), just lost out in a bidding war over Canada’s Osisko Mining (OSK.TO). Goldcorp has shown its appetite for acquiring large, world-class assets while prices are down, and it has a good $3 billion in working capital to pursue them.
It’s hard to imagine a more attractive takeover target than Pretium—and if that happens, these shares could easily jump 20% to 30% in a day.
That’s no exaggeration; just look at Osisko’s stock chart, and you’ll see that it jumped more than 20% when Goldcorp made its offer last January and is close to doubling since then.
But the beauty of the situation is that Pretium doesn’t need to get bought out in order to hand us a major win; the company is fully funded for this year’s work advancing the project, and even has a little cash flow coming from a small amount of (very high-grade) mining allowed under its exploration permit. Given the exceptionally high rate of return on investment the Brucejack project boasts, we think the company will be able to obtain bank and other financing to build the mine and become a highly profitable mid-tier gold mining company.
Investors who buy now win either way, which is why this company is one of those listed in our special report, 7 Must-Own Mining Stocks for 2014, which you get free if you try a risk-free subscription to the International Speculator today.
You can read all the details about Pretium in that report, but there’s one more thing I should tell you, in case you decide not to subscribe; there’s a reason besides gold’s correction that these shares are selling for less than half of what they were a couple years ago.
It’s quite the drama, actually; last October, one of Pretium’s consulting engineering firms (a highly respected firm in its field) quit the job abruptly. On the way out, they basically said that the Brucejack resource estimate was bogus—that the deposit wasn’t really there!
That’s pretty extreme, but even more extreme was the consultants saying that, based on their statistical analysis, the Valley of the Kings bulk sample then under way should be stopped, being a waste of time and money. Management and a second consulting firm that made the resource estimate calculations (also highly respected) said they wanted to see the proof in the pudding of the bulk sample.
And a good thing, too, because their view was fully validated by the bulk sample; instead of the 4,000 ounces the bulk sample was originally estimated to produce, the sample actually yielded 5,865 ounces of gold—and that in a toll mill in Montana, not optimized for Brucejack ore.
Of course, that took time to show, and before the company could prove its point, a ridiculous number of ambulance-chasers announced class-action lawsuits on behalf of shareholders, and the whole circus took this formerly $17.92 stock all the way down to $3.10.
Now, I have known management at Pretium for many years, and was dead certain they were not faking their deposit, so I doubled down. (Yes, I personally own shares in the company; I bought them after recommending the stock to subscribers, and I am not allowed to sell them before giving subscribers a chance to do so first.) Many International Speculator subscribers were able to buy shares close to the $3 mark and have doubled their money on those investments since then. Because I was right: the bulk sample results vindicated management—and added a significant amount of cash to the till. The company is back in the race today.
But it’s not too late to build a position in this great company with the discovery of the decade in hand. Due to gold’s continuing fluctuations, the shares are still selling for not much more than they were at IPO—before the company made its record-smashing Valley of the Kings discovery.
Remember; a Ferrari is a Ferrari, value is value, and when you can buy a high-margin $1.8 billion asset for $700 million (or $6.57 or C$7.18 per share), that’s a bargain.
To find out more about Pretium and our six other 7 Must-Own Mining Stocks for 2014, I encourage you to subscribe to the International Speculator today. Remember that you have three full months to check out our newsletter, and if you’re not happy with it, cancel any time within those three months for a full refund.
Or, if you decide to just buy or watch the stock to test us out, that’s fine too; I sincerely hope you’ll make a bunch of money, and come back for more.
Gold and Silver HEADLINES
Funding Still an Issue for Miners, Especially Juniors (Mining.com)
The latest quarterly report released by SNL Metals & Mining reveals that funding remains an issue for miners, especially explorers. Out of the mere US$7 billion raised by the mining sector in the first quarter of the year, only $1.6 billion went to juniors. Exploration activity has contracted rapidly; the number of projects that reported drill results in the quarter was 856, which is just 56% of the year-ago level (1,517), which itself was down from 62% in the first quarter of 2012 (2,465).
Regarding regional activity, SNL highlights two areas: Asia, which is dominating metals production, and Latin America, which remains an important target for mine development.
Oklahoma House Passes Bill That Reaffirms Gold and Silver as Money (Tenth Amendment Center)
A bill to legalize gold and silver as legal tender was passed through the Oklahoma state house with a resounding 74-12 vote. The bill also provides a state-level tax exemption to Oklahoma residents who exchange their precious metals for another medium of change.
If signed into law, the state will become the second to recognize gold and silver as legal tender authorized for payments of debts and taxes. Earlier this year, the Arizona senate passed a similar bill by a vote of 18-12, but it stalled in the state house.
Recent News in International Speculator and BIG GOLD—Key Updates for Subscribers
International Speculator
This potential 10-bagger company has launched an aggressive drill program, and several of the targets have game-changing potential for the stock. Even more attractive is that the company is undervalued for what it already has.
This stock is down on some alarming news, but we say it’s a buying opportunity. When things get sorted out and the company gets back on track, the current sell-off will be seen as an excellent buying opportunity for a wide range of investors… but only in retrospect.
BIG GOLD
Despite significantly lower metals prices, this company’s higher production last quarter led to an impressive 14% rise in profit. Though there is political risk with the stock, this growing mid-tier producer is on its way to a major, which makes it worth the risk.
One of our top picks reported another strong quarter, thanks to recent acquisitions and higher production from several assets. The company remains in a very strong financial position—lots of cash, no debt, and an untapped credit line, all of which signal M&A is around the corner. Here’s our guidance for the stock.
May 12, 2014
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About to break through $7.00+. Great price action for PRETIVM. Out performing the rest of the mining sector....and much better than the metals.
Presentation Tower did on May 2nd I believe. IF you search hard enough, you can find it.......Tower boards have it I believe. Those were some dude's notes on the meeting/presentation.
Is there a reason for the Dance Drilla.....???
OT: Welwitschia
OT: More on Tower and Well
Facts
Today 19:12
1, Repsol are drilling a 9.9 billion barrels prospect.
2, 30% share of licenses
3, There are oil seeps in the area.
4, HRT has brought up light crude oil next door.
5, 4 way dip closure (most big oil discovery are made with this in place around the world)
6, proven source rocks.
7, very experienced bod
8, Big boy institution investors are on board.
9, Drilling in a stable country.
10. Much higher cos compare to the industry norm.
11, Repsol are running the show who has a 50% strike rate.
12, Another company changing drill in Q4 Kenya.
13, 5 reservoirs targets in one drill the highest cos being 39%
14, follow on drill a further 3 billion barrels in the license.
15, TRP do not intend to develop if oil is found which would take many years before investors see return on their investments but instead to sell discovery to the highest bidder.
16, duster and sp may fall by 70% but will rise flack up to today's level for Q4 drill in Kenya.
17, Oil strike and so will rocket 1000% and once appraisal are done the sp could rise 3000% - 4000%+ from today's sp.
sure there is much more I have missed....
Still a good week for Pretivm overall.
Getting closer and closer to mining !!!!!
I think this report for the Tower meeting is Telling, and important.
From Tower meeting
They are likely already at the first target on the well......
Namibia.
The elephant that they made clear attracted the board, and certainly Nigel Quinton. It's the 'jewel in their crown' and you can tell their is palpable excitement when hey talk about it. In a completely non-factual way and when you consider they will have some info by now, I felt they almost 'gloated' about Namibia and how they got in their early, looked at the data and were establishing themselves as a quality explorer. This is a good thing. This was not a presentation to attract funding, they don't need it. Short term spike on rumour, not worth it. No, this was a confident man proud of what they had achieved.
Nigel said that TRP had pretty much the pick of the acreage when they invested and they chose the block we have as the best there. He also joked that Tullow had been quite smart in jumping in next to them last September (at a premium), again very bullish. The money that has since gone in from majors and super majors is huge. For example, you'll know that Shell has recently gone in, they spent $54M, but they believe the commitment is well in excess of that.
Some quotes:
- No other company in the world has an asset like this.
- The WW1 basin is as large as 60 North Sea wells combined.
- Thick source rocks that are thought to extend beyond the basin and into deep water. Plenty of future money coming into the coast here.
- This is one of 3 structures that are the largest seen in the last 30 years.
- Repsol said: "where else can I find structures of this size ready to drill?"
- It was Repsols choice to have a tight drill and not TRP's, and Nigel pointed to HRT's success in keeping it tight until the end. About half the management team on the crew are Repsols own.
- Interesting one here as this has been debated. 3000m drill INCLUDES 1000m of seawater. There is only 2000M of drill in rock. By any estimations, they are definitely in Target one by now and would have had news prior to this presentation.
Drill Bit continues.....lots of rumors, but nothing confirmed yet. This is MATERIAL to HRT value and share price. Besides TOWER, HRT has the most to gain from a OIL HIT on Welwitschia Well. Great Free look....HUGE potential
Welwitschia Summary
This event again, has the potential to 5X HRT price from here alone. We are set to benefit more than any other company, save Tower, with a Namibia OIL hit. Amazed HRT price is allowing investors to have a free option on this Drill, with cash and production to back the value in case of a Dry hole.
I think this one has a REAL shot !!!!!!!!!!!!
What is attractive about the Welwitschia prospect
Situated at a migration focus in Walvis Basin:
Welwitschia is situated at the northern end of the Walvis Basin on a structural high on the flank of the Walvis Ridge. Structural highs act as focal points for both horizontal and vertical migration of hydrocarbons. This puts Welwitschia and Tower’s other prospects in ideal locations for the migration of hydrocarbons from mature source rocks in the adjoining Walvis and Namibe Basins.
Direct Hydrocarbon Indicators in seismic:
Visible in 3D seismic are certain very clear AVO responses. A very strong anomaly could be indicative of gas, which would correlate with the gas chimneys seen. Weaker responses could be indicative of oil. The independent auditor, Oilfield International Limited, has taken into account the possibility of finding gas. It estimates a 35% probability of finding dry gas and/or condensate, but a 65% probability of finding light oil.
Gas chimneys which terminate at a seal:
Gas chimneys are very clear on the seismic. They are visible as vertical pock marks which represent the disturbance of sediment as gas travels vertically through various layers. Gas chimneys are suggestive of the presence of hydrocarbons in the section, although they can also be caused by de-watering or paleo gas escape. What is compelling in the case of
Welwitschia is that the pock marks all terminate at the same horizontal layer. This provides confidence that the seal rock, an impermeable shale, is intact and not allowing hydrocarbons to escape
Proven reservoirs in Upper Cretaceous elsewhere in the basin:
Norsk Hydro drilled two wells on the edge of what are now Tower’s licences. One of the wells saw ‘good fan sands’ in the Cretaceous and younger Tertiary. Tower is drilling to test these specific rock layers. Knowing that there is good quality reservoir so close to Tower’s prospects is highly encouraging. While further afield, HRT’s Murombe well encountered good quality sand in the upper Cretaceous and Chariot’s Tapir South encountered thick, excellent quality reservoir sandstones.
Agreed on the volume.....no clue on price.....besides buying here is cheaper than the hedge funds entered....and jg. Not a bad value from that angle.
Sorry on rude reply......getting lots of requests to delete posts and posters. I do recognize your feelings on this one.
Great action.....it's acting like something very good is soon to be released.......or meaningful events are coming to fruition. Perhaps the updated feasibility report is looking good.
Strength is nice, good volume.....overcoming a drop in AU
Van
Brazil boards are saying the production drop is due to maintenance.....I hope that is correct.
Look guys: Message boards are NOT nice places. I cannot control every remark, and frankly don't have time to read every post, or time to moderate 24/7 in a way that will protect everyone's feelings.
Anyone can become a Mod, so feel free to join the ranks if you want more, or less, censorship.
I focus on the following:
#1. Making Money
#2. Learning EVERYTHING I can, to become better a #1
Good Luck out there boys......
Great Info Drilla !!!!!!!! You are MVP on this board bro !
Zurich presentation now Wednesday FYI
HRTPY price should be .1743....major discount again.
Decent action in Brazil again today
rt Petroleo-on Nm (HRTP3-BSP)
Last: 0.78
Change: 0.03 +(4.00%)
11:34:51 EDT
Overview
Chart
Last 0.78 Volume 5,402,000
Read a couple pages further......that is as the operator.....not net to hrt.
Agreed, one month or two is not a HUGE issue.....but a longer term trend would be a very, very bad sign.
They knew those production numbers early in the day in Brazil........not sure how to read the action, besides the sell-off was overdone, and due for a bounce.
Short Squeeze is mentioned as reason why.....but HRT would have been the short of a lifetime thus far.
My guess, like all the other HRT trading action.......something behind the scenes got accomplished today, and the Big money bought on the event.
Maybe we find out in a day or two.
Translated from today:
HRT share rises 20 % as bank cuts target price by 72%
Rumors that the company may be interested in buying the 40 % stake in Maersk on the Polvo field seem to start animating investors
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By Mark Mortari
| 19h01 | 05/05/2014
a a
SAO PAULO - In free fall of over 80 % in the 12 months, the shares of HRT Petroleum ( HRTP3 ) gave a temporary sigh on Monday ( 5 ) , to close with amazing high of 19.05 % listed R $ 0.75. The movement also draws more attention if it is taken into account a recent report by HSBC , which reduced its projected target price on the roles of pre - operating company to 72.86 % from R $ 1.40 to R $ 0, 38.
To defend the deterioration of the expected scenario , analysts Luiz Carvalho and Filipe Gouveia stated that the assets of HRT in Namibia and in the Solimões Basin still have value. " In the short term , do not expect the company to drill additional wells in these areas , so the landscape can change only in case of a reduction in their holdings in exploratory blocks " , they argue .
Given the worsening scenario for the oil in the evaluation of HSBC , one would expect a fall in the roles . During the trading session on Monday , the InfoMoney investigated the possibilities of having been a short squeeze on the company's shares was not confirmed . The term refers to times when the price of a stock rises so that investors positioned themselves sold the paper seek to close their positions , often due to scarcity rents , which further boosts the papers .
Ceiling of R $ 1.37 recorded in late January of this year to today's closing , the shares of oil accumulate strong decrease of 45.26 % ( Getty Images) From the ceiling of R $ 1.37 recorded in late January this year to close today , shares of oil accumulate sharp fall of 45.26 % ( Getty Images)
Crossing the graphics data website of the Stock Exchange , which until the eve showed volume rents the house of 9 million , with the ceiling 54 million established by BM & FBOVESPA for rents HRTP3 , there is a perceived gap in the supply of positions rental on roles - a factor that rules out the hypothesis .
Amid such a negative scenario, the market is difficult to wait for good news . However , this is what happened with HRT this session . Rumors that the company may be interested in buying the 40 % stake in Maersk about Polvo field - the one that has generated revenue for HRT - instead of selling the 60 % who currently holds seem to start animating investors . In an article published last Friday ( 2 ) blogger Geraldo Samor , Veja , remember the withdrawal of the company, now under the command of Nelson Tanure , sell its stake in the Norwegian BW Offshore , a movement which at the time had been understood as a change of mind by the alleged buyer .
In his text , Samor also states that the company, which has approximately U.S. $ 300 million cash , should receive one-third of this value only in this quarter , with the sale of the second shipment of oil from the same field of Octopus . Rumors that the purchasing strategy of HRT on the rest of the enterprise does not own can bring increasingly positive results for the company to help you with your financial recovery have been circulating more frequently in the market.
Information not had any confirmation , but represent a small temporary relief to the drama of HRT . Ceiling of R $ 1.37 recorded in late January of this year to today's closing , the shares of oil accumulate strong decrease of 45.26 % .
other news
March Polvo Production Numbers.....4,757 bbl/d to HRT....that is their 60% share of the 7,928 produced in March.
Big Action in Brazil !!!
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Hrt Petroleo-on Nm (HRTP3-BSP)
Last: 0.75
Change: 0.12 +(19.05%)
16:05:00 EDT
Overview
Chart
Last 0.75 Volume 9,207,300
got it
Ya, really weird action on all the miners today.....seems like they want to go higher, but the legs were taken out early in the sector.
Nice earnings beat by HL after-hours, which should see a bump tomorrow.
PVG & RQ also presenting tomorrow in Zurich....always a good thing. Real money over there.
I expect this to hit $7.00+ in short order if the gold price stays steadily above $1300.
Not a home-run in the miners today my any means.....odd.
Agreed, I've been the one slapping the ask the past week......getting a fairly good share count going.
Coming Tuesday......
May 6, 2014 European Gold Forum
08:00 AM
Speaker(s): Robert Quartermain, President & CEO
When: 02/06/2014 - 02/08/2014
Where: Park Hyatt Hotel, Zurich, Switzerland
Presentation: Tuesday, May 6, 3:00pm
Farm-out Post
DrillaHill Friday, 04/11/14 04:43:40 AM
Re: None
Post # of 111
Next Hot Spot Offshore Morocco - Farmout Terms
Chariot is Operator of 3 Blocks in Offshore Morocco,
owns 75% of ~16,500km² of acreage.
A week ago Chariot commenced a
1,700km2 3D seismic survey across its areas of interest.
Fastnet (Partner with Kosmos),
another Company Drilling in Morocco, achieved a
massive US$65,749/ km² farmout Agreement
with SKI (Having secured a two well carry!!)
Offshore Morocco farm-out terms(page 4, Exhibit 4):
Edison-Research-Fastnet-Oil-(Morocco)
Fastnet’s farm-out to SKI values the block at $426m
(inmplied value of US$65,749/ km²)
Chariot owns 75% of 16,500km² acreage in Offshore Morocco.
Using latest farmouts implied values of $/km²
(US$10,011/km² to US$65,749/km²)
would value
Chariot's Morocco Assets at:
(16,500km²*0.75*(US$10,011/km² to US$65,749/km²))
~US$124MM to US$814MM
GLA
Great Post from Jimmy:
I had a quick look at the annual report and it certainly is well presented and covers chariots activities well.
I noticed the following issues that are worth noting,
1. Chariot expects to drill 3 wells in the next three years.
2. There is a lot of enthusiasm for morroco and a strong emphasis on the proven source rocks onshore as well as numerous comparisons with Canadian Atlantic conjugate basin where giant discoveries were made. The offshore shallow water gas potential looks very low risk to me and a quick way to cash flow.
3. Confirmed again that the k1 well in block 2714 a had encountered world class but marginally mature shallow petroleum system source rock which is highly likely to be oil generating to south in block 2714 b. no comment on partners plans for block 2714 a. I firmly believe the source rocks encountered by the k1 well will be mature for oil generation to the west of block 2714a also where chariot previously mapped a number of prospects.
4. Chariot have introduced a corporate governance committee and a technical committee of the board that reviews all projects . This is great news and very much reminds me of the technical committee that tullow use to screen all projects. A great idea and ensures shareholder funds are spent wisely on projects that are peer reviewed by seasoned industry veterans. Well done George.
5. There is more info on brazil, it's still early days but it looks like all the ingredients are in place for giant discoveries.
With a share price at 20 p and approx 1/3 of book value and a policy of zero cost exploration this is a great opportunity for patient investors to buy and hold. Chariot just need to get lucky once and with time they will.
Jimmy
Yep. I saw the same thing. Too bad......us paper values would be nice !!
We are in the right region.....can we capitalize ?!?!? The more you read about activity in the region, shows the majors believe OIL hit is imminent.
Here are a few details of the farm in agreement between Tullow and Pancontinental in Namibia, according to a Pancontinental brokerage firm. Interesting to know that Tullow are required to make a decision about drilling a well before the end of July 2015
__________________
The basic details require Tullow to free carry PCL through an extensive 2D
(1000km) and 3D (3000sq km) seismic program and an optional exploration
well to earn a 65% interest in EL0037. The value of the work is assumed by
PCL to be in the range of US$110m-130m. PCL will retain a 30% interest in
EL0037. Tullow will reimburse PCL to 65% of back costs (approximately
US$500k). The seismic program must begin by December 2014 (PCL
expect the seismic acquisition to begin by late 2013). Paragon Oil and Gas
retain the remaining 5% interest in EL0037.
There are some unique aspects to this agreement that should be
highlighted. Should Tullow choose not to proceed with the exploration well
after completion of the 2D and 3D seismic program then the 65% interest
will be re-assigned to PCL at no cost. To withdraw Tullow must inform PCL
in writing no later than 16 months after capture of the 3D seismic data or 13
months prior to the expiry of the First Renewal Exploration Period,
whichever is earliest. If we assume the seismic program is complete by end
1QCY14 then the first withdrawal deadline will be July 2015. This clause is
unique to recent farm out agreements that usually include an “optional well”.
No spending cap
An important aspect of the agreement with Tullow is that there is no
spending cap on the work program. In other farm out agreements a
spending cap is usually set which means that when costs exceed a certain
amount the junior partner (or farmor) is on the hook for cost overruns.
From Tower meeting
They are likely already at the first target on the well......
Namibia.
The elephant that they made clear attracted the board, and certainly Nigel Quinton. It's the 'jewel in their crown' and you can tell their is palpable excitement when hey talk about it. In a completely non-factual way and when you consider they will have some info by now, I felt they almost 'gloated' about Namibia and how they got in their early, looked at the data and were establishing themselves as a quality explorer. This is a good thing. This was not a presentation to attract funding, they don't need it. Short term spike on rumour, not worth it. No, this was a confident man proud of what they had achieved.
Nigel said that TRP had pretty much the pick of the acreage when they invested and they chose the block we have as the best there. He also joked that Tullow had been quite smart in jumping in next to them last September (at a premium), again very bullish. The money that has since gone in from majors and super majors is huge. For example, you'll know that Shell has recently gone in, they spent $54M, but they believe the commitment is well in excess of that.
Some quotes:
- No other company in the world has an asset like this.
- The WW1 basin is as large as 60 North Sea wells combined.
- Thick source rocks that are thought to extend beyond the basin and into deep water. Plenty of future money coming into the coast here.
- This is one of 3 structures that are the largest seen in the last 30 years.
- Repsol said: "where else can I find structures of this size ready to drill?"
- It was Repsols choice to have a tight drill and not TRP's, and Nigel pointed to HRT's success in keeping it tight until the end. About half the management team on the crew are Repsols own.
- Interesting one here as this has been debated. 3000m drill INCLUDES 1000m of seawater. There is only 2000M of drill in rock. By any estimations, they are definitely in Target one by now and would have had news prior to this presentation.
Welwitschia Summary
This event again, has the potential to 5X HRT price from here alone. We are set to benefit more than any other company, save Tower, with a Namibia OIL hit. Amazed HRT price is allowing investors to have a free option on this Drill, with cash and production to back the value in case of a Dry hole.
I think this one has a REAL shot !!!!!!!!!!!!
What is attractive about the Welwitschia prospect
Situated at a migration focus in Walvis Basin:
Welwitschia is situated at the northern end of the Walvis Basin on a structural high on the flank of the Walvis Ridge. Structural highs act as focal points for both horizontal and vertical migration of hydrocarbons. This puts Welwitschia and Tower’s other prospects in ideal locations for the migration of hydrocarbons from mature source rocks in the adjoining Walvis and Namibe Basins.
Direct Hydrocarbon Indicators in seismic:
Visible in 3D seismic are certain very clear AVO responses. A very strong anomaly could be indicative of gas, which would correlate with the gas chimneys seen. Weaker responses could be indicative of oil. The independent auditor, Oilfield International Limited, has taken into account the possibility of finding gas. It estimates a 35% probability of finding dry gas and/or condensate, but a 65% probability of finding light oil.
Gas chimneys which terminate at a seal:
Gas chimneys are very clear on the seismic. They are visible as vertical pock marks which represent the disturbance of sediment as gas travels vertically through various layers. Gas chimneys are suggestive of the presence of hydrocarbons in the section, although they can also be caused by de-watering or paleo gas escape. What is compelling in the case of
Welwitschia is that the pock marks all terminate at the same horizontal layer. This provides confidence that the seal rock, an impermeable shale, is intact and not allowing hydrocarbons to escape
Proven reservoirs in Upper Cretaceous elsewhere in the basin:
Norsk Hydro drilled two wells on the edge of what are now Tower’s licences. One of the wells saw ‘good fan sands’ in the Cretaceous and younger Tertiary. Tower is drilling to test these specific rock layers. Knowing that there is good quality reservoir so close to Tower’s prospects is highly encouraging. While further afield, HRT’s Murombe well encountered good quality sand in the upper Cretaceous and Chariot’s Tapir South encountered thick, excellent quality reservoir sandstones.