Reabold/Union Jack- 50 Shades of black.
The bears of West Newton have well and truly been burnt off this morning as the partners announce a ‘further significant HydroCarbon discovery ‘ with the B-1Z well coming in big time.
Every way you look at it the discovery is massively positive and could be the largest UK onshore discovery since 1973. The well encountered a gross 62m HydroCarbon bearing reservoir in the primary Kirkham Abbey target formation. Indeed, the overall column is estimated to be ‘at least 118m significantly exceeding previous observations ‘.
The key takeaway from this is that in my own view, the whole prospect has been de-risked by what is now effectively a 2.5km step-out. The second section looks like the first and has ‘evidence of good reservoir continuity’ so as it looks the same on the seismic it is one continuous reservoir.
This is backed up by the porosity numbers which at over 14% measured from log data across sections of the interval ‘comparing favourably’ with the A-2 well. In addition with no oil-water contact encountered in 118m this is unique.
I intend to write up more on both companies after I have had more detailed conversations with both managements in due course but this is a monster discovery by any measurement and it would probably be a commercial discovery offshore.
With RBD up only 20% and UJO 9% as I speak I think it is fair to say that the shares have by no means taken this find into account and they should both add meaningful market cap increases as bigger players get out the calculators…
Zephyr has updated the market and all is going well on the site of the State 16-2 pad where work is under way and the rig has commenced mobilisation.
The company has received the second tranche of the $2m of grant funds and CEO Colin Harrington is upbeat. ‘ we are on timeline as promised as we begin to unlock the considerable value from our Paradox project’.
Zephyr is getting close to action in Utah and the prospect is very exciting, watch this very closely…