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I have two comments and a question:
I‘ve been involved in a lot of wildcat and appraisal drilling, including 2 wildcats in PNG. The length of time it’s taken to drill Wahoo, Raptor and Bobcat is, to me, unusual, even highly so. We know the story with Wahoo. The other two wells may have similar issues. I seem to recall one well had been sidetracked a couple of times. That said, 6 months to drill relatively shallow (in today’s technology) wells – I have to ask why.
There are three scenarios: One, they are actually still drilling or trying to drill and having a helluva time and haven’t reached their target zones yet; two, the wells are being evaluated (with multiple zones, testing can be laborious and lengthy); or three, the wells are, in fact, finished and evaluated.
That leads to the question. When is any notification necessary under SEC regs? Asked another way, what constitutes a “material event”? Normally, drilling results are highly confidential and oil companies do NOT issue releases about them. However, IOC’s stock price appears to be event-driven and the investing world is watching these wells. Is that enough? There’s nothing unusual in an oil company drilling wildcats and having dry holes (normal outcome) or discoveries or indeterminate results and not telling anybody about it.
Second comment – someone said you can’t sell the company until you know what you have. That is not true. You’re dealing with a very tricky Mother Earth, with 5- or 8-inch data points miles apart. It’s all about risk assessment. Any offer will include a premium for risked upside potential. Although the picture will change with time and more data, at any stage of development, no one knows more about a particular piece of acreage than the operator.
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'Northoil' pid='48780' datel Wrote:
I have two comments and a question:
I‘ve been involved in a lot of wildcat and appraisal drilling, including 2 wildcats in PNG. The length of time it’s taken to drill Wahoo, Raptor and Bobcat is, to me, unusual, even highly so. We know the story with Wahoo. The other two wells may have similar issues. I seem to recall one well had been sidetracked a couple of times. That said, 6 months to drill relatively shallow (in today’s technology) wells – I have to ask why.
There are three scenarios: One, they are actually still drilling or trying to drill and having a helluva time and haven’t reached their target zones yet; two, the wells are being evaluated (with multiple zones, testing can be laborious and lengthy); or three, the wells are, in fact, finished and evaluated.
That leads to the question. When is any notification necessary under SEC regs? Asked another way, what constitutes a “material event”? Normally, drilling results are highly confidential and oil companies do NOT issue releases about them. However, IOC’s stock price appears to be event-driven and the investing world is watching these wells. Is that enough? There’s nothing unusual in an oil company drilling wildcats and having dry holes (normal outcome) or discoveries or indeterminate results and not telling anybody about it.
Second comment – someone said you can’t sell the company until you know what you have. That is not true. You’re dealing with a very tricky Mother Earth, with 5- or 8-inch data points miles apart. It’s all about risk assessment. Any offer will include a premium for risked upside potential. Although the picture will change with time and more data, at any stage of development, no one knows more about a particular piece of acreage than the operator.
Maybe someone is trying to steal this company.....The shorts haven't let up yet, and were very active yest, and you see the results today. fwiw
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This orchestrated theft has been ongoing for several years. Perps apparently unknown. The company has survived but the stock remains broken. The shorts still have control of this stock and they continue to do as they please. Their reign of terror must be close to an end but we are still in their grasp. We will win eventually but it may be a Pyrrhic Victory. They have killed us with time. We wait and wait and wait.
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'Northoil' pid='48780' datel Wrote:
There are three scenarios: One, they are actually still drilling or trying to drill and having a helluva time and haven’t reached their target zones yet; two, the wells are being evaluated (with multiple zones, testing can be laborious and lengthy); or three, the wells are, in fact, finished and evaluated.
For an exploration company, no news usually means bad news. As you say, a dry hole is normal for this industry, so I doubt it is a dry hole situation.
All I can think is that there has been a stuffup that is common to all 3 wells, and now they have to reorganise themselves with either different staff or probably better or higher rated drilling equipment.
No news after such a long time is making the company look very amateurish in its drilling execution, and that can easily lead to a loss of confidence and drop in PPS.
Whatever the problem is, it would be beneficial to inform the market about it and clearly say what is being done or planned to overcome it. Give the market a clear signal that all is still under controll. Controll gives confidence, and confidence leads to a stable share price.
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The CEO has stated more than once that the results of each of these wells will be disclosed when they have them.
It is a subjective issue to some extent, with some saying in general it depends on the effect on the financial statements; but the results of each of these wells is a material event for this Company and its stock, regardless of what the SEC might say. The analysts covering the stock call them high impact catalysts and consider them material.
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'Northoil'
Second comment – someone said you can’t sell the company until you know what you have. That is not true. You’re dealing with a very tricky Mother Earth, with 5- or 8-inch data points miles apart. It’s all about risk assessment. Any offer will include a premium for risked upside potential. Although the picture will change with time and more data, at any stage of development, no one knows more about a particular piece of acreage than the operator.
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I agree 100%. The "unknown potential" has value right now that can be assessed...and it would necessarily be included in any acceptable offer. The fact that it is "unknown" cuts both ways. Could a sale right now result in a price that turns out to seem "too low" if the purchaser later hits on fuure wells? Sure. But the amount someone might be willing to pay today would probably go down substantially if IOC doesn't find recoverable gas on any of the three wells.
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In the most recent conference call they specifically mentioned that they were nearing the target zone/depth. So I take it for what they say. They have released material information as soon as it was available. Example of this is the release of the new Chairman at 11 AM PST on a Saturday night.
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A takeover offer is a material event and would have to be disclosed to the market. We can in all probability discount the possibility of this hold-up as being caused by a takeover offer.
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We were told wells would be completed this quarter.and that Bobcat was nearing total depth. That was nine days ago. Almost impossible that they could reach total depth. take their samples and receive official results.
I assume that when you are near total depth that you must be in the target zone area and that you must be past the area where pressure is still the problem.. It would seem to me that if you are in the target zone you would know whether you are in gas, oil,or water or neither of these three. I think they have a pretty good idea what the results are. but I am not an expert.
If they are very close on Bobcat and know the results and are close enough on Raptor to have a good idea what the results will be, will they delay having full results on Bobcat so that they can announce both results at once?
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Laurie Brown flat out said on the call that the heavy mud they are using to control pressure, has slowed down the drilling
Is that the only culprit? Don't know - its been a pretty wet summer in PNG so maybe the heavy rains are an issue - again DK.. He also said on the call that the Orubadi is difficult to drill thru, including actual changes in the the hole diameter as the shale adjusts - are they casing properly? DK - But I do believe they are doing all they can to avoid a well problem, so I'm patient. I do know and believe they will announce each info on each well as it becomes avail - that has been stated numerous times.
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