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Well Chef, hopefully the drill campaign planned will leave no unanswered questions, and will once and for all allow Barryroe to be developed and shareholders to be rewarded accordingly. Then we can look to the other birds in the bush and make investment decisions based on the future potential.
That's the distinction I was wondering about, Manyana.
In other words, PVR's partners are joint operators, not joint shareholders.
My bird in the bush is not Avalon but the undrilled Barryroe Upper Jurassic which tie into both Kinsale and Helvick shales.Heres the introduction to a speech by Boldy back in 2014
http://geoscience.wales/2014/09/talk-at-the-gallery-the-north-celtic-sea-basin-a-resurgent-proven-hydrocarbon-province/
If we assume EXOLA equates to Barryroe then APEC have a 50% working interest in its assets but Providence still owns 100% of EXOLA's shares.
So, in effect, Providence could sell EXOLA to a third party without the consent of COSL but they would have to guarantee that the new owner honoured the financial terms and the potential for COSL to take control of the development of Barryroe.
So a two way route for Providence. Stick with the development of Barryroe and alternatively sell EXOLA to a third party, probably APEC but technically anybody who wants to buy.
All we need is that pesky survey and the drilling to really get this baby flying.
s.
Of course I like your idea, Manyana.
The part I didn't get in your earlier post is that you seemed to be assuming that PVR would have a free hand, and in your latest post your calculation is based on 100 per cent ownership.
I thought the deals done so far have reduced PVR's interest well below that and it no longer has a free hand.
Manyana, do you have a back of the envelope view on what SLE's 4.5% NPI in BarryRoe might realistically be worth, on a successful appraisal this year?
I am saying exactly that if Barryroe comes good, Providence will have a cash flow to generate and develop the rest including Spanish Point and Avalon without recourse to third parties. They would have he capacity to borrow billions to develop others out of the potential cash flow from Barryroe.
Just look at Tullow who have billions of dollars debt but huge reserves so their debt is totally manageable and yet started up as a mickey mouse Irish company years ago through an accountant, Aidan Heavey, who went on to Aer Lingus and then founded Tullow which developed into one of the largest European oil companies.
After all, if there is 12billion barrels in Avalon that will make it the largest oil well in Europe and just consider the value of that so why would you sell it? Given the usual value of $5 a barrel for oil in the groundthat would equate to $60billion. That would make each of our shares worth $100. So why sell the company and at what price?
Why can't Providence become a major oil company which would be possible if they strike lucky with Barryroe and have the foundation to become a self-independent major oil company?
And just a further note on a point I made yesterday regarding the buy back of shares by San Leon. I read today that Toscafund, like myself, will not participate in the buyback because they reckon San Leon shares will be worth far more than the buy back in the future especially if Barryroe comes good.
No I think he is saying get as much as you can for Barryroe (Exola)and use it to fund other projects without giving away the kitchen sink.
You mean that PVR would develop other assets in collaboration with its partners and share the income - instead of selling off assets for a few $ per barrel?
So Sobeit whats are the odds?(:
Actually, COSL already technically owns 50% of EXOLA because all of Barryroe is in there and they own 50% of the project.
The whole idea of Providence setting up EXOLA and putting Barryroe in there was exactly to be able to sell it off by just selling its shares to a third party.
That way, the rest of Providence remains an independent unit and if Avalon comes up with 12billion barrels, what price will somebody pay for that, especially if it is proven after Barryroe goes active? You are talking billions of pounds with a share price in the heights.
Let me give you an example. In the 1970s I bought shares in an oil company called Keywest in Australia for peanuts. They were taken over by Woodside and about 8 years ago I sold the Woodside shares for AU$44 a share.
That is the game we are playing. Prove up Barryroe and if successful use the revenue to develop Avalon and others making Providence a "major" oil company which was Daddy's objective and intention ever since he set up Atlantic in 1981 when he stated he wanted to be the J. R. Ewing of Ireland (aka Dallas).
Well not really
Longwait that's true. The question is will the Chinese want Exola, or will someone else want PVR including Exola. While I do like a game of chess I think that PVR are Donald Ducked if Barryroe is anything but special. All other prospects are a secondary bet. However that's only my opinion.
Thanks for your replies, Cagney.
Interesting that you mention Exola.
If a bid were made for Exola, but not PVR, then what happened at Avalon would be relevant...
Thanks for your replies, Carney.
Interesting that you mention Exola.
If a bid were made for Exola, but not PVR, then what happened at Avalon would be relevant...
Saw the article, earlier today,....Diablo, waiting in the wings, for ExxonMobil and China's Nexen (CNOOC) IOLAR drill results,....Dunquin South prospect,.....Newgrange prospect,etc,.....kicking off, with flagship "Barryroe";-
https://www.irishexaminer.com/breakingnews/business/providence-sizing-up-west-coast-drilling-campaigns-905356.html
Extract : "Providence is set for a busy operating period over the coming three years; starting with a long-awaited commencement of drilling at its flagship Barryroe field in the Celtic Sea in the third quarter of this year."
BW
Sure is a slow boat from China...
I hope not Longwait. Success there would be a nice followup to Barryroe. Concensus however would suggest a takeout for PVR (or just EXOLA) if Barryroe shines. So it may be irrelevant unless you have shares in one of the majors.
You think it could contain 12 billion + barrels equivalent of water?
Longwait, with all the positives for Druid / Drombeg including Schlumberger it was still a wet drill. Cos for Avalon is 1 in 10.
'The last assessment of the Avalon prospect - back in mid-2017 - placed a 12 billion barrel resource estimate on the asset, but that figure could be eclipsed if the new data proves positive.'
Could new data mean an increased probability of success, or merely an increased number of bboe in the event of success?
Sorry to strike a sceptical note, but do we have reason to think that this time we will strike gold and it won't turn out to be another Druid /Drombeg?
I'm talking about Avalon.
Providence sizing up west coast drilling campaigns 18/02/2019 - 06:14 By Geoff Percival Providence Resources is hoping to start drilling at its highly-rated Avalon prospect, off the west coast, in 2021. The Government approved Avalon's conversion from a licensing option to a full frontier exploration licence - which ties an operator to the drilling of at least one exploration well - last month. Providence owns 40% of Avalon, which is located in the Porcupine Basin off the south-west coast, with French oil major Total acting as operator with a 50% holding. London-based explorer Sosina is a junior partner with a 10% stake. Total will cover 60% of drilling costs. The consortium of owners have acquired new seismic data covering Avalon and are due to recieve the full results next year. The last assessment of the Avalon prospect - back in mid-2017 - placed a 12 billion barrel resource estimate on the asset, but that figure could be eclipsed if the new data proves positive. "The commitment of the joint-venture partners to licence these data attest to the significant resource potential at Avalon," said Providence's technical director John O'Sullivan. "These new 3D seismic data should greatly enhance...[Avalon's] resource potential as well as possible exploration well locations," he said. He said the data should also reduce the time it takes to reach a timing decision over drilling. Providence is set for a busy operating period over the coming three years; starting with a long-awaited commencement of drilling at its flagship Barryroe field in the Celtic Sea in the third quarter of this year. A drilling campaign in the Porcupine Basin in the next couple of months, by ExxonMobil and China's Nexen, could also de-risk Providence's nearby Diablo prospect. Meanwhile, a site survey of Providence's Dunquin South prospect, also off the west coast and due in the summer, could tee-up a 2020 drill date for that project. The company's offshore west coast Newgrange prospect could also see drilling next year pending a successful outcome to discussions over the introduction of a development partner.