1. They have at least 160 million barrels of oil in the North Sea Bentley field (no politics, minimal transport issues, no ownership problems)
2. "the reservoir properties to be above the upper end of modelled expectations." Therefore there is a more than reasonable chance of an upgrade in potential reserves - possibly as much as 250 to 300 million barrels with a bit of luck. The CPR (Competent Persons Report) is expected any day. There is an Oilbarrel.com presentation by the company on the 13th January, I personally expect news before then.
3. Flow rate 2900 barrels per day, well above commercial viability range of c. 1200 barrels. Plus added reassurance from this weeks RNS, "In addition to the successful well flow test announced on 21 December 2010, high quality downhole pressure, temperature and sample data has been safely recovered following a 36 hour shut in and build up period after the flow test.'"
4. Estimated production of 15,000 barrels per day in 2011, 60,000 barrels per day 2013 + i.e. massive, stable cash flow for at least 15 years.
5. Bentley Alliance ensures that means to bring oil to market are in place with strong partners e.g. B.P.
6. £60 million Standby Equity Distribution Agreement (SEDA) with YA Global Master SPV Ltd ("Yorkville") to start field development and complete rig hire i.e. no funding issues. SEDA means shares have to be held for 4 months by Yorkville and are not discounted.
7. Oil price likely to be $80-100 range for the foreseeable future (heavy oil from Bentley 12% discount)
8. $100 million cost to bring field into production, but the company estimates only 50% of this is equity.
9. Broker estimates based on existing oil in place estimate of £6. Net present value calculations based on upside scenario indicate £10-15 share price range.
Just like Guinness, "GOOD THINGS WILL COME TO THOSE WHO WAIT". Ignore the derampers and shorters on the bulletin boards. Make your investment decisions based on facts.
Let me know if I've missed anything! Just bring on that CPR.
