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Only go to the well site when diving in southern Belize.
The last time I was there was on May 12th.
I suspect the former.
IMO when a company pays a lot of its suppliers in shares it is hard for auditors to sign off as how much you paid varies from day-to-day based on the share price. And auditors don't like things to depend on other things.
No three things are certain.
The third is that whoever in Treaty who left the well open for so long is incompetent IMO.
Our earthquakes are very small and very unlikely to cause the collapes of an oil well. IMO
The well was 'lost' due to pure opertaional incompetence and complete lack of planning resulting in the hole being open for too long. IMO
Exactly right Geopressure.
Exploration wells require a bigger rig than this irrespective of depth.
Photos are from more than a month ago - I have seen them before.
I am doing what I can to payback the environment.
The Gulf Coast cost me a lot in terms of lost BP dividends and depressed share price (I had more than 4 cents a share to lose!)
I was not proud of BP / Transocean / Halliburton / Cameron / US BLM performance in the Tragic Deepwater Horizon incident. IMO What happened was not in keeping with BP's normal efforts to protect the environment in the other areas worldwide where I worked.
But I am very proud of how BP stepped up to the plate and spent more than US$25 Billion (so far) on containment, clean up, restoration and compensation for this incident. BP and other companies have also spent $ Billions to make sure that such an incident doesn't happen again and if it does they will be ready with the required equipment. BP and other companies and the US Government have changed their deepwater drilling standards, approval procedures and operational methods too in response to this.
It was difficult for me for a while in Belize, but when the CEO of a large environmental NGO stands up and says on national TV "I am proud of having my BP man here to help me" then I know that my efforts are starting to bear fruit on the environmental payback side.
So how does this reflect on Treaty?
(1) FACT The average water depth of the offshore part of the Princess Petroleum concession is 4-5000 feet. Similar to the water depth of BP's Macondo well that blew out in the Deepwater Horizon incident. Water depths in the offshore part of the Princess concession range from 0 feet (including protected areas such as National Monuments) to 12000 feet where no-one on earth can drill.
(2) IMO Neither Princess Petroleum nor Treaty Energy have the technical or financial capability to drill in the water depths in the offshore part of the Princess concession
(3) IMO Companies like Treaty who can only just afford to drill could never afford the billions in clean up costs if anything went wrong in such an offshore environment (or even onshore for that matter)
Think you missed out "ly slow" after the fourth word in your first sentence!
I am worried about TECO because....................
I have convinced the environmental lobby here in Belize that onshore oil is environmentally OK (in the right places with the right standards) and good for Belize's economy.
That was based on what I saw of BNE's onshore standards and performance track record (which was as good as my former company BP).
The environmental lobby kept pointing out that Treaty CEO Andrew Reid has a dubious track record with the SEC, but I have communicated with him directly several times and I am willing to give him the benefit of the doubt (even if my wife wasn't).
But in Belize, Treaty have badly disappointed me. So I am worried.
And I expect that a lot of shareholders, who may not be the most vociferous on this board, are worried too.
Wireline logging was invented by Conrad Schlumberger in 1926. This I have confirmed from my copy of Petroleum Production Engineering (Uren 1924) which contains no references to wireline logging at all.
But oilfield standards have rightly changed over time, the above referenced book for example shows well control devices being fitted after a blow-out whereas BOPs are mandatory equipment today.
So I can confirm that up to 1926 cuttings were used to establish the presence of oil and reserves.
The SEC was established in 1934. I can find no evidence that cuttings have ever been accepted by the SEC to substantiate proven reserves.
A Society of Petroleum Engineers review of reserves reporting (December 2005) states:
- The SEC rules for proven oil reserves were established in 1978.
- Additional disclosure of probable and possible reserves is prohibited by the SEC.
- The SEC requirement for proven reserves is that a well test is mandatory and can be only avoided in the Gulf of Mexico (GOM) deep water if the estimate is fully supported by seismic, wire line conveyed sampling, logs and cores.
On a separate subject, the items in the 8K that Treaty advised the SEC they would do to properly integrate and produce the well are only half complete.
I hope Treaty progress the actions they need to do in Belize to: Prove (if) they have proven oil reserves; And if appropriate: Preparation of a development plan and EIA for oil production; Confirmation of a Commercial Discovery; Field development; Establishment of an oil export route, and Oil production.
I also hope that Treaty start employing Belizeans soon, as their current way of doing business with equipment and people imported from the USA iritates me and the Belizean people. BNE, who operate two oilfields is a significant local employer, provinding employing between 200 and 400 Belizeans.
I think you may have missed some Treaty PRs.
You quote "Treaty ... are just beginning their operations phase of the business plan"
But the facts are:
- Treaty PRs from July 2011 (11+ months ago) talk of starting the operations phase of exploration drilling in Belize.
- Treaty PRs from October 2011 (8+ months ago) talk about the completion of the Texas well rework program (I am not sure myself when that started as i have only been following Treaty's progress since their Belize activity picked up.
- Treaty PRs in March 2012 (3+ months ago) talk about immediately starting drilling in Texas on return of the rig from Belize
So - in my view - Treaty are not just beginning their operations phase, they have been in that phase for the last 12 months with very little to show for it - yet.
I hope they start performing for their shareholders soon.
GoB is not the most open government with information about the oil industry, I agree.
But one big difference that you are overlooking. BNE had proof that they had found oil, Treaty haven't (yet).
Important to note that Treaty have not officially reported proven reserves in Belize to the SEC.
If they had the SEC would have fined them and possibly shut them down for false reporting. IMO - as a previously certified reserves auditor inside the oil company I worked for.
It is easy to take the press cuttings you quote out of context.
I think BNE, Belize's first oil company, would have been a great role model for Treaty to follow but they decided to ignore BNE and do their own thing. A mistake IMO.
Here's the facts:
BNE's concession was granted in January 2003 and their first and main field, Spanish Lookout, was discovered in 2005 and reported a production of over 2000 bpd in 2006 (that is from 0 to 1000 bpd in 3 years - UNLIKE TREATY).
The Never Delay field was discovered by BNE in 2007 by exploration well Never Delay #1 which they logged immediately (UNLIKE TREATY).
There was a lot of geological evidence of live and dead oil shows in wells drilled earlier in the area which were abandonned after drilling (UNLIKE TREATY / Princess San Juan #2 exploration well)
In 2009 new data derived from 3D seismic inventory, seemed to indicate a good potential for the Never Delay field with a possible extent of approximately 10,000 acre (±4,000 ha) extending from Never Delay proper beyond Belmopan to the west. (UNLIKE TREATY who have no seismic)
Three appraisal wells were completed before a development plan was made. (UNLIKE TREATY and their shareholders who think you can go from exploration well, then forget field development and start production immediately)
Based on seismic data combined with some findings made in the appraisal wells, Never delay was declared a commercial find on November 5, 2009 and an EIA with a development plan detailing 8-15 additional wells, gathering systems and primary processing facilities was submitted to the Government of Belize in April 2010. (UNLIKE TREATY who do not yet have any well data on which to based the declaration of commercial discovery. And Actually it woul be Princess Petroleum, the concession holders, who would have to make the declaration in any case.)
The news articles that you have pointed us to do cover debate in early 2010 about the Government of Belize (GoB) response on Never delay development. The EIA was submitted after this and officially took some time to approve (as I believe the GoB wanted to be extra sure that the EIA didn't give the environmentalists - who were lobbying hard against offshore oil at the time - anything to come back against them with). (UNLIKE TREATY who have not submitted anything to GoB to approve. IMO)
In 2011 Never Delay was developed (with multiple large drilling rigs) and in the middle of that year the GoB announced that the field was on production. (UNLIKE TREATY who have never found anything, developed an oilfield in any country nor produced any new oil yet)
I have been to Never Delay many times and have photos if you want to see them - to show you how a real oil company does it.
I went on a trip to Spanish Lookout yesterday too, as I needed a break from all the things I do in Belize City and I wanted to remind myself what the operations of a real oil company in Belize looked like.
I hope Treaty operations will look that professional soon.
Sorry to be so hard on Treaty today, but their amateurishness upsets me. And in the oil industry worldwide, professionalism, standards and track record are important.
You should ask Treaty's Belize law firm, who's name is emblazoned in the TECO IH page.
One of their principles is the Prime Minister of Belize, ie head of the Belize Government.
No finding any oil in Belize is a bigger problem for TECO shareholders.
I am not knowledgeable of the US share market. So you'll have to help me here.
I thought Treaty Mkt cap was $35 million not the $85 million you mention. Please confirm.
I haven't seen any firm who have spend a bunch of money and issued 750 million shares, with at least 500 million of these being used to pay for things (please confirm), who haven't got any oil production after 3 years of operation and zero revenue. Please tell me the others who have.
I agree it doesn't go smoothly in oil exploration.
But in all my 30 years of oilfield experience (including exploration, development, production and decommissioning) no-one has ever:
(1) Had to stop operations due to poor site prep (like Treaty has)
(2) Wait for almost 2 months before logging a well after it reached TD (but Treaty has) [approximate delay - TD was on Jan 27th but can't find the exact date that the well was logged or the video posted right now]
(3) Announced an oil discovery of 6 million barrels without anything to prove it, then have the local Government call the comapny a liar in a Press Release (but Treaty has)
Sorry about my silence today but I had to go visit an oilfield just to remind myself that they really do exist in Belize. Now I am back I will try to address the multiple questions asked of me during my absence.
I am comparing TECO actual to TECO promises.
And they are failing to deliver what they say they are going to deliver. Fact.
I don't care if you hold or sell your shares.
I know nothing about the art of share trading (what's legal and what is not in the USA) as I am originally from the UK and we don't do it like you do.
I do know a lot about the oil industry and IMO Treaty ain't performing like an oil company yet. To be an oil company you need to make good investments with your shareholders money and grow oil production. Time will tell on this but track record to date is unimpressive and operational performance is surprisingly poor. IMO
If I am just stating the obvious facts, why do so many posters on this Board ignore these?
End May has passed and no news is.....no news.
Strange how in the 4 months since January 30th PR on Belize Treaty have done nothing to add production. In fact reported production has declined.
Only one well has been drilled in Belize by Princess / Treaty Energy.
Their first well is named San Juan #2
But would you hire someone who spoke the truth?
Or would you prefer your employees to only tell you what you wanted to hear even if it was a lie?
Interested your response to these questions.
I didn't really understand your post.
I am not sure what you are talking about.
I post only facts or opinions based on my own professional experience.
Since Treaty declared an oil discovery of 5-6 million barrels in Belize (based on no hard evidence IMO), which was subsequently called a lie by the head of Geology and Petroleum Division of the Government of Belize, I have been cautious about the veracity of Treaty's PR and tried to draw more on the facts I can actually see or hear.
Just to correct you.
Treaty have not filed any statement of oil reserves discovered with the SEC. They could not do that as they have not fullfilled any of the SEC requirements to book PROVEN reserves. IMO.
So in my opinion they have not discovered any oil reserves yet in Belize.
I am a Chartered Petroleum Engineer with 30 years of international oil industry experience,for the last 7 of which I was an internally certified reserves assessor with the major multinational oil company that I worked for. During this time I worked on several reserves auditing exercises with a leading US reserves certification consultant and a learned a lot about what kind of proof was acceptable for PROVEN reserves.
IMO There is no proof of any Treaty reserves, yet, in Belize.
---------------------------------------------------------------
For clarity Treaty did attach a press release to one of their 8K filings, immediately after hitting TD in the first Belize well which stated the following. Which in my view is niit a declaration of Proven Reserves:
Mr. Reid, commented, “Treaty’s initial analysis of the 200,000 acre ‘onshore’ Princess Concession includes 80 anomalies showing promise. Through early analysis we believe we have so far identified 3 possible oil bearing fields of various sizes. Treaty chose the current, Stann Creek Field, for our initial exploration wells because of its easy access by our drilling team, proximity to nearby port facilities, and it being well outside of any protected areas. Our internal analysis indicates that the Stann Creek Field covers an area of around 350 acres, and with 4-acre spacing we would expect to drill up to 90 wells in this oil field. Based on our initial findings, we estimate there are about 5,000,000-6,000,000 Barrels of recoverable oil in place in this first finding.”
Exploration is a risk business.
Normal chance of success is 1 in 10 wells.
The chance of success can be increased by the application of good technology and studies by experienced geologists and engineers showing good judgement - unfortunately IMO Treaty is severely lacking in this expertise.
Without this expertise and application of appropriate exploration techiques, like seismic, you've got more chance of a Mercedes owner finding oil on their garage floor than finding oil in exploration wells. IMO.
You can always get lucky and beat the statistics. In Belize Treaty have not done enough to see whether this is or isn't the case. I hope they will soon.
On 10K it'll be there when it's issued. I am not holding my breath on this one as I would have been dead already.
Renting A Rigs Is Not Really A Dilemma
I fully agree geopressure. 99.99% can't be wrong.
This Maranco rig is lying idle at Maranco yard in Iguana Creek after finishing development drilling for the Never Delay Field. Fact.
Maranco is a subsidiary of PR Marriott Drilling Company. Fact.
I expect Maranco has drilling crews, ready to drill sourced in Belize. In My Opinion.
Treaty would have had Belize results one way or the other and much less chance of an exploration well blowout if the had used a more suitable and readily available rig like this. In My Opinion.
Also shown in the photo is top quality rig support equipment, like the cement unit on the left, that Treaty don't have. Fact.
Belize Update - Spanish Lookout Oilfield
Spanish Lookout Oilfield (SPL) is one of the only two producing oilfields in Belize. The other is Never Delay field near the capital Belmopan. Fact.
I attach a photo from SPL oilfield as I was there yesterday. Fact.
Originally Treaty stated that where they were drilling near Independence and SPL were expected to be similar. Fact.
I am a Petroleum Engineer, not a geologist, but even I can see the difference in geological context here, rolling hills, vs. the flat plains on the other side of the Maya Mountains where Princess / Treaty is drilling. In My Opinion.
Why do you think the 3000 well qualified Technical Director for Treaty - who can't seem to drill a hole in the ground - can't see this? Question.
I am surprised you all have so much patience with Treaty operations people.
In my working days, no-one ever had that much patience with me when oil production was at stake.
So the man whose CV says he's drilled 3000 plus wells hasn't learnt now to prepare a drill site yet.
There were problems with site preparation delaying drilling in both Belize and Texas.
I am not convinced of your explanation. All I am saying is that if this was my company, which it isn't, every day of lost oil production at 30 bpd would cost me $3000 - enough to move mountains and bulldozers (like the one lying idle at the Princess / Treaty wellsite parking lot in Belize).
Bull - I find your explanation "Unbelizeable".
Treaty won't bring a bulldozer from 100 miles away in USA to speed up drilling that will add immediate production, but Treaty will bring a bulldozer from a 1000 miles to Belize to explore for oil.
IMO the planning and decision-making ability of Treaty Management is not as good as it should be and needs to be improved.
Hope you will pass this message on, as I know you are close to them.
Time for a reality check after Mike Mulshine's email.
Interesting but this letter gives no comfort or indication about what Treaty will actually do. Almost all what he says is "jam tomorrow" and a lot of what he says is just plain misleading IMO.
As Mike Mulshine is from Osprey Partners, I am suprised he has not added the normal rider about forward looking statement to this email.
IMO several things he says are misleading:
- Treaty "has made incredible progress since...". Well - IMO it hasn't delivered any real value for its shareholders yet and its production track record is pathetic.
- I hope what he says about Texas wells is right, but remember the proverb "If it appears too good to be true, it is too good to be true". IMO Drilling a $160,000 well to produce 30 bpd sounds too good to be true. If this was a sure investment others would have made it before Treaty ever got anywhere near it - as I don't see what unique attributes Treaty bring to this.
- Treaty Energy Corp, may be in the top 1% of penny share companies in terms of acreage holding. But IMO it is nowhere near the top tier in the world. Nearly all national oil companies and all multinational oil companies (I am not aware enough of all the indepedents operating in the world to include them in this statement) have far more acreage than Treaty and all have them have turned it into a lot of oil reserves already.
- Belize with more than 55 years of oil exploration has only succeeded in producing a maximum of 4500 bpd. So IMO talk of 100,000 bpd is not just pure fantasy, it is out of this world. My research indicates that no geologist has ever understood Belize enough to know how much oil there is to be found or where it is, and as Mike Mulshine nor Treaty don't seem to have done much in the way of geological studies of Belize there is no way that they could know either IMO.
But I don't want this post to be all doom and gloom.
The reality is:
- Treaty are drilling in Texas and the actual production results of the first few wells will establish their investment track record (for shareholders) and ensure that the lender will come forward with funding for the full well program
- Treaty have access to a really big acreage portfolio in Belize but IMO operational problems have prevented them successfully exploring this so far. They need to move forward with drilling, at their site near Independence Village, with the objective of proving up commercially producible oil
Treaty thenselves posted photos of the rig being repaired, so I didn't have to - and I didn't see the repair going on.
If you don't want others to be aware of Treaty's actual activity in Belize, I am sorry as I am going to continue to post. I think I am helping and Bull (and others) have encouraged me.
In Belize a lot has to happen before oil would ever get into tanks:
(1) Permit to drill deeper than 1500 feet has to be issued by Government of Belize (GoB)
(2) Treaty have to ship and receive additional equipment including BOPs and lighter pipe
(3) Drill crew needs to arrive
(4) Drilling needs to start and continue for several days until new TD
(5) Then well needs to be logged to confirm whether or not there is moveable oil
(6) Then well results need to be studied to make completion, pumping and production plan
(7) The EIA, EMP and DMP need to be updated if the purpose of the wells changes from exploration to production(and approved by GoB)
(8) Completion, stimulation, pumping, seaparation and storage equipment needs to be purchased and shipped to Belize
(9) Contract for oil transportation within Belize and another for export need to be negotiated and finalised
(10) All above equipment needs to be installed and commissioned
So all this will take time - but most of it cannot be set in motion until commercial oil is confirmed. It is usual in the oil industry. So you'll have to be patient with Treaty while they progress through this.
Oil in Belize in June - pure fantasy.
Heavy rain in Belize today too marks the start of the wet season.
Flood warning have been issued by the Belize Weather Centre.
I still don't understand the Treaty decision on stopping exploration activity to buy and fit out a wireline truck after reaching TD on an exploration well.
Hardly any operating companies involved in exploration own their own logging unit.
Not renting one when the well reached TD has meant that San Juan #2 has been shut-in for 105 days now and, as it has proved impossible to log subsequently, it is not clear whether oil was found or not.
If they had rented a unit, logged the well successfully after reaching TD, confirmed the presence of oil and put the well onto production immediately, the well would only have had to produce 6 barrels per day over the intervening period to completely cover the cost of the rented wireline unit (at $60,000 US).
So - in my view - the men with impressive CVs seem to be taking some very strange operational and business decisions which could be slowing value growth for the company and shareholders.
You are not the first person to suggest that the Treaty wellsite in Belize often looks more like a parking lot than an oil exploration drilling location.
It seems the Government of Belize make mistakes too.
The Subsidiary Articles of the Petroleum Act of Belize 2003 specify wireline logs to be run and copies shared with GoB.
So I am surprised that you advise that GoB waived this requirement in another false economy that will cost us all in the long run.
It wouldn't have cost anything like that to hire a logging truck in Belize. Immediately Get a log of the whole well and not allow it to collapse in the meantime.
Rig is built by National Oilwell Varco I think.
This is one of the rental land exploration rigs available from Maranco in Iguana Creek Belize.
In answer to your question about a suitable rig.
The rig shown in the attached photo, which has just been set up by Maranco on the Perenco concession near Orange Walk in Northern Belize, is IMO more suitable for exploration oil drilling in Belize than the modified Schramm rig about to be used by Treaty Energy Corp to clean-out / deepen San Juan #2 well.
Exploration drilling in Belize is not like drilling to produce oil in an existing field in Texas, nor is it like the solid mineral exploration or water wells that the Schramm is more frequently used for. In oil exploration drilling there is much more uncertainty about what formations, pressures and drilling problems will be encountered.