14
Sep

EGY Brief

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EGY – Looking For A Future Golden Coast

  • Gabon, Angola now, looking for a third area of opportunity
  • 99% oil
  • $97 mm cash on the balance sheet
  • No debt
  • Around $50 mm cash last year and this year
  • Reserves – 12.94 mm barrels
  • TEV / Reserves on a $/ BOE = $18.60 / BOE, probably about right for them if they weren't so cash heavy and on the hunt for another play.
  • 2Q Production of 20,200 BOEpd just to give an idea of scale hear.
  • Gabon

    • Offshore is the beig piece with a 1.4 mm acres

      • Production comes from 3 offshore field via floating production storage offloading vessel
      • Drilling a horizontal well now as replacement well to an older well in a separate fault block, takes them up by about 3,200 bopd.
      • One new well coming on at 3,000 bopd in the 4Q
      • FPSO has 30,000 bopd capacity, currently seeing 21,000 bopd plus water, so at about capacity.
      • Two prospects to spud off Gabon in a deeper, and lower quality sand (Dentale) in 2H10 (20 mm BOE target) and 2011 (relatively big target at 85 mm boe).
    • Onshore

      • Joint Venture announced in August with TOT – to pay 75% for 50% in the 270,000 acre concession
      • They have 4 to 5 prospects worked up and TOT thinks they can find 100 mm boe on the acreage
      • TOT has a pipe that runs right by the acreage on the coast.
      • reprocessing seismic and will spud their first JV well next year.
  • Angola

    • Opened a data room last week to form another JV on the offshore Block 5
    • 1.4 mm acres in shallowish water
    • They have 3D over it and a handful of prospects.
  • Future: They want to earn a return on their cash. Sounds like they want to do a deal pretty soon, like in the next six months. Mentioned adding a third country in the offshore Africa trend or even going to the States, and there he mentioned the Bakken. That would be pricey.

Nutshell: Looking at multiple opportunities to "maximize shareholder value" while sitting on a pile of cash, no debt, and stable cash flow is just about never a bad thing. These guys strike me as hungry. Excited. Ready to run. I've come close to entering the shares a number of times. Look for a better write up than the book report above in the near future.

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