For shale it is about having the best acreage . A big risk is that we don't know enough about what is in our own concessions and other operators know even less about theirs !
Supposing Digas were producing 250mcf/year at $8/mcf and were making 20% profit on sales , annual profit would be around our current market cap and if the resource is as huge as we think it could be valued on a multiple of earnings , say 15X we could be talking £10/share - with plenty of growth potential left for the next guy .
It could take 10 years to ramp up production to these levels so discounted cash flow comes into play .
The New South Wales Coal Seam Gas licenses could be worth £0.50 - £2 per share if the ramp up of Qld LNG projects increases domestic prices to the point where NSW relax anti-CSG policy .
I'm valuing UK CSG at zero because although the margins could be good , I don't think it will get political support .
I wouldn't be invested here if I thought the upside was 170p . Risk reward would just not good enough .
According to their website, NEXEN at 13% is the biggest shareholder followed by the BOD. I guess any buyer would want to make a cheeky offer but of course the shareholders know the value of the company. Personally I would expect the price to be close to the brokers ratings of around 170p. But let's not run away with ourselves I wouldn't expect anything to happen until after the awards in the 14th round early next year. Maybe Igas will just sell off some licences or go into a joint venture. In the meantime they have a boots on the ground business and are applying, for example to expand their conventional oil and gas business at the long-established Bletchingley site. They have had a rerating of their conventional probable resources resulting in a significant increase. Having said that perhaps the lowering of the oil price will be challenging as it will be for many small O&G producers.
Having seen this kind of situation before the ONLY possible way for INEOS to become the largest Shale Gas business in the UK is to acquire iGAS
Over the years i have witnessed, in other sectors, where a newer player decides to enter a sector and has the capital to become the number one, its always by aquisition. INEOS have made it crystal clear they intend to be dominent player and use shale gas in the manufacturing process. makes perfect and commecial sence for them to do that.
So imo its a matter of time. Wednesdays results will indicate where iGas is currently, The 14th round Licencing results are a few weeks off and that should give us an idea of how much has been awarded to iGas and how much INEOS have got.
After that i reccon on iGas doing the revised group re-valuation as outlined earlier by the group and it would not surprise me in the slightest if INEOS came knocking - Heck i will go one further, at the current SP if i was INEOS i would be buying up iGAS now to secure a chunk of it on the cheap!!!
Time will tell, i just hope and pray we can can secure a full SP recovery before this happens - the last thing we need right now is a cheeky take out price due to the SP crashing
11.5% up now. I think its just all the uncertainty and oil price slump that has caused our recent SP dip. Confidence is coming back again,Ineos,the OPEC meeting, and the interim results for Igas this week,then I think this have an influence. We are predominantly a news share,and let's be honest,the news hasn't been the best for us the past 6 months. Once again,this is not for the fainthearted, its a BBS,( big boy share). Still a long long way to go before any shale production is in order,but will happen.There's a general election in May,always influential, and of course oil prices may well keep lower for sometime yet. Strong buy for me here,the trust is coming back,that's the key. With more education to the general public about fraccing and its benefits will win over in the end. Just a theory,but with lots of tax free lumps of pension pots being released for customers in April,then a lot of pensioners are going to have a lot of cash floating about to put away somewhere.My point being,that I am predicting that around d April and May,especially after the election,that a lot of shares will be bought in or around those months.AIM offers Inheritance Tax Free for your shares if held for 2 years or more.This would be a tempter to people looking to buy something up.And with Igas's potential,why wouldn't they?
You've got it right. The most critical (in environmental terms) thing when drilling any oil, gas, or geological exploration well onshore is when the borehole passes through relatively shallow aquifers which may be exploited for human consumption. Such intervals must be drilled and cased-off relatively fast, with a non-toxic drilling fluid in circulation (or possible air-drill it), correctly cased-off and cemented to ensure proper zonal isolation. This is and always has been the case. It doesn't matter if the well's going to be fracced or not: that occurs a far greater depths.
Regarding Putin and energy security....anyone who turns up at a G20 meeting with 4 warships as escort is up there with the tattoo'ed bloke in the High Street with his Rottweilers.
Russia's economy is in trouble with a low oil price, tumbling currency and continuing sanctions. I wonder how it's going down amongst the oligarchs. A cornered Putin would be a dangerous Putin and his easy way out would be to play the nationalism card and intervene in Ukraine with concerning possible effects on European gas supplies.
Had to chuckle reading the Guardian article about fracking particularly the reference to groundwater contamination 'several kilometres away' . If you are a regular visitor to the Lancashire and Yorkshire moors you can't miss evidence of hydrocarbon gas which has bubbled up through the peat evidenced by puddles with a floating blue film . Many of these area are within the upland catchment for drinking water reservoirs. i.e. Methane dissolved in drinking water has long been known about and since the Abbeystead pumping disaster all new water installations require zoning to ensure installed equipment is intrinsically safe thus eliminating ignition sources for any hydrocarbons that may be entrained within the water network. As I'm sure most on here are aware the main contamination risk is addressed by using a triple case when the fracking well passes through the water table. The gas being at a much greater depth - deeper than the coal measures in most cases.
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