POE.V - Pan Orient Energy

[valcont]

Not an exploration expert but when I look at the third party prospect report , it says the chance of success for the East Jabung is 20%.

 

http://www.marketwired.com/press-release/pan-orient-energy-corp-prospective-resource-report-anggun-prospect-indonesia-tsx-venture-poe-2044765.htm

 

Is that considered decent? Here is a good read about Chance of Success and how to think about expected value. At p.21 , you'll find 20-30% is the normal

COS for these kind of wells.

 

http://www.ccop.or.th/ppm/document/CAWS4/Risk%20and%20Exploration%20economy.pdf

 

 

[Cardboard]

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPOE-2499020&symbol=POE&region=C

 

Sounds very promising to me as they are preparing to start drilling already the 2nd well to meet the November 21 commitment deadline before testing is even finished on the 1st well!

 

Repsol would not spend a dime on this unless early indications from the 1st well mean a lot. They would at best finish testing on the 1st well before doing anything else considering that time is not an issue.

 

Cardboard

[Sunrider]

Hmm Cardboard, I'm not sure I read this note right, but did they stop drilling the first well or is it going to go deeper. I may have a completely wrong understanding here, but surely if the well struck meaningful oil or gas they'd know by know because it'd be coming to the surface, either from its own pressure or as part of the drilling fluid flowback?

 

I understand your enthusiasm but, unless I'm wrong re the above, or they are not complete with that well yet, it would seem that this first well is not a 'gusher'?

 

Thank you - C.

 

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPOE-2499020&symbol=POE&region=C

 

Sounds very promising to me as they are preparing to start drilling already the 2nd well to meet the November 21 commitment deadline before testing is even finished on the 1st well!

 

Repsol would not spend a dime on this unless early indications from the 1st well mean a lot. They would at best finish testing on the 1st well before doing anything else considering that time is not an issue.

 

Cardboard

[Cardboard]

I never said that the 1st well was a gusher. I am not a geologist but, it is not a dry hole either. However, I think that I know how to follow the money.

 

We know that Repsol was crystal clear that if drilling of the 1st well was disappointing that there would be no further testing on that well or a 20 some day period. Packing and going home!

 

Now instead of testing that well, they are going right away for a more expensive option or the drilling of a 2nd well. This was not the plan. It seems to indicate that they know already enough about that well and that they have enough confidence to commit further spending on that play.

 

The 1st well indicates that there are hydrocarbons in that area. The biggest risk for that stock was a dry hole and this is gone. Now, the question is how much oil & gas is there and is it economic to exploit?

 

I think it is very positive. Especially so considering that energy is still priced very low and that a large company like Repsol will allocate its capital very carefully in such environment. If they had not liked what they saw on the 1st hole, their commitment was over and they could have walked away. However, they didn't.

 

Cardboard 

[sculpin]

Malcolm Shaw opinion

http://hydracapital.ca/hydra-blog.html

 

 

By: Malcolm Shaw

 

(Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long POE.V)

 

In the oil exploration game, it's other never as simple as you might want it to be. Pan Orient Energy (last at C$1.81) released a drilling update on the much anticipated AYU-1X well and it would appear that the 'anticipation' is going to last a little longer as results were encouraging, but don't appear to be a clear-cut success. Preliminary analysis suggests that the well found "5.5 metres of high porosity net oil pay at the top of good quality reservoir in the Batu Raja limestone", which was the primary target interval in the well. That interpretation is supported by wireline logs, pressure data, and oil samples, so that's about as much confirmation as you're ever going to get without a flow test. Pan Orient went on to say that, "significant indications of hydrocarbons in the form of oil shows and high gas readings in well-developed sands of Gumai age were also found". That might mean that Pan Orient is close to something of interest in the secondary Gumai-age target interval, or it might mean that oil has simply swept through the structure at that level.

 

The well reached a total depth at 1,140 metres in granitic basement an August 21st, which was about 400 meters shy of the projected total depth as indicated on the drill curve in the company's corporate presentation. To me, that suggests that the structural interpretation was off by a fair bit, as the well was TD'd before the projected top of the Batu Raja (which was pre-drill estimated to be at 1,200m depth). It's unclear what implications that may have for the greater structural complex.

 

Based on the results of the AYU-1X well, the partners have elected to drill a sidetrack (ELOK-1X) to a subsurface location about 700 metres south where they aim to evaluate a possible thick wedge of Lower Talang Akar sandstones that are on-lapping the AYU-1X high and thus could be oil charged. The well is expected to take 30 days to drill.

 

So what does it all mean? For one, the presence of oil in highly porous Batu Raja limestone is a very good thing. It means that the development of reservoir in the Batu Raja interval has been proven and that oil has migrated into it. However, 5.5 metres of porous limestone may or may not cut it in the jungles of Indonesia. I ran some quick math on 5.5 metres of oil pay assuming 25% porosity, 75% oil saturation, and 30% recovery and I can end up in the ballpark of 3-5 mmbbls recoverable per square mile. That may or may not work, depending on a number of factors, including development costs and the prevalence of porous Batu Raja limestone in the area. It also remains to be seen where thicker Batu Raja oil pay might be found, if anywhere, in the greater structural complex. In a nutshell, I would say that more information is needed via updated mapping and/or additional drilling.

 

However, if the Lower Talang Akar sands are found to be both thick and oil-charged in the ELOK-1X sidetrack, the odds of commercial success are likely going to look a lot better. Just 30 more days of waiting... here's hoping they find a nice thick section of oil-charged Lower Talang Akar sands.

 

In the meantime, investors are left on edge again, waiting for more data. I have sold some of my stock this morning (for a small gain relative to my most recent purchase price of $1.60) in order to reduce my risk as the hopes of a thick Batu Raja oil hit on the first well is off the table, but I'm definitely keeping one foot in the door should the ELOK-1X sidetrack come up with the goods. In light of the oil pay encountered in the Batu Raja limestone, I would imagine that the partners will also be trying to find thicker Batu Raja reservoir in a structurally favourable position... surely that will be one of the topics at the upcoming partner meeting.

 

Stay tuned.

[rkbabang]

Down another 9+% today.  I just purchased some more.  I don't understand the way this has been trading the last few weeks.

 

[Cardboard]

Same here on both counts.

 

Cardboard

[Paarslaars]

Doubled my small position but I've had nothing but wrong calls this year.  :P

[rkbabang]

No new information, but a good summary of the current situation.

 

Small-Cap Oil & Gas Companies Positioned for a Market Rebound

 

TER: Can you update us on Pan Orient Energy Corp. (POE:TSX.V)?

 

BN: A few weeks ago, Pan Orient drilled a high impact exploration well on its East Jabung block (49% W.I.) in Indonesia. Recall that in 2015, Pan Orient farmed-out 51% of its 100% interest in East Jabung to a subsidiary of Talisman Energy Inc. (now a subsidiary of Repsol). In return, Pan Orient received an US$8 million cash payment and Repsol funded the first US$10 million of the cost of the AYU-1X exploration well. In late August the AYU-1X well was drilled to a total depth of 1,140 meters and encountered 5.5 meters of net oil pay within the Batu Raja formation, which was the primarily target. Although the net pay is thin, the reservoir was thicker than expected.

 

The AYU-1X well also encountered good oil shows in well-developed sands in the Gumai formation, which was the secondary target. AYU-1X well location was selected to target the Batu Raja and so it wasn’t an optimal location for the Gumai formation. A more optimal location for the Gumai formation is located to the north on what’s called the Anggun structure. We think it’s highly likely that the Anggun structure will get drilled next year, after the construction of a new drilling location. In the meantime, the joint venture partners are currently drilling the ELOK-1X sidetrack from the AYU-1X wellbore targeting Lower Talang Akar sandstone, which laps onto the AYU high. Drilling could be completed by the end of September and will qualify as the second commitment well, so it will complete the first phase exploration well commitments for the East Jabung block.

 

So, to sum up: the AUY-1X exploration well encountered thicker than expected reservoir in both the Batu Raja limestone and the Gumai sands and proved hydrocarbon charge into the Ayu/Elok/Anggun complex, which was the largest pre-drill risk. The ELOK-1X sidetrack well is a high-risk well but will fulfill the first phase drilling commitments on the East Jabung block and next year we expect Pan Orient will drill the Anggun prospect, which has been somewhat de-risked by the results of the AUY-1X well. If successful we see big upside for the stock price.

 

TER: Thank you for your time, Bill.

[rkbabang]

Pan Orient Energy Corp.: ELOK-1X Drilling Update

 

"The East Jabung Production Sharing Contract (“PSC”) ELOK-1X exploration well has reached a total depth of 1,236 meters true vertical depth ("TVD") within weathered granitic basement at a sub-surface location approximately 700 meters southwest of the AYU-1X location.

 

The top of the primary Talang Akar formation sandstone objective (primary target) was encountered at 1,169 meters TVD and found to be non-hydrocarbon bearing. The Batu Raja limestone, not a target at ELOK-1X, was encountered approximately 26 meters structurally lower than at AYU-1X exhibiting high mud gas readings and oil stained carbonates in the upper portion.

 

Preliminary interpretation of the LWD logs confirms the findings of AYU-1X within the Gumai sandstone formation. Significant indications of hydrocarbons in the form of oil shows and high gas readings were observed while drilling well-developed sands of Gumai age at both wells.

 

Based on the results of the AYU-1X and ELOK-1X exploration wells, Pan Orient management is very encouraged regarding the hydrocarbon potential of the ANGGUN-1X location that is approximately 5.6 kilometers to the north west of AYU and 80 meters structurally up dip from AYU-1X t the Gumai sandstone target level. The timing of further drilling activities in the PSC will be one of the main topics of discussion at an upcoming partners' meeting scheduled for early November 2017."

 

[Cardboard]

It is a 2nd confirmation that there are hydrocarbons in the play which is positive however, it is also the 2nd time that their estimate of what is underneat is way off: first time depth, now primary target or Talang Akar being non-hydrocarbon bearing.

 

As someone pointed on Stockhouse, they used this time the terms "very encouraged" instead of just "encouraging" in the last press release. Maybe just corporate bs but, who knows?

 

What Repsol will do and when seems to be the question? The Gumai formation seems to be the thing as confirmed now twice. Moreover, drilling of the Anggun location is key to determine the value of this play or as was speculated by some following the drilling results from the first well. However, this will require an access road and POE will need to spend its 49% share to get this well drilled depleting one of their assets or cash.

 

The market has already factored in the risks from that this morning and the value assigned to the play is near $0. Let's hope that the exploratory well in Thailand on their producing land being drilled in October will yield a positive result to raise the value of their other assets as protection against a complete write-off in Indonesia. 

 

Cardboard 

[rkbabang]

It is a 2nd confirmation that there are hydrocarbons in the play which is positive however, it is also the 2nd time that their estimate of what is underneat is way off: first time depth, now primary target or Talang Akar being non-hydrocarbon bearing.

 

As someone pointed on Stockhouse, they used this time the terms "very encouraged" instead of just "encouraging" in the last press release. Maybe just corporate bs but, who knows?

 

What Repsol will do and when seems to be the question? The Gumai formation seems to be the thing as confirmed now twice. Moreover, drilling of the Anggun location is key to determine the value of this play or as was speculated by some following the drilling results from the first well. However, this will require an access road and POE will need to spend its 49% share to get this well drilled depleting one of their assets or cash.

 

The market has already factored in the risks from that this morning and the value assigned to the play is near $0. Let's hope that the exploratory well in Thailand on their producing land being drilled in October will yield a positive result to raise the value of their other assets as protection against a complete write-off in Indonesia. 

 

Cardboard 

 

Yeah, It looks like another 6-12 month wait, at least, before anything is known for sure in Indonesia.  I'm not sure I'd read much into the use of "very encouraged" vs. "encouraging".  That might not mean anything.

 

[Sunrider]

It is a 2nd confirmation that there are hydrocarbons in the play which is positive however, it is also the 2nd time that their estimate of what is underneat is way off: first time depth, now primary target or Talang Akar being non-hydrocarbon bearing.

 

As someone pointed on Stockhouse, they used this time the terms "very encouraged" instead of just "encouraging" in the last press release. Maybe just corporate bs but, who knows?

 

What Repsol will do and when seems to be the question? The Gumai formation seems to be the thing as confirmed now twice. Moreover, drilling of the Anggun location is key to determine the value of this play or as was speculated by some following the drilling results from the first well. However, this will require an access road and POE will need to spend its 49% share to get this well drilled depleting one of their assets or cash.

 

The market has already factored in the risks from that this morning and the value assigned to the play is near $0. Let's hope that the exploratory well in Thailand on their producing land being drilled in October will yield a positive result to raise the value of their other assets as protection against a complete write-off in Indonesia. 

 

Cardboard

 

I’m not a geologist, but given that oil and gas are created by compressing rotting plant matter, isn’t it quite likely that you find some trace of hydrocarbons when you sink a well in a tropical regions? I mean management will put whatever marketing blurb out they can get away with so of course they will be encouraged but this well seems to be ‘dry’ to me - number 2. So whilst there is oil there somewhere, how many more wells are they going to drill around the holes in the cheese until they finally hit that hole?

 

All a bit promotion for people to keep paying their salaries from investors’ money?

Dead money until end of next year (presuming Repsoal agrees to drill more over the next 12 months)?

 

Thank you fo your views

[SharperDingaan]

The press releases are telling you that they found reasonably accessible oil trapped under a cap of non porous Lower Talang Akar Sandstone. The Bata Raja payzone is a wedge (over a 700m stretch it changes from 41m to 5.5m) sloping upwards, & geophysics will have given them some idea as to its width.

 

Carve a road, drill it, and connect to a collection facility will be expensive; the wells life will also be on the shorter end as the porosity favours extraction, accelerating depletion. There's a lot of payzone, but its essentially shut-in without collection access (Repsol?). POE would also be footing the development - against a CF stream that is both uncertain & which would not occur until quite some time in the future (crushing both PV, as well as possibly creating a negative NPV).

 

It would seem much likely that POE would simply get bought out by Repsol; probably at a good price for what's there now, but a lot lower than what it might have been were the well developed. Net, net it adds up to no real change; hence the poor POE stock performance.

 

SD

 

 

 

   

[Cardboard]

Lol!

 

The key is to watch Repsol's actions. The head of exploration has multiple exploration opportunities worldwide, a limited budget and his or her incentives is to find economical oil/gas for the company. That is what drives hir or her salary, promotions, etc. A big find in Indonesia (relatively speaking) would not even move the stock price.

 

So if they decide to drill a 3rd well in November that will tell you all you need to know about the success or failure of these first two wells.

 

Cardboard

[Cardboard]

Well, Repsol must see some strong potential since they have accepted to drill a 3rd well.

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPOE-2532383&symbol=POE&region=C

 

Cardboard

[rkbabang]

Well, Repsol must see some strong potential since they have accepted to drill a 3rd well.

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPOE-2532383&symbol=POE&region=C

 

Cardboard

 

Looking good. The company is in good shape and not overvalued even without the optionality of a big hit in Indonesia. It looks to me like a case of A) We win or B) We don't lose (or at least we don't lose much).  Now we wait.

 

[wachtwoord]

Has anyone been following this in depth in the meanwhile?

[Cardboard]

Still holding and the gusher is supposed to be drilled in September with Repsol.

 

I thought you did not invest in stocks anymore. Too boring. Just Bitcoins?  ;D

 

Cardboard

[rkbabang]

Still holding and the gusher is supposed to be drilled in September with Repsol.

 

I thought you did not invest in stocks anymore. Too boring. Just Bitcoins?  ;D

 

Cardboard

 

I'm still holding as well (both POE and BTC).

 

[wachtwoord]

Thanks for the update. Drilling is still set to in september then, I'll put an alert to look how that turned out then.

 

My stock portfolio is in my signature (with exception that UPGI was bought out last week and COMX will soon follow).

[Sunrider]

Is anyone still invested in this? I followed the discussion around the time of the last test drill results and wondered what people make of the recent results/announcements?

 

Thanks!

[Cardboard]

I am. This Thailand discovery significantly de-risk the thesis.

 

So even if they find no oil in Indonesia, I do believe that current price is well covered by cash held + Thailand.

 

I assume zero value for SAGD project.

 

Cardboard

[sculpin]

PAN ORIENT ENERGY CORP.

POE (CAD$1.43) – Target: $3.26 – BUY

[PDF]Follow Up Appraisal Well In Thailand Successful

6 pages

Action: Maintain BUY And $3.25 Target

This morning, Pan Orient (“POE”) announced that the follow up L53-DD2 appraisal well in Thailand encountered ~32 metres of net oil pay. Production testing of the L53-DD1 discovery well and the L53-DD2 well is expected to commence early next week. We maintain our BUY recommendation and $3.25 target price on the company’s strong financial position and high-impact exploration potential in Indonesia.

Details: Thailand Drilling Update

Thailand: L53-DD1 Exploration Well and L53-DD2 Appraisal Well Update: On October 23, 2018, POE announced that the L53-DD1 discovery well encountered 26 metres of net oil pay within three sandstone zones, between a true vertical depth of 960 to 1,125 metres. Logs indicate a high quality sandstone reservoir and the oil has an estimated gravity of 28° API. The discovery well is located ~28 km to the north of any existing producing wells on the L53 Concession (50.01% W.I.) and ~5 km to the south of the U-Thong oil field (Figure 1) located on the adjacent concession which has produced ~4.5 million barrels to date. Today, POE announced that the L53-DD2 follow up appraisal well was successfully drilled to a target ~26 metres up dip from the L53-DD1 discovery well. The well encountered approximately 32 metres of net oil pay within four sandstone zones, between a true vertical depth of 1,044 to 1,105 metres.

 

Production Testing To Commence On November 18th: POE has received government approval for a 90 day production test for the L53-DD1 discovery well, with testing expected to commence on November 18, 2018. The company has submitted an application for a 90 day production for the L53-DD2 appraisal well, with testing expected to commence at approximately the same time as the L53-DD1 well. Initial results are expected seven to ten days after testing commences.

 

Indonesia – East Jabung PSC (49% W.I.) To Spud in Q2/19: In 2017, POE drilled two exploration wells (Ayu-1X and the Elok-1X) on the East Jabung block that proved a working hydrocarbon system in the region. The follow up Anggun-1X well is located ~5.6 km to the north west of Ayu-1X well and ~70 meters structurally up dip at the Gumai sandstone level (Figure 3). The well is targeting both the Batu Raja formation and the same well-developed, porous Gumai sandstones reservoir encounter in the Ayu-1X and the Elok-1X wells, but much closer to the crest of the large structural closure. On November 5, 2018, POE announced that construction of the Anggun-1X access road had commenced and the well is expected to spud sometime between March 15 and May 15, 2019. The well is expected to take approximately 30 days to drill and POE plans to immediately commence a testing program with encouraging drill results. The estimated dry hole cost is US$15.4 million or US$7.55 million net to POE’s 49% interest.

Impact: Positive. New Discovery Likely To Boost Thailand Production

The L53-DD1 discovery well and follow up appraisal well have the potential to add material production that could fully fund an expanded drilling program in 2019 but the big potential upside for investors is the Anggun-1X exploration well to spud in Q2/19. We maintain our BUY recommendation and $3.25 target price.

 

 

  By Bill Newman – 2018/11/12

 

Copyright © 2013–2018  Mackie Research Capital Corporation, All rights reserved.

Our mailing address is:

199 Bay Street, Suite 4500, Commerce Court West, Box 368, Toronto, Ontario, M5L 1G2

[rkbabang]

I'm still holding and still waiting as well.  If they make a big find in Indonesia the stock will be worth significantly more than it is now.  If they don't, it will still be worth around where it is trading now (although it will probably drop some).  This stock is not a zero in any case.