88E Winx-1 Under the right light.

Based on the previous blog.

https://icebergshares.blogspot.com/2019/03/88e-winx-1-on-verge-of-greatness.html

We’ve had the RNS, TD has been hit, excellent. The news isn’t much different than previously announced. TD, as expected is a little bit lower than they thought but that just lends credence to the idea that the targets have been hit a little bit down dip than they thought/wanted.

To get the most out of the RNS though I think you need to read it under the right light.

88E is currently going through a highly valuable farm out. The data (3D), CPR reports etc will require whoever is going to participate in the farm out to have confidence in 88E, its geologists and its management. I know many think that Winx and the farm out are not connected, however they both  shed light on each other and each has a ‘financial gravity’ pull on each other.

The management had some criticism for its release first drill update last week. Its wasn’t very positive and mysteriously that has been counted by the ultra positive updates this week.

With Winx, 88E will want to maintain, if not enhance its reputation for the farm out. They will be very conservative. The very last thing they want is to backtrack on good news or try to explain away positive that hasn’t materialised. There is nothing to be gained by this.

To steer the RNS’s into the conservative territory, caveats will be used. Nothing will be released unless they are certain. This isn’t the way that O&G RNS’s are normally phrased on AIM.

The second light that needs to be used is that companies have primary and secondary targets for a reason. For Winx we had 3 main target areas. Seabee, Nanushuk and Torok. Seabee was a leap in the dark. Nanushuk was hoped for, but considered a risk and Torok was the safety net.

If we just take Torok to start with, it’s a secondary target, the top of it was at 4913ft and we can assume the bottom was at 6800ft were they stopped drilling. So 1887ft. Within this we had multiple pay layers as per 3D. The target layers comprised around 700ft of Torok targets. I would estimate that this might be 300-500ft of increased resistivity zones and C1-5 showings.

Torok is though a secondary target, if the primary target comes in it will, to some extent, be set aside. Interesting no doubt and still important to the wider area, but I doubt they will frack it in this hole unless they are not too interested in the primary target.

So the primary target, Nanushuk.. Obviously nothing new in this target.

“Encouragingly, we have also encountered multiple potential pay zones in the primary target as well as one of the secondary targets. Whilst it is still early days, we are well placed and look to the wireline program with measured optimism.”

The statement above is the most important as it confirms that multiple pay zones have been en counted. Looking at the measured optimism through the light discussed above, this is really as close to saying that they are as confident as possible.

Stage 1, LWD (ticked) as good as it can get.

Stage 2, Wire Logging. We know 10 days of Wire Logging, ending 16^thof March with a decision as to flow testing. Let’s be honest it will only take 1 maybe 2 days to Wire log Nanushuk. Torok, is a much bigger prospect and due to its tight oil nature will no doubt take a little longer maybe 3-4 days. 

I still think that N5 is more complicated, the potential water mentioned obviously still needs investigating, the company are hinting at a water/oil layer (oil layer sat under the top seal, water layer sat on the bottom seal and co-mingling in the middle). This could be quite productive, hence the careful examination.

We also have a consortium of companies. Any decision to flow test will be a joint decision and I would imagine some intensive meetings in day 9 and 10. Between this and flow testing a decision will have to be taken on the possibility of a side track.

Everything I wrote in the first blog stands for me. The SP has responded quite well with the completion of stage 1. The SP should continue to build steadily. A successful stage 2 will be all important as the net pay will be the first piece of solid news. The SP should respond even more positively after stage 2. Flow testing is the real biggy and a further increase should occur. A few folks will sell as we move along the stages, but volume is really quite small (less than 5% for the first day of news). Most are holding.

I do think that Winx and the actions of 88E are pretty much putting a For sale sign on the company. Wire logging news on the 16^th should correspond nicely with the farm out news and next 4-5 weeks will be an amazing time for people investing(not trading).

Look out for afternoon buying, from the US…..