Colter Drill, all approved or not?

Colter Drill, all approved or not?

It’s been approved, everything is fine and great, Colter will be drilled and will be a success….

Well, that’s one take on it, another take is that, yes the drill has been approved as per all the requirements up to this point. However the key approval has not be given. Let me explain.

The drill was always going to be approved in its current format. The approval that has not been obtained is an extension to the SAT Expiry date. This was, is and has always been the key part of the approval. Extending the Expiry date was always the get out of jail card, that the company could have used. This hasn’t occurred and more importantly can’t happen unless a new EIA is completed, this was confirmed to me in the various discussions I had with BEIS over the week.

Some kind of easy, quick, short cutted EIA could be used, however I would suggest that if this were the case they would have done that.

It has been suggested to me that Colter could just be over run by a few days, a small fine wouldn’t matter. This isn’t likely or possible. Ensco would not allow their rig to be used illegally outside of approved drill/operation dates. Insurance would not cover the rig or operation outside of the approved drill/operation dates. The companies reputation with BEIS would be trashed if they just ignored the dates. If they ignored the dates and an accident occurred the company would face serious criminal legal issues. Lets be clear about this, without an approved change in date, the date is like the Brexit date for the UK, set in stone, immoveable and the date after which the rig can no longer be in the bay and must be returned to its designated safe zone.

Let me explain why this is so important.

The drill according to the EIA, could take up to 45 days. The Drill according to the operator documentation is likely to be 30-45 days depending on wire logging, whether oil has been discovered etc.

As I write this on the 19^th of Jan, the rig is currently stationary of the coast of Scotland.

As from today the magic number of days left to the 28^th of Feb is 41 days.

As per the EIA, Kingfisher need to be made aware 14 days prior the rig arrival so that marine traffic in the bay can make plans. Assuming this was done on the 17^th (formal approval, it wasn’t done on the 16^th when I last checked). That means that the rig cannot even sit in position to start any kind of checks work etc until the 31^st of Jan.

This gives just 28 days for operations, hopefully folks can see that already we might have an issue.

As I said in my last blog, I have also been in contact with various groups in Dorset. There might or might not be various demonstrations, which would slow down operations. Anything such as a breakdown, accident, broken component would be a major problem.

Any winter storms would also cause a day or two of downtime.

Trying to fit a tricky drill into 28 days when you think it could take 30-45 days is not ideal, some might even say it would be insane to try.

The risks are far far higher that the drill might not complete, they might get close to the target but be unable to reach it, they might reach the target but run out of time to do wirelogging etc.

Why on earth would any reputable company take these risks? Why not just adjust the application to drill in November as per the original plan? If the drill has to be abandoned once started the total costs will almost double, having to come back in November 2019.

It seems insane to take these kinds of risks.

The purpose of this blog isn’t to try and deramp any shares, it’s not a comment on any of the AIM companies involved. If I am being generous it seems to be a problem that the AIM companies have been promised something by Corallian, Corallian have outsourced the operation to Fraser who have promised it will be drilled and nobody is prepared to go up the chain to say hang on a minute, probably due to legal contracts and promises.

I hope folks do their own research, everything I have mentioned above is in the public domain and fully checkable. At the end of the day this is just my own opinion, however always have your eyes wide open and don’t discount something, just because you don’t like it. This week’s news only reinforces my opinion of the drill. You never know the drill might go ahead, it might take place in record time, without any issues or they might get approval for an extension to the date. There are far too many "mights" in that statement for me though.