Transcript: Invictus Energy (IVZ) - World Class 8.2TCF + 247MBbls Gas Condensate
Invictus Energy is an independent upstream oil and gas company listed on the Australian Securities Exchange (ASX: IVZ). Our asset portfolio consists of a highly prospective licence, Special Grant 4571, in the Cabora Bassa Basin in Zimbabwe, one of the largest under-explored interior rift basins in Africa.
SG 4571 contains the Mzarabani conventional gas-condensate prospect, the largest undrilled prospect onshore Africa with an independently estimated 8.2 Tcf + 247 million barrels (gross mean unrisked basis) of conventional gas-condensate in a stacked target.
00:00 – Company Overview
02:39 – Business in Zimbabwe, Lead Times, Generation, Infrastructure
8:48 – Paying for Connection, MOU, Binding, Incumbents & Raising Money
11:43 – Funding Projects, Quantum, Margins & Contracts
14:52 – Assets: Is 2D Good Enough?
16:37 – Getting Finances for Projects, Putting a Number on 2D, Regulated Reporting on Data
21:31 – Targets, Technicalities, Cost & Fundings
29:35 – Getting More? License Holding Percentages & Being Carried
30:15 – Listing: US or UK Market?
34:42 – Outro
Scott Macmillan: My name is Scott Macmillan. I'm the Managing Director of Invictus energy. We are listed on the ASX, the ticker is IBZ. We are an Oil and Gas exploration company focused on Zimbabwe. Our primary asset is the Cabora Bassa project, which is located in the north of Zimbabwe. We've just completed an infill 2D seismic campaign and acquired 840km of data and preparing for a high impact basin opening drilling campaign in the first half of 2022. The Mzarabani prospect is an elephant sized prospect 8.2 Tcf and 247M barrels of condensate, which is one of the largest conventional targets going on globally so a very exciting period ahead for the company.
Matthew Gordon: Scott, lovely to meet you. Thanks for coming on the show. We're going to Oil and Gas today. We better break a few things down because there's a lot of moving parts which states potentially a very big project, big asset for sure. Give us a bit on your background.
Scott Macmillan: I've got a technical background, I'm a Reservoir Engineer. I've worked for a long time in Australia over here for Woodside who is Australia's largest Oil and Gas producer, and then also for Armour Energy, who we helped navigate into Uganda. And then most recently before Invictus at AWE and I was involved in the Waitsia Gas discovery, which is the largest onshore Gas discovery in Australia for the last 40 years. And that was fantastic to be a part of and great to develop and ended up ultimately being bought out by Mitsui and now being developed.
Matthew Gordon: You're Zimbabwean, you've worked in Africa, and in the industry as reservoir engineer. Have you run a public company before?
Scott Macmillan: No, this is my first-time public company seat but obviously worked for publicly listed companies before?
Matthew Gordon: Right, okay, how are you finding it?
Scott Macmillan: Look, it's been an interesting mix. I think, when you're running a public company, you've got a few different hats that you have to wear. Not only do you have to look after the project, which you used to doing as a technical person or in a managerial role, but you've got the capital market side is equally important. And so the measurement tends to be the share price but that's not always the be all and end all. It doesn't matter how well or how poorly things are going, that's how you're judged. So that's sometimes can be frustrating, but also sometimes very rewarding when you know when things are going well.
Matthew Gordon: Okay, well, good luck with this one. Let's talk about a few things that people might be disconcerted by. We've got lots of natural resource investors on this channel and viewers elsewhere, subscribers elsewhere. Oil and Gas is not an easy time over the past few years, things are looking up against the price of oil recovers. But Zimbabwe, that's a tough place to do business, isn't it?
Scott Macmillan: Yes, it has been. Historically it has been a very, very tough place to do business. I guess the differentiator for Invictus though is we've got a very, very strong local management team. As you mentioned previously, I am Zimbabwean, my family has been there for five generations. We know the jurisdiction very, very well. Our Country Manager Brent Barber actually ran mobiles expression campaign, the last oil company that explored in Zimbabwe in 1990. And then, on our board that we appointed earlier this year, as part of a strategic investor that we brought in a Zimbabwean strategic investor is Joe Mutizwa who's absolutely fantastic. He is heavyweight in business they ran Delta Corporation, which is Zimbabwe's largest listed company. He sits on the Presidential Advisory Council, was a former member of the Reserve Bank Board and so he's very, very well versed to doing business in Zimbabwe as well. So we've got a good mix of corporate and technical expertise involved with the project.
Matthew Gordon: Right, so lots of experience people on the board, on your operational team. But the question remains, is it easy to do business in Zimbabwe? Is it slower, should we expect longer lead times or have things changed with the new government?
Scott Macmillan: The things have changed considerably with the new government. I've been involved with this project now for nearly 10-years. And up until the change of government, we struggled to get it off the ground, to be perfectly honest. We couldn't get the approvals for the permits made. And because of the investment laws and environment there, it was impossible to do business there. Even if we had the permit, we wouldn't have been able to progress the project because it was inhospitable for investment. With the new government coming in that changed, they have bought in some great reforms that have now opened the country up to do business again. So they've rescinded the indigenisation and empowerment Act, which mandated majority government ownership of businesses. They brought in other attractive measures such as special economic zones, which treats you basically as an independent state within the country and provide a range of fiscal and non-fiscal incentives. And most recently, we signed a petroleum exploration, development and production agreement with government, which lays out a clear framework and a pathway for us to develop the asset on success. So they have opened the country for business, they are putting in the right performance, and allowing us to get on with the project so it certainly has changed.
Matthew Gordon: Right, so you are after gas and condensate, is that right?
Scott Macmillan: We believe that it's most likely to be gas and condensate from all the geotechnical work that we've done, from the chemical sampling we've done. The source rock and there's two main source intervals. There's the Permian and Triassic interval, are capable of generating both oil and gas. We believe from the modelling that we've done, that the source Rock has likely passed through the oil window and into the gas condensate window in the main fairway, but there's likely to be oil or gas generated in the basin. And in fact, we've recovered oil at the surface from some of the Permian samples that we took in July 2019 in our field sampling programme. So it can generate both, but we believe it's probably more likely a big gas condensate there.
Matthew Gordon: Okay, so there's a lot of operators in country actually, which is, I guess, a testament to how things have changed and the fact that they're still there. Does that suggest that there's an infrastructure as well? Because once you've found it, you've got to move it to somewhere? So can you tell us a little bit about because you're down there in southern Africa, inland so it's on land, but it's also inland, where does it go?
Scott Macmillan: Yeah and you touched on a very good point. Often, particularly with gas developments, you need a couple of things and that's infrastructure, and also the market more importantly. Zimbabwe, fortunately has both. Now, we've already signed a Gas Sale MOUs with two customers. One of them Sable Chemicals who manufacture fertiliser and they import Ammonia gas from South Africa by rail. And the second one is Tatanga Energy, who are a gas developer in West Africa and looking to enter into the Zimbabwe market. So the market side of things is quite good. That's 1.2 trillion cubic feet over 20 years for those agreements so that is substantial, underpin the project from a domestic point of view. On the infrastructure side, again, very well developed in Zimbabwe and still good infrastructure by regional standards. So what we've managed to build into our agreements with government is, with the paper agreement I mentioned earlier, is the easement and access rights for pipelines that come along with it. And to get it from where we are in Zimbabwe and to our market with Sable and Tatanga, not very far. So Sable are circa 350km from where we are, and you've got where Tatanga will place their facility and again, we're talking in a success case here, we're 100km away from the major interconnectors for the southern Africa part. So that enables the export of electricity anywhere from Cape Town all the way through to the Congo. So we see that as the first two building blocks of any development, because if we discover 8 Tcf or 4 Tcf of gas, it's an awful lot, which will require more than those projects.
Matthew Gordon: But I don’t want to get lost in too much data initially. So with those two MOUs, are they binding? Have they given you money, who pays for the connection, because 350km, I don't know what it cost per km but that sounds like an awful lot of money?
Scott Macmillan: So firstly, on the MOU, so they do have a couple of CPs, obviously, the major one being making a commercial discovery and proceeding with the development. So that'll be the first step. But because they're sophisticated gas buyers, they understand the risk. Sable were producing Ammonia by electrolysis, and they were the original green hydrogen company in the world and the only ones to really have done it at scale, with 100 megawatts of electrolysis that they use modern electric power. That became too expensive in 2014 and they've been importing ammonia gas since then. And they came to us, they've been searching for a source of gas for a long time and they came to us and they said, look, we understand this exploration phase, but we want to be at the front of the queue if you make a discovery. So putting that certainly together has been actually a very, very simple and easy process because there are sophisticated gas buyers, and they know what they're getting themselves into. We're not too concerned in that phase because there are frankly, no other suppliers. They've also got the backing of Africa Finance Corporation, Africa Development Bank, because they are the only manufacturers of fertiliser in the country. So the pricing works well on both ends. And, you know, so this is something that they'll get off the ground.
Matthew Gordon: Just sticking with the conditional component, which was, the assumption there is that they have not paid you money upfront, because there are conditions attached to the MOU. Is that right?
Scott Macmillan: That’s right.
Matthew Gordon: Okay, just wanted to be clear. So on the pipeline front, who would it be incumbent on, you getting contracts and raising money from whether African Development Bank etc?
Scott Macmillan: Yes, so Zimbabwe has already a number of pipelines and they've got competing pipeline proposals for developing infrastructure around the region because it's such a crucial piece of infrastructure. Zimbabwe serves as the gateway for a lot of the interior, where we've got fuel imported from Bara into Harare, and then distributed by road. And so the initial pipeline is too small, but you've got other competing pipelines to bring product to market. You've got some developers looking at gas from the Rovuma basin [00:11:25] in northern Mozambique, kind of bring it down to South Africa, which is 2600km distance. So, you know, 350 is shorter than most pipe runs in the rest of the region, and not a huge undertaking.
Matthew Gordon: Yeah, but you're an $18M company. In that context, it is expensive. So I’m just trying to work out, I would like you to explain to people how it works that you fund those things and what sorts of quantum are we talking about? Because people will be nervous, wow, if it's a $1M/km that's expensive. So give us some sense of the numbers and how it works.
Scott Macmillan: Yeah so firstly, that's really mainstream business and that's not our focus. So this would be a third party developed pipeline. And probably the best example that I can give you would be how the domestic gas industries developed in Tanzania. So you've got 2 pretty marginal or the smaller fields, Songo Songo and Mnazi bay. Those are sort of 300 to 500 Tcf fields, those pipelines were funded by a consortium of the IFC, International Finance Corporation, Africa Finance Corporation, and a Chinese group who built 450km of pipeline to take it up to Dar es Salaam. And those started off at relatively modest volumes of 20M cubic feet a day. That market has now developed to 200 million cubic feet a day because the industrial demand, one for power and two for gas for industrial processes has grown. And institutions like the Africa Finance Corporation are happy to fund those. And they become almost a newly type assets for governments and those midstream players, because they're backed by blue chip customers and Sable chemicals is one of those because they've got a long track record. And so that again, that's not something that we have a huge amount of concern.
Matthew Gordon: Right, so tell me how it works. Because I did some work in South Sudan, where all the Oil was, but the pipeline was through Sudan, they control the pipeline to the port, right. So in this sense, tell me more about these kind of whether it's whoever it's funded by a, IFC, African bank, etc, who controls that? And does that affect your ability to make margin going down the line? How the contracts work?
Scott Macmillan: So the contract will be taken pay, and the customers will pay the tariff.
Matthew Gordon: How's that set? How do you make sure that you're not seeing some increasing costs going, coming down the line, as it were?
Scott Macmillan: So, look, you've got relatively standard tariff rates in the region. And some good examples are the pipeline between Mozambique and South Africa, that’s the pipeline, that's 860km that is South Africa's soul. And we have really got into now that sort of where we ultimately see this project going which is into South Africa, which is a major gas demand centre well established transit fees through there and that's benchmarked and fairly typical around the region.
Matthew Gordon: Okay, good example. Let’s talk about the asset. I saw some press releases, you've been doing a lot of 2D seismic, I guess that's cheaper than 3D and you cover a lot more ground. But tell people why 2D is good enough to find what it is that you think you're after?
Scott Macmillan: Sure. So 2D onshore, for the types of targets, we are targeting massive structural targets. So we're not trying to find a subtle stratigraphic trap, these are big. And if you have a look at some of the seismic images that anticline is an absolutely enormous feature. It's 200sq.km under closure and that's why the numbers are so big, because it's a big feature. So you don't need 3D to identify the structure like that. And 2D onshore in the exploration phase really is good enough, because you shouldn't be trying to find something that you need 3D to define at this early stage. So we're focused on the structural traps. And we see a number of different types of the structural traps around. So we’ve refined that previous Mobil grid, which was around about 15km spacing, down to about 1.7km spacing. So that's more than sufficient to define the types of targets and they need to be commercial size targets as well.
Matthew Gordon: Numbers you have been throwing, it's more than commercial, you are way past that mark. So just wondering again, for a small company, how you go about doing it, because quite frankly, typically, when we've been looking there's anything over 1 tcf, am I okay, that's a starter for me, you're way past that. So how do you get the balance of saying trying to prove out, this thing is one of the world's largest basins, and it's all under our control, and look what we can recover, and getting cheap finance to get the things started to prove what you want to do. So I guess that's a factor of what your business model is here. So maybe you want to describe that for us? What is the model?
Scott Macmillan: So the model for us is to go out, and we'll be drilling the first wells in the basin this is complete [unclear] territory. So we need to go out, firstly, make a valid test the petroleum system to make sure that we've tested all the elements. But also with the size of the structures we're testing, we need to get above that sort of minimum economic field size from the first one or two wells to then carry on in that basin. So if that doesn't turn out, then we've got to go look somewhere else, to be honest. But we're confident in the size of the targets that we've got that if we are successful, then there will be commercial, and we'll get developed.
Matthew Gordon: Right, I do want to explore that further, if I may. But first, maybe just explain to people how it moves from all of this 2D work that you're doing, interpreting it and being able to put a number on it, just for the uninitiated?
Scott Macmillan: Sure, so with 2D seismic, we've acquired the central grid, so that will map the subsurface. And we have got about 5 perspective horizons within the basin so 5 separate stratigraphic geological sections that we're targeting. The main one that we're looking at is the upper Angwa. And we think that is the key and this is a low Triassic. And the key differentiator in the successful basins in this part of the world is presence of source rock in the lower Triassic and that's where the big discoveries in Madagascar have come from the bit of and some of our heavy oil, as well as in Ethiopia. Most of Permian we're interested in the Triassic and the way we progress that now we've got the previous Mobil data, which continues a little bit further to the west of our licence area, but ties into the outcrop of where the stratigraphy comes to surface. So we can track those geological horizons all the way through into the subsurface with the seismic. We then map the traps or the potential traps and from the area of it the estimated thickness of the formations that we're targeting we can estimate then what the potential sizes of those prospects are. So we're going through the process now of having that seismic data processed by Earth Signal in Canada. The early signs are very, very good. We're seeing some very, very interesting anomalies that confirm to structure, what you want to see from your seismic data. And once that is fully processed, we’ll interpret the whole dataset and then come up with an updated prospectively portfolio. So we've identified this big Mzarabani structure we're expecting to see a lot more though with that infill seismic grid
Matthew Gordon: Great and so again for slightly for the uninitiated here, we were going to maybe do this which is you produce some numbers, you've outsourced some of it. Where's the regulated reporting on that data and interpretation so the market can go do you know there's been validated?
Scott Macmillan: Yeah, that's a very important point because we are a small junior company, we're not just going to publish internal numbers, some do. When we first started with this project, and we put our first perspective resource estimate, we knew it was big. And it's so big that we thought it was very important to get an independent assessment of it done. So we had 2 done so we had one done by Netherland Sewell and Associates, and then also Getech group out of the UK, who are listed over there on the AIM. And they helped us also with the reprocessing of the gravity and aeromagnetic data that we integrated into the seismic interpretation. So they provided a second independent estimate as well, with our internal estimates NS&A and Getech they're all in there. So our numbers are independent and audited and done according to the what's known as the SPE Society of Petroleum Engineers, PRMS, the petroleum resource management system, so like the JORC, in minerals.
Matthew Gordon: Okay, so it's good for people to understand that. You've been doing that work, you've got some historic data which you've incorporated into your numbers. You talked about in first half next year, starting to drill on targets, so what again, have you targeted? What are you expecting to find? What are you looking for?
Scott Macmillan: Yeah, so part of the seismic processing work in interpretation will be to mature the location of the Mzarabani 1 well so identify the exact location and do the detailed drilling planning. What we're trying to do, because we've got 5 targets, we want to make sure that we hit all of those in the right spot to maximise our chances of making a discovery so that's the first point. The second one is we're also trying to identify additional prospectivity within the acreage and from the seismic data that we've acquired. The early signs look encouraging so we are aiming for 2 well programme next year. So drill a very, very big Mzarabani prospect, which if that comes in, it will be one of the largest conventional discoveries in any year that's drilled, but then also maturing some of these other still commercial but potentially smaller, creates a nice running refresh on success as well.
Matthew Gordon: As a public company, you can't afford to get it wrong. You don't need a duster on the first hole or the second hole. You’ve got to go for the most likelihood of success, because it sets the tone for the narrative and communication to the market. It says we know what we're doing. So again, does that affect the way that you go about doing this? Because when I speak to engineers and geologists, they say, well, the most sensible way systematic way is to kind of this is the order, but it won't, it'll feed information into future drilling, because you got to manage oil and gas fields, right? It's not like mining. You got to manage these things, you can get it horribly wrong. So are you conscious of the market component versus the how you would do it technically?
Scott Macmillan: Absolutely, if you don't get it right, technically, then there's no point. So getting back to what I said earlier, we want to make a test of the petroleum system with the well that we drill. So that means making sure that we are providing a better test of the ingredients that you need for work in petroleum system and putting a well on the location where we test the trap, reservoir source and seal altogether. So that seismic infill campaign has been important for us to refine that location to make sure that we get it in the right spot. There is always the market pressure to go and drill the biggest thing around, but that is not necessarily the right target to drill first up. Mzarabani though, has all those ingredients and the seismic data that we're seeing. It does make it the obvious candidate to draw and luckily, it's pretty big and substantial too. In their expression head used to take this approach where they made sure that the made a better test of the petroleum system, because you don't want to walk away with any regrets, and someone comes in after you and and uses that data and says, well, you didn't quite drill the right prospect or this is what the interpretation missed. So, we are making sure that we do that thoroughly and drill the right location.
Matthew Gordon: Okay, you're onshore that’s good news for costs. Talk to me about the depths that you're going to be drilling, the cost of that more importantly, and are you funded?
Scott Macmillan: Yeah so being onshore, very, very cost effective compared to offshore. And just to give you an example, so Total, who had been exploring offshore South Africa, they've made a couple of discoveries there off the south coast, Brulpadda and Luiperd. Those are comparable in terms of the volumes, so around about 5 to 6 tcf; very, very hostile conditions in that part of the world. The first attempt that they had to abandon because of the rig couldn't handle it in 2014 was $200M. And then they came back in in 2018 and re-drilled it for $150M. We are going to be drilling onshore similar size target, slightly bigger 8.2 tcf and 250M barrels of condensate and that cost estimate is around about US$12M. Let's call it $2M each way. So, the risk versus reward and the size of the prize for our players is fantastic. And that's why it's such an attractive opportunity and why I like to from a technical perspective, because it'd been de-risked, but also the sheer size of it. And ability to try something material for a very small amount of money relatively speaking on a gas terms. So again, we're focused on conventional resources. The properties that we're chasing conventional reservoir properties, we've measured the reservoir up the surface through the outcrop, fantastic porosity and permeability, and the depths of the primary target. So as I said, we've got 5 set targets, the shallowest is around about 800 to 1000m beneath the surface. And then the primary target, which is the upper Angwa, alternations of this Lower Triassic unit that I spoke of earlier, that top structure is around about 2700m. And we'll test that the plan is around about 3500, 4000m. So we're not chasing anything outrageous.
Matthew Gordon: No, okay, that's fine. And to the answer of are you funded for that?
Scott Macmillan: So we were funded for the long leads, and now we're going into the drilling phase. So we're at the moment, we are securing the rig and that'll be done fairly shortly. And ordering along leads and getting ready for the campaign in the first half of next year. On the funding side of things, we've got a two-track approach. Initially, when we started this project, we were much smaller company, you know, sort of $15M-$20M market cap company, trying to fund a drilling costs left up the route was the obvious way to go because of the look through dilution at the asset level and just the sheer ability to fund it. To be perfectly honest, trying to raise that sort of money as a company that size was virtually impossible. As we've gotten bigger and the equity markets have been far more receptive to oil and gas, particularly this year when we went to fund the seismic we went out for $6M to $8M and we got bids for $33M in 3 hours and shut the books and typically that's the hardest activity to raise money for because it's not particularly sexy in the market size. But I think with this project, because it's so material and so rare to have something this size in the juniors’ and have our equity position at 80% it's a very attractive proposition. And I think people can see that we're progressing and going through the drilling. So the process is still running to bring partners in and obviously I can't disclose anything because nothing's final, but that is still ongoing. And then we're confident of either funding it entirely ourselves or a combination of partnering and a little bit of the balance of the funding.
Matthew Gordon: Okay, so did you say you already have that 80%?
Scott Macmillan: Yes, we've got 80% if project and with the operator.
Matthew Gordon: I just wanted to make sure that all the conditions associated had been met and that you are today. And are you looking to get more? Would you think that's not likely?
Scott Macmillan: No so the remaining 20% is held by local partner there who is the original owner and we acquired an 80% stake in it.
Matthew Gordon: Okay, got it. And I know a little bit about what South Africa, what was the case in Zimbabwe that 20% is normal numbers?
Scott Macmillan: No. So, again, that's one of the reforms have been brought in by government. So they used to be a 51% mandated other government partner or local partner, but that was rescinded in early 2018. That was one of the first acts of reform that the new government brought in because they realised that it was stifling investment. So that 20% our local partner was the original licence holder, an applicant, and so we acquired that 80%.
Matthew Gordon: Right, but you could maybe buy them some more from them if you wanted to?
Scott Macmillan: Yes we could.
Matthew Gordon: I just want to make sure of what's possible, what's not, okay understood and are they fully carried?
Scott Macmillan: So they carry through the exploration first till the final investment decision.
Matthew Gordon: Okay, understood. I have listened to story, I appreciate it. And I sort of, you know, helicopter view of the story, but you want to start telling this to new audiences, I noticed OTC listing and Africa is typically better understood in London than perhaps North America, I mean what are you doing in terms of listings?
Scott Macmillan: So we're listed here in on the ASX and that's our primary listing. We just completed our listing on the OTC and that has been a very interesting market recently. I think for the Canadian viewers will be familiar with a company called ReconAfrica, who are listed there and have done spectacularly well. They are at a similar stage of maturity as we are in the programme, but they're capped at over a billion dollars, and we're capped at $80M. And they're exploring just on the basin from us in Namibia. So the OTC I think, has been a natural progression, it's a fairly straightforward listing process, and then not too much of a burden from a compliance or additional burden from compliance. There are a number of other ASX companies have gone that route ADA energy. And they, again, huge, huge volumes in their stock in that during that drilling period when they were turning over hundreds of millions of dollars a day. And so, it is a market that is receptive to oil and gas stocks. I think no matter where they're located, whether it's Africa or the North or anywhere else. London we have looked at before but it is looked at as a more difficult process. And you've got to come to them for the right reasons, I think. And if we're not going to be raising money, then there’s really no very little point, I think in listing in London for us at the moment. That may come later on, you know, post drilling when we need potentially bigger licks of capital because we don't need a huge amount for the drilling programme. So we haven't seen London as a must do for us. Previously, we thought that was a more natural home.
Matthew Gordon: Okay. I think the US you're right, you know, they invest in what you know, or like gas they know. And it's good for liquidity, possibly even on the ASX as well. London's getting back there but I don't think it's quite there on the oil or gas front but some good noises coming out of it. Brilliant, Scott, I enjoyed that, I learnt a lot about what you're trying to achieve, and the way that you're going about it. I Appreciate you coming on, stay in touch, just let us know perhaps when you start drilling, that’ll be exciting.
Scott Macmillan: Yeah and I think we've got a couple of things coming up, which would be sort of pre-drill, and maybe once the seismic interpretation is finished, and we can kind of run through where that sits and what the portfolio looks like ultimately, and what we're going to be drilling.
Matthew Gordon: Thanks for your time today. Have a good rest of the week. We'll speak soon.
Scott Macmillan: Thanks for having me, it’s been a pleasure to be on the show. And just want to leave you with a few thoughts going in. We're leading into a high impact drilling campaign and one that's going to be very closely watched. We're drilling one of the biggest conventional global targets globally, and that will be in the first half of 2022. Very, very cheap onshore drill, only $12M for an absolutely enormous prize, which is 8.2 trillion cubic feet and 247 million barrels of condensate so enormous scale and something that's going to be very closely watched.