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10% of our mid-case prospect inventory equates to 2TCF at 47p per TCF. Add in 90% of the value of our discovered 0.5TCF & we can see that brings us to over £1 per share (not including Sidi). Fingers crossed but I reckon that's peanuts for a big buyer looking for loads of running room & cheap to extract gas with a guaranteed path to market at excellent prices & a 10-year tax break! Come on James & co...sock it too them!!
Crude...ever hopeful of a very satisfactory outcome at 'LE'!
Thanks Crude really helpful
Thanks for posting that Crude. That was before the seismic began I guess? I think I remember it from before.
Singwhenyouwin, I don't know if the same rules apply without finding any more gas but if we could hang some hope on a belief that we have proved the presence of a hydrocarbon system then what James advised could yet make us a decent profit! here's what he said:
"Good morning Kirk,
I am just beginning the process of responding to questions and yours is top of the list"!
"We haven’t provided any updated guidance on a value per Tcf – that was a conscious decision for a variety of reasons – mainly that we do not yet know the gas sales price, which is the most important variable. As we approach FID we will put a number in the public domain".
"Regarding the proved up volumes and how a purchaser might value the business…. I think the way to think about this is that we should get a high percentage (maybe 90%) of the P1 volumes and then a low percentages of the unproved volumes. The key variable which the seismic helps reduce is the risking of the unproved volumes. So right now, based on public information, we might get say 90% of our proved 0.5Tcf and a small percent, say 2% of our 31Tcf potential. Post seismic perhaps that 2% increases to say 10% or another number as we will be able to demonstrate with a prospect inventory how our 31Tcf is built up. More drilling and re-entries will increase in the proved volumes but actually most of the value uplift will come from the seismic".
Hope that helps explain our thinking Kirk.
Cheers,
James
"most of the value uplift will come from the seismic".......................we can only hope that still proves to be the case!
Cheers, Crude...ps, that Elton John movie was great fun!
Shed - 'Badile ' Went from significant gas shows (all categories) to duster in 2 weeks, with an awful lot of selling in the interim period!. Note also that in an interview beforehand JP said that failure was priced in. Dropped pretty much 50% when the news came out.
TE-8 was just a disgrace. That was going to be the transformational Paleo game changer. Then they decided to to release the results, kind of forgot and then just distracted everyone with the seismic.
Everything about this outfit is fake PR.
Hadn’t considered that they could split the TAGI and Paleo. But guess anything is up for negotiation. Could make sense to sell the TAGI opportunity and have contingency with the P. Hopefully we’ll know soon enough anyway.
Hi Jobbs I would much prefer a straight sale as I’m so sick of waiting and hoping. Wether it’s possible to negotiate a straight sale of our Tagi discovery and leads while retaining an interest in the Paleo I don’t know. We’re going to be just shy of Mooncheeses ‘calculations’ but he if he can get most LTH’s out with a modest profit he will have had our backs after all and save his reputation.
He mentioned this to many investors at the Gherkin
Thanks Cheema. Crude do you still have that email?
Singh, JP mentioned the 10% to crude in an email. I’m sure crude can dig that out as a reminder. Im also sure that he’s mentioned this at investor invents in private conversations too and it’s been reported back.
Shed - out of interest - would you prefer just a straight sale? Sale with contingency? (I guess depends on the upfront part). Asset sale and continue with SM?
I don’t think there was ‘subterfuge’ around Badile but yes the truth about TE-8 certainly took a long time coming.I was openly critical of the showbiz even in the good times for what it’s worth now. Just hope he can finally deliver a deal that comes halfway near the hype. If it’s low ball with foggy hopes for future contingency payments then I will admit he has completely failed us.
Trellis? I'm surprised you have any wine left to value year-on-year, or should that be day-by-day? Maybe those dark recesses need to be lit-up so that your cellar can show-off it's full potential, once refilled. It sounds as though Wannabe Number 5 has left a few rogue bottles for you to devour, but I suspect by now, you have already been on the blower to your Wine Merchant(s) so that you are well stocked during the uprun to our Liquidity Event - or Liquid Event as you may prefer to call it. I have every faith that you will be so drunk at the party, we'll need to carry you out of the premises.
The irony is that all the data we have prepared and had verified by 3rd parties is spot on. I think this has been something they have concentrated on from the start and on purpose given our stated aim to sell. But unfortunately the drill bit has been less successful. Personally this is more due to the fact we are trying to open up a new hydrocarbon play, and even with the help of Schlumberger, we have struggled.
Sometimes you have to accept when you don't have the resources to achieve something and the timing is spot on IMO.
Not a fan of calling them “incompetent” trellis. They’ve certainly not had the results we wanted - but they all rose to relatively senior levels within multinationals and you don’t do that with just luck. We can all toss a coin 5 times and guess wrongly each time - but it doesn’t make us incompetent coin toss guessers. With a much larger budget I have no doubt they would have great success in Morocco. Just a shame they won’t be able to do it with SOU.
'Majors' buy proven resource. They don't want to base a purchase of 'unproven' and spend a fortune proving JP was wrong.
Really Foxy? I really don't think you've looked at many O&G deals then. The Majors unequivocally do want unproven exploration and large quantities of it. Of course they also want exploration that has a good chance of success and that is the only question mark over our potential resources.
'Jobbs- not in any independent CPR they aren't- we declined to continue commissioning them. Any figures trotted out are purely company estimates and cannot be taken as factual or even showing genuine potential until such CPRs back them up. having CPRs in place now would have been very useful in marketing the Company especially after Te 8,9 and 10'
Is it better to have CPRs trellis? I'm sure it would add some percentage of certainty, but how that would relate to our sale price is unknown to us. I believe our Board advised us it would not add to our value on sale and of course they are advised by Rothschild & Co. You know, the internationally renowned M&A firm.
I'll take your advice on Chateau Lafite Rothschild, but I think I'll stick to the advice from the Sound BOD and Rothschild & Co when it comes to anything else ;)
Shed - The derampers haven't won, JP has just failed to live up to the hype and then gone one to buy the mails for his own professional coffin at PIs expense.
I was onboard with this right up to Badile and TE-8, the level of subterfuge surrounding those 2 drills was the final straw and you could see JP for what he really was. I lost a terrific amount of money and suspect that you could add up on one hand the amount that are still in profit here.
Just don't believe a word this man says. He hyped this on estimates and is prepared to do the same again.
They are absolutely just company guidelines - correct. But why would I want to doubt those? They are also of course just guides - but one thing the company has done well with was their very closely matched assessment of the Horst volumes etc before the CPR was issued. So it certainly offers some level of comfort. Anyway - I was not ramping and to be honest I would probably be satisfied with 40p (or even less), but I think logically it should/could be much higher. It is very easy to think 50p is crazy considering the failed wells and the current SP, but we do need to detach our thinking (to a degree) from that. Anyway - “what will be will be” and I am glad that JP has a lot of equity in the business.
I'll concede one thing to you R_Du_R since those distant highs the de-rampers have won this on points. It seems ever thus on AIM where those with a fetish for company destruction get their fluffing fix on a regular basis. Not sure why I'm bothering to point out the obvious but your company valuation seems to have overlooked the TE-5 horst with it's improving economics, Simon Davies seems to rate it.
Singh - I took that to be 10p per unrisked TCF based on seismic following the basin modelling and data from 5,6,7. I now understand that the COS for the 20 TCF mapped inventory are broadly 20% - 30% COS. So theoretically it could be far far more than that. Particularly when you add in the already discovered Horst and the recent improvement in its economics (recovery factor and connected volume etc). I am keeping my feet on the ground given the recent disappointments, but can not see any reason why a figure far in excess of 40p (far far) cannot be achieved. But who knows????? Certainly no one here anyway.
20 TCF - LOL - Yes another 'company estimate' they've proved so reliable.
'Yeah, it's there somewhere, damned if we can fin it though'
'Majors' buy proven resource. They don't want to base a purchase of 'unproven' and spend a fortune proving JP was wrong. 5-10p max here.
Sorry about the common sense, hasn't played well on this board since 95p.
Twit wait for others to respond
He’s repeatedly said this has he? Please could you point me to where he has said this since nearly all of the presentations are available online. I have never once heard him say this, and he has always been quite guarded when asked questions on this, so please don’t make up bollox
I’ve approached James about his numerous comments about the value of the undrilled prospective exploration. James has repeatedly stated we can get approx 10% / 10p per TCF of the undrilled and unrisked exploration target. Take 20TCF as quoted in the RNS, net is likely to be approx 4TCF. Even if you calculate at 10p that’s 40p of which 19p is attributable to SE (47.5%) ownership. So technically that should be on top of the asset sale price. Does anyone else recall JP stating the same?