Oil migration in Trinidad is West to East.
So in very simple terms, oil at Royston proves oil has not only migrated this far East (good for Krakken) but also its migrated through Chinook area, and so any updip areas of Chinook above the OWC are full of oil (and gas if a gas cap).
This is really what DYOR is all about. Looking at depth into things, what they potentially mean and seeing potential upsides before the rest of the market catches on.
Royston oil is in the Herrera 7bc. Chinook water (with some oil) was in the Herrera 7bc.
Royston oil had about 3% water cut, so at that depth its near the OWC, but still some way away from it.
Chinook water had some oil in it, so its some way below the OWC.
Simple 2+2=4 therefore that Chinook, having areas 1000 feet uppdip, if you allow for an OWC say 300 feet higher in the 7bc than where Chinook-1 drilled, means at the top of that 1000 feet vertically updip location you might have around 700 feet of oil pay.
Same for Royston, if at 10,700 feet they have slght water traces they are quite close to the OWC, but then if a lot of the 7bc is 10,000 feet, that means for a vast area of the Intermediate sheet at Royston area you have up to 700 feet of oil pay.
Chinook will be very commercial imo, being an onshore discovery with circa 30 to 50 million barrels recoverable - that is equivalent of an offshore discovery of 150 to 250 million barrels recoverable - given cost of development means onshore is worth 5 times offshore size.
Royston, looks vast, looks big. Could well be a 100+ million recoverable barrel size discovery, but it will need an appraisal well to open that up - which is of course Krakken-1 which will appraise the Royston intermediate sheet before going down to the potentially jumbo size Cretaceous below.
While everyone wants everything as fast as possible, here, you are going to have to wait.
Most important for TXP now is to get Coho online and then Cascadura online. Coho will provide a step change in revenue, adding 500K per month with 10mmscf/day.
When Coho-2 is drilled that pretty instantly moves up to 1,000K per month with another 10mmscf/day. I believe Coho-2 will be drilled in Q1 2022. Got to add more cashflow.
Cascadura adds initially at 90mmscf/day around 4,500K per month which is a massive change and then allows TXP to self fund everything going forward.
So TXP holders need a little patience to see us through to Coho-1 online, then Coho-2 online, then Cascadura ST1 and Deep1 online.
Then its all systems go for as much drilling as they can do.
I dont know what order they will drill.
For me, Guabine is last, this one would be tied into Chinook development, so its not really a rush, I would guess exploration drill number 3.
Steelhead, could be integrated into Royston development, so perhaps they might want to drill this first before submitting the EIA for Royston ?
However, with this very exciting oil discovery and the current very high oil prices they might want to drill Krakken-1 first ?
So whether its Steelhead-1 first or Krakken-1 first I dont know, all I surmise currently is that Coho-2 will be the first new well of 2022 in the Ortoire license area - with an additional 500K per month and it can be tied straight into production from discovery - thats a no brainer.
Get Coho-2 done by end of March 2022 and then :
Coho-1 + Coho-2 = 20mmscf/day production
March 2022 will see the new reserves report for year end 2021 (which will now include Cascadura Deep and Royston)
So by April 2022 very easy to go to the bank and increase the credit facility from 20m dollars to 50m dollars which then pays for Royston development and sees them through to Cascadura online.
Thats the path to zero dilution and maximized shareholder returns imo. Short term traders wont like it, but tough, they are not investing only trading.
