Key word here is 'un-risked."
So, since we are repeating old information, it is worth discussing the risk, or Chance of Success. Fortunately, the RPS Energy report does this in great detail.
COS is defined (page 2) as "chance or probability of discovering hydrocarbons in sufficient quantity for them to be tested to the surface."
Calculation of COS for Bellevue (RPS Energy, page 49) is found by multiplying the Chance of the Play (12%; = Chance of Reservoir x Chance of Seal x Chance of Source/Migration, all individually estimated) times the Chance of the Specific Prospect (17%; = Trap x Charge x Reservoir x Seal), for a total COS of 2.04%.
Someone more expert in oil exploration may want to comment, but I guess these all need to be multiplied together to create an overall probability because all of these 'stars must align' to have a commercial field.
Using the 359M Barrels 'mean estimate' from RPS and $5/bbl used by Mr. Bendall in his calculation of lease value, we would get an 'expected value' of Bellevue as 5 * .0204 * 359M = $37M.
For Thunderbolt, the COS is 0.72%, which translates to 5 * 0.72 * 88M = $3M in expected value.
I think (hope!) $5/barrel is a very low estimate of profit, but I use it here because it is the number used by EEGC and Mr. Bendall in PRs. Note that if one used $50, which seems more reasonable to me, the combined expected value of the two sites would be close to $400M, compared to the company's current market value of under $10M and the $2.2B value used by the company ($5/barrel times the mean estimate, without applying any risk factor).
AI
