The field is huge and operates in a National Park. We already knew this and is based near Santander in Northern Spain. Development upgrades have gone well and will be reported to the market soon. For now the official figures are 120bopd but the inference was that the works had exceeded this but they could not state this due to the fact the market had not been informed.
The field is the biggest discovered oil field in Spain. The current recovery is 17% so there is MAJOR upside to development activity. There is a disincentive to doing this now with 3 years left on the licenses which are due to be renewed in the next 12 months (subject to Spain beaurocracy) for another 11-13 years. Privately, there is a lot of interest in Spain but the value is slightly impinged by the fact there is only 3 years left to run on the license (albeit it is being upgraded). The value of Spain will be massively enhanced post approval. It also makes transaction partners financing difficult and I suspect this is why the previous deal fell through.
Within the field there is TOZO which is a 5bcf gas development. This is commercial by comparable fields. There is also a big shale gas opportunity. However, whilst not interested in this LGO will in due course seek a partner and sell the rights to the shale gas separately.
Ayolvengo - Very good upside to be had in lower resevoirs. And shale opportunity as above to exploit via a partner separately. Hontomin is also there to be developed - this is an oil field. There are transactions on the table but the Board are of the view that the right thing is likely to be to retain Spain and bring in a partner with a more radical plan to enhance Spain and really get the field moving in terms of bopd. This costs, but the idea would be to get as much of a carry as possible and also sell mineral/shale gas rights as well.
For what its worth I agree. There is huge unexploited value in Spain and any deal to sell would hugely undervalue it at this stage. Quite excited re Spain medium term but for now the focus is Trinidad, and financing accretive acquisitions that further add to its platform. The right strategy in my opinion particularly as a windfall from the court case is likely to come in the foreseeable future.
He would not be drawn on the case and joked about it at the outset of the presentation. He said privately that the case was strong but cut me off. Personally, it wasnt a matter of major interest anyway,
I was waiting and hoping that you would re last nights presentation, I noted in southforks posts that we have all underestimated spain, if you have time could you fill us in on this , please. many thanks
Re MOG , yes private chat - can't post details. But can say positive feedback and expectations. Neil's approach is very analytical and involves hard headed calculations .I.e explained in a sort of bookmakers calculation of risk and potential return - most interesting . As potential icing on the cake - could ?? be very rewarding - and not too far away.! He feels to some degree that it is a trial of his credibility - why would a highly experienced executive like him take such a decision - unless he had been misled . Thats his position - is he allowing a potential personal slight to affect his judgement - well make your own minds up .For me he is one very very impressive guy - will , I can guarantee , stand up well under cross examination. Must caution however that cases at law have an element of unpredictability built into them .! I note that q couple of MOG directors have resigned !!? . Could be very serious for there top guys if ( when ) they lose - banned from AIM , directorships etc .
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