EEN - Undervalued & Oversold

SHUJJA: that's right. At the AGM in May, Alastair explained that the existing Campo Rico seismic was (reading from my notes) a "patchwork", there was a "lack of definition" on the existing seismic, and that they "believe there is more potential on the Block". He also said that if the Campo Rico field (by which he meant the CR reservoir supporting CR #1/2/3, not the Block as a whole) were suggested by the 3D seismic to be bigger than previously thought, it would "probably need an additional drilling location", by which he meant that CR #4 (or whatever) could not be drilled directionally from the existing site. There was some discussion of directional drilling at the meeting, the view being that the existing three CR wells were "probably at the limit of directional drilling from the existing central location". It's worth noting that additional 'leads' in the Block (i.e. additional to Campo Rico and Vigia) had been identified ages ago from the old 2D seismic. So the new 3D seismic, in my interpretation of what Emerald have been doing, has been looking at four logical tasks:

(a) re-examining the size of the Campo Rico field
(b) re-examining the size of the Vigia field
(c) studying the other existing leads
(d) looking for and studying additional leads.

There's some fairly useful Campo Rico stuff in the two 'slideshows' on Emerald's website. The total amount of oil-in-place in the Campo Rico Block is unknown, but there was a 'recoverable' figure published some years ago of up to 60 million barrels, and if that were on a 30% recoverability assumption, it would seem to suggest that the gross figure (from Ecopetrol, I believe) may have been as high as 200 million barrels (200m x 0.3 = 60m). OK, I accept that this seemed to assume that the Mirador layer would be good at Vigia, and that layer was found to be wet at V#1, so it may be high for that reason alone, but on the other hand, the additional leads work the opposite way. I don't know the answers, but my personal feeling is that the figure in the 31.12.04 'Reserves' table doesn't really give much of an indication of the Block's potential. I don't think it's an elephant by any means, but I do think it's potentially a pretty strong cashflow machine, which can fuel Emerald up for other drilling works. And I think the previous board were probably also of that opinion, but they never had the time or money to find out. bob

imho DYOR etc