If you refer to April's RNS it clearly states that:
Following the update released on 20 January 2014, Frontera has completed commissioning of the gas gathering and transportation infrastructure at the Mtsare Khevi Field, situated within the greater Mtsare Khevi Gas Complex. Production has now commenced into the new system and associated 14 kilometer transportation system which will accommodate production from existing wells throughout the field at a planned rate of approximately two million cubic feet per day of gas (57,000 cubic metres per day).
So going on the above we should get an Operational Update to accompany the Half Year Results. The update will also inform us of any production upgrade going forward. Remember the pipeline installed has the capacity to accommodate more than the stated 2mmcfpd.
I recall a poster stating the pipeline can handle up to 4-5mmcfpd, so I can't see why we can't increase the amount of gas delivered into the main grid.
Even if you don't believe gas sales began in April but believe they began in June, we still have a few weeks of production for Half Year Results.
I also think SN will off-load Mtsare Khevi once reservoir deliverability has been proved... From gas pipeline JHA. "Estimated initial gas delivery rate is about 1.75 mmscfd (~50,000 m3 per day). This project is designed to test the Mtsarekhevi field reservoir gas volumes and deliverability. A permit application for the project was submitted to the Agency for Natural Resources (ANR). http://www.fronteraresources.com/wp-content/uploads/2012/09/JHA.pdf
"Designed to test gas volumes and deliverability"..Is that to test, prove, and ultimately sell ?
Just one comment I don't follow , the "no increase in gas production likely"
We were at zero till April 2014 and now producing at somewhere approaching 57,000 cubic metres a day . Who is expecting an increase from there ? That expectation is based on which RNS ? Did I miss something ? The production is official and stated clearly in the RNS of the 9th of July ,feeding into Georgia's infrastructure . No where does it say that in h1 we were to expect more . No where at all . I'd like to see some revenue booked as from April we have produced . That would be the cherry on the cake that finally dismisses many pessimists . Even a receivable if not accrued yet.
The oil production may well stay the same . It's a fair assumption
SN is clearly working on proving up all the gas and oil with token production which proves viability . Then he will sell . Just my hunch but I doubt he will stay to make the company a strategic producer for Georgia . It will take too long. My guess . He wants to prove up the fields , get the package nice and ready and sell for a nice sum . Just a guess . But he strikes me more of an explorer than producer type .
Just guesses , for what they are worth .
In the meantime today's price action was great . It does seem like we have broken the upper downward trend* line. Possible break out tomorrow ? Well if we are to expect the 15 day drill started this month to be successful then an optimist could well be excused for thinking that we'll continue the rise. After all we have a bank holiday on Monday which will leave us with just a few days left in August . Ie news imminent . Should the drill be successful then sub 1p is history for good , though too early to speculate . We need the hard facts and data .
*( the bottom line was the 200sma resistance with many bounces off it )
Finally as for the dilution prospect you should read the last statement notes we had , SN is funding this rather than diluting . With gas sales happening I reckon the prospect may be less of an issue . Remember Verang will cover the oil drills on Taribani and the other imminent fracking operations may well double the current 200 bopd production , or even add 300bopd at best according to RNS .
So we have 2 fairly imminent pieces of news . Fracking and gas drill . Verang the third and CPR thereafter .
No increase in gas production, from when, pre April?! No increase in oil production perhaps, but that'd be pre June 31. The £350k or whatever was raised in July should mean no additional funds are required (aside from Varang farm-in) as we've been selling gas from mid April and they'd know whatever the delay in payment would be (terms) and therefore what they'd need by July, hence they didn't dilute up to the 3bn share maximum mark. Also, (on a train so can't remember what ii) whoever invested wouldn't have done so if further dilution was on the way..
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