GCA info from an industry veteran

[jft310]

Poster was Stavros , post moved from option rays post on valuation

Thanks JFT for the endorsement

Anadarko's P/E Ratio is 23+

In terms of discounting the sale price, most projects are discounted based on the Owner's "Weight Average Cost of Capital" which is roughly 9% these days.

Also, in a few years IOC should have far more gas resources identified from the other pearls in the string.

HOWEVER, I believe there's a measurable chance that IOC will be bought out sooner rather than later ... certainly when the delineation wells are evaluated and maybe before the deal with Total even closes.

Most people in the industry realize that the PPS fall as a result of this stinker of a deal with Total doesn't accurately value IOC and the opening bid will be substantially higher than $150 per share. Gaffney Cline & Associates people who I know told me, based on the drilling information they've seen that's in the public domain, that there is most likely more than 10 TCF gas in E/A . It's been said that GCA's semi-public report said 2-3 more wells will enable them to recertify at the figures already estimated by GLJ.

TIME WILL TELL

[admin]

I posted this just now, but this is a better location. The essence is, GCA and GLJ don't differ all that much in their P10, but much more on their P90 and P50. I think most of that reflects the fact that GCA had one well less (that is, 33%) to work with.

- If you certify today, you would get 8.25Tcfe (the average of Gaffney's 6.6 and GLJ's 9.9)
- Gaffney's 6.6Tcfe doesn't include Antelope3, the report is from 2011, since Ant 3 proved continuity between Ant1&3 and its results were stellar, it's reasonable to assume the GLJ P50 number would go up when they have the chance to include these data.
- Their P10 numbers differ only by 14.5% (GLJ 11.9Tcfe, GCA 10.3Tcfe, Altendorf was off on the latter) whilst that P50 number differs 50%.

Could that be because they have basically the same understanding on the seismics and geological model, but GCA is just less sure, hence much bigger difference in P50 numbers versus the P10 numbers?

You might also want to look at the spread between P90 and P10.
- GLJ: low case (P90): 7.53Tcfe; high case (P10): 11.8Tcfe; a difference of 4.3Tcf or just 57%
- Gaffney Cline: low case (P90): 4.3Tcfe; high case (P10) 10.3Tcfe, a difference of 6Tcfe or 140%

Could the much bigger spread between P90 and P10 in Gaffney (140%) versus 57% in GLJ have something, or much, to do with the fact that they simply think less is proven as they had a well (33% data) less to work with.

Remember, their P10 numbers are relatively similar (just a 14.5% difference), so they basically agree with what EA could be. For Gaffney, much less is "proven" (that is, can be assumed to be recoverable with more certainty), hence the much bigger difference in P90 and P50 numbers, but most of this difference just reflects that they had a well less to work with.

[jft310]

I posted this just now, but this is a better location. The essence is, GCA and GLJ don't differ all that much in their P10, but much more on their P90 and P50. I think most of that reflects the fact that GCA had one well less (that is, 33%) to work with. - If you certify today, you would get 8.25Tcfe (the average of Gaffney's 6.6 and GLJ's 9.9) - Gaffney's 6.6Tcfe doesn't include Antelope3, the report is from 2011, since Ant 3 proved continuity between Ant1&3 and its results were stellar, it's reasonable to assume the GLJ P50 number would go up when they have the chance to include these data. - Their P10 numbers differ only by 14.5% (GLJ 11.9Tcfe, GCA 10.3Tcfe, Altendorf was off on the latter) whilst that P50 number differs 50%. Could that be because they have basically the same understanding on the seismics and geological model, but GCA is just less sure, hence much bigger difference in P50 numbers versus the P10 numbers? You might also want to look at the spread between P90 and P10. - GLJ: low case (P90): 7.53Tcfe; high case (P10): 11.8Tcfe; a difference of 4.3Tcf or just 57% - Gaffney Cline: low case (P90): 4.3Tcfe; high case (P10) 10.3Tcfe, a difference of 6Tcfe or 140% Could the much bigger spread between P90 and P10 in Gaffney (140%) versus 57% in GLJ have something, or much, to do with the fact that they simply think less is proven as they had a well (33% data) less to work with. Remember, their P10 numbers are relatively similar (just a 14.5% difference), so they basically agree with what EA could be. For Gaffney, much less is "proven" (that is, can be assumed to be recoverable with more certainty), hence the much bigger difference in P90 and P50 numbers, but most of this difference just reflects that they had a well less to work with.

Thanks STP , very important to get the basics right

[ltinvest]

I am correct in raclling the GCA number does not include any liquids either? SPA based on TCFe so those numbers would be higher?

[admin]

I am correct in raclling the GCA number does not include any liquids either? SPA based on TCFe so those numbers would be higher?

That's what I thought at first, as they are reported as Tcf, not Tcfe, but alas, the liquids are included.

[ltinvest]

So 8.25 TCFe average certification without the benefit of A3 for GCA. Now we drill 3 more delineation wells.

[Palm]

Yes, the liquids are included per footnote 2 of their reports. A question though that needs to be asked (and we are trying) is what is the 5.4TCFE "threshold" used by Total? Certainly is not all that Total thinks is there and I don't think it necessarily relates to P50. A threshold is that once crossed really gets you somewhere (no comments on the bride over the threshold please). So is this the mark that once you exclude the liquids and are just dealing with the gas to the LNG plant, gets you to the amount of gas needed to justify the minimum train size required by the PNG government. Hoping to get confirmation on that, but it well could be.

Any industry people here able to comment on that?

[jft310]

Anyone have the GCA report released on yahoo . ? STP is the best saver I know or PET

[Palm]

I have a copy of the 8 pages which were posted; nabbed it before it was jetisoned

[jft310]

I have a copy of the 8 pages which were posted; nabbed it before it was jetisoned

can you post ?lots of newbies here