Flash blog from Morocco this morning to v briefly report on visit and yesterday’s news from Hurricane and Falcon.
Day 2 of the Sound trip to Morocco was a full field trip around all the Tendrara locations including the power plant and potential pipeline which links it to the field. 150km of pipeline through a flat desert is about as easy and as economic as it gets. We then passed over the water well before flying over TE-6, TE-7 and TE-5 which have been the backbone of the discoveries at Tendrara. After that we went to TE-1, TE-4 and TE-3 all of which are gas bearing and drilled between 1983 and 2006. We then went to TE-2 which was drilled for oil in 1965 by AGIP and was deemed uncommercial being only gas bearing. The reason for looking at the older wells is that it is not inconceivable that should more producing wells be needed these could be reopened and effectively recycled.
We then stopped at TE-7 to assess work in progress ahead of the highly significant EWT upcoming. As TE-8 is awaiting environmental approval the rig remains and all the work over and follow up is being done around the rig. Whilst we were there large trucks arrived with huge Schlumberger pieces of kit for the ensuing work which was most encouraging.
We then looked at the A1 structure and the Meridja permits as well as the Foum Agaye and Sidi Belkacem structure which was drilled as a gas discovery by Lonestar in 2000. In Meridja the targets are again the TAGI and the potentially exciting Paleozoic that I mentioned the other day. There will be much more to report as the trip continues I hope and with presentations from all senior management later today the large group of investors here should be totally up to speed.
Much more on Hurricane on my return but the announcement yesterday demonstrated the progress the company is making on Lancaster. HUR have selected the Technip (SURF) and FMC Technologies (SPS) alliance as exclusive providers of the subsea solutions for the Lancaster EPS. This is in preparation for the stated sanction date of the end of H1 2017. CEO Robert Trice is delighted with progress which already reduces scope and cost of the development. The work that the providers has already done endorses the development and this is also proof that new innovative financial structures are being thought up. Finally, if any more of a boost was needed the company tickled up the base case from 200 to 300m barrels of P90 which is still below my number but appropriately cautious.
Falcon Oil & Gas
A very brief word on FOG as the announcements from them and Origin were extremely positive yesterday. I have spoken to P’OQ and whilst he is aware that the moratorium may take a while. Origin is taking it very seriously. In terms of size this looks like a monster, as they have said not what you might expect in the first well of the programme. A lot of highly regarded work has been done on fracking and I sense that the consortium is cautiously optimistic about the outcome. Without prejudging anything if I was a Falcon shareholder I would be pretty happy although it will be a little while before concrete progress will be made.