OEL - (Otto) Multi based, Gambling Stock.

[jdg]

i have a rather red-faced confession: until recently, i was under the impression that we were going to drill sc55 before Aug this year. it was only in reading the quarterly that i noticed my error.

that does temper my anticipation for 2011 somewhat. i'm no longer holding my breath to hear from BHP in the near term - and that was one of my reasons for building my position up toward the end of last year. my research has rather let me down.

[cue the red face].

still, the story remains that same - just the timing has changed. for me, at least...

-j

[shasta]

i have a rather red-faced confession: until recently, i was under the impression that we were going to drill sc55 before Aug this year. it was only in reading the quarterly that i noticed my error.

that does temper my anticipation for 2011 somewhat. i'm no longer holding my breath to hear from BHP in the near term - and that was one of my reasons for building my position up toward the end of last year. my research has rather let me down.

[cue the red face].

still, the story remains that same - just the timing has changed. for me, at least...

-j

Its all about the ~1500 bopd from Galoc for now, & more $$$ in the bank ready to drill when Paul Moore arm wrestles BHP to the table

[jdg]

Its all about the ~1500 bopd from Galoc for now, & more $$$ in the bank ready to drill when Paul Moore arm wrestles BHP to the table

yip, it's a pretty good earn.
the downside is limited given we Galoc (and stage II, which seems to have been put on the backburner but should provide a significantly longer field life).

-j

[shasta]

yip, it's a pretty good earn.
the downside is limited given we Galoc (and stage II, which seems to have been put on the backburner but should provide a significantly longer field life).

-j

Reading between the lines, GPC makes the decisions for Galoc, & we control 38% of it, i'd say Galoc phase 2 has been put back to allow for the BHP deal.

Should that not go ahead, i suspect Galoc phase 2 will be fast tracked, I wonder whether NDO's finances are up to it though, maybe OEL via GPC will end up with some/all of NDO's share, given the Tindalo problems?

[boysy]

from my understanding they are just doing all the possible work they can on galoc phase #2 to insure its success. While phase #1 can be called a success the 2 wells have completely different flow profiles i belive 80% of the production is coming from one of the wells alone. The reason they are taking so long is they want to position the new wells at the best possible location to try and ensure this doest happen in phase #2. As per the bhp decision give matt a call or send him an email i find he is very prompt at replying to any questions put to him. Otto has started to evaluate other plays on the seismic so i think a bhp farmin could be sooner than we all may think just look at the poo and the economics of a find in the region. One would think bhp would not want to walk away from potential elephant territory simply saving a few dollars and if they do im sure other parties would step into the void potentially offering a better deal now the picture is a whole lot rosier. As per NDO situation i guess it all comes down to gindara if it is a filure they certainly will have difficulty getting their share of development costs it may provide an opportunity for galoc to pick up a direct share in the field. Perhaps GPC may want to buy out a portion of nidos share either way i think this would be seen by all as a positive.

[shasta]

from my understanding they are just doing all the possible work they can on galoc phase #2 to insure its success. While phase #1 can be called a success the 2 wells have completely different flow profiles i belive 80% of the production is coming from one of the wells alone. The reason they are taking so long is they want to position the new wells at the best possible location to try and ensure this doest happen in phase #2. As per the bhp decision give matt a call or send him an email i find he is very prompt at replying to any questions put to him. Otto has started to evaluate other plays on the seismic so i think a bhp farmin could be sooner than we all may think just look at the poo and the economics of a find in the region. One would think bhp would not want to walk away from potential elephant territory simply saving a few dollars and if they do im sure other parties would step into the void potentially offering a better deal now the picture is a whole lot rosier. As per NDO situation i guess it all comes down to gindara if it is a filure they certainly will have difficulty getting their share of development costs it may provide an opportunity for galoc to pick up a direct share in the field. Perhaps GPC may want to buy out a portion of nidos share either way i think this would be seen by all as a positive.

Any financial distress by NDO, could set up GPC to buyout the remaining rats & mice holdings - makes sense & would tidy up the convaluted JV & make the decision making process much quicker & easier.

The current oil price should benefit OEL in two ways, the BHP deal & the economics of Galoc phase 2

But for now its a waiting game, with the slight chance of a left field announcement from there new African "alliance"

[boysy]

yes i think the African "alliance" was a bit left field makes you wonder the deal must be rather good to be going after a asset clearly outside of the SE Asia region. You have to wonder if the bhp farm in does come through if this could not be another avenue for bhp to get a look in as well. We should have plenty to look forward to over the coming few weeks start of onshore drilling hopefully an update on seismic interpretation and new leads being looked at as well as an African update hopefully.

[shasta]

yes i think the African "alliance" was a bit left field makes you wonder the deal must be rather good to be going after a asset clearly outside of the SE Asia region. You have to wonder if the bhp farm in does come through if this could not be another avenue for bhp to get a look in as well. We should have plenty to look forward to over the coming few weeks start of onshore drilling hopefully an update on seismic interpretation and new leads being looked at as well as an African update hopefully.

I would suspect IF the BHP deal goes ahead, the package won't just be for JV funding, but a placement of shares to BHP for up to 19.9% to safeguard there investment.

Would cost them around ~$25m & would make sense, & this kind of deal is common & would indicate BHP's ongoing involvement for such a nominal amount given there vast cash reserves & easy access to capital.

OEL have shown with projects in Italy & Argentina they are prepared to look elsewhere for opportunities, although that was under Alex Parks, & i do see this african venture as a "backup" plan

[boysy]

That is an interesting possibility as you mention shasta seeing as oel have recently raised equity in sc 55 from 85% to 93%. You have to wonder what happened to frontier gas fields ltd who had the option to acquire interests in sc 55 and sc 69 after drilling ?

http://www.transasia-energy.com/curr...55-and-69.html

[boysy]

interesting to see ndo going backwards market expecting a cap raising headling into gindara will be interesting to see if otto will put its money to use in the short term.