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I’m sure Paul mentioned in an interview that the water from the separation tanks contains no nasties so will be re injected,
Garyn - Produced water comes from almost all wells, its not something unique to this well. The old evaporation tanks are being frowned upon as a disposal method and there's a definite trend towards treatment and reuse. Not to sure what the Georgian governments stance is but since they want the inward investment to support their own infrastructure I can't see them being unsupportive to the oilers present.
It doesn't help that someone is referring to operating profit and comparing to net as well as $/£.
Big offer- you need to check your figures mate. They said $1m dollars a month and not £1m, and as Gary says you have the Opec and govt costs to consider.
It had 1000 bopd and is cleaning up from 300 bopd, at present and that's a fact. They are targeting 1000 bopd +, that's also a fact. one 1 well.
Add in the other 3 wells and the gas and reset your abacus my friend.
Don't forget the other 3 wells Garyn and the gas which is bigger than the oil !!
I think you need a new calculator and a brighter outlook on life.
1000 bopd = 1 million profit to BLOE.
4 Wells may produce double that figure or more. That's 24 million a year without gas sales.
Looking great to me.
Please re-listen the BLOE interviews and BLOE RNS history to date.
bloe will re-rate, mark my words.
Unfortunately though it doesn’t have 1000bopd and can’t produce until the gas offtake agreement is in place anyway (will also be interested to see how water disposal is going to be handled)
less UK tax
Ok I’ll make it simple we get $36 net back at $65 Brent . So 1000 x 36 x 30 = $1080000. Net back is profit after all costs. Brent has tailed off a bit but we’re in the ball park
1000bopd would generate gross revenue of a little over $1.55 million per month at $60 Brent ($51 per barrel expected for BLOE’s oil as per the CPR) - so not sure how BLOE is going to make a net profit of £1 million per month from that, once opex costs have been paid and the govt has taken it’s share!
Every 1000 bopd = £1 Million quid a month to BLOE.
You have been told this by the BOD at BLOE.
You already know this.
£700K per year profit is just ridicules.
Well 1 will make £12 million quid a year on its own.
Well 2 may do half this if its a poor well.
Do you really think the innvestors who just put 12 million quid in are here for £700k a year profit,
No thought not.
Oh and they havent been selling.
Jog on.
Based on the $2.4 million expected Opex per annum at Rustavi, that would by my reckoning only give a pre-tax profit of around £700k per year, at most, once you allow for corporate costs, if they were only producing 300bopd average over a 12 month period.
Sorry no option to edit and tidy up.
"We have assumed average Brent oil prices of US$65/bbl in 2019, with a long term assumption of US$70/bbl
from 2020 onwards. Consistent with the CPR, we have assumed a sales discount of US$9/bbl, which largely
accounts for transportation and marketing costs, although we understand that there may be scope to narrow this
differential – particularly as offtake volumes increase.
Operations in Georgia are inexpensive, and costs are largely fixed. On completion of the infrastructure upgrades,
we anticipate annual operating costs of c.US$2.4m for West Rustavi, with a further c.US$0.2m at
Norio/Satskhenisi. Based on our forecasted 1,288 bopd in FY20, this corresponds to unit opex of US$5.5/bbl.
With sales of US$3.6m forecast for 2019, we estimate that Block will record a modest operating loss of US$0.7m
this year (including central overheads), however profitability is expected to rise sharply in 2020, with US$17.5m
of EBITDA from sales of US$22m. According to our numbers, 2021 will see the asset reach “Payment Date”
(see Discounted Cash Flow Analysis, below), and as such, we expect Block’s net entitlement interest to fall to
61% (from 70% in 2020). This leads to sales of US$18m, and EBITDA of US$14m. Even with a >US$20m
investment programme over 2019-21, we expect cash to build up strongly on the balance sheet, with net cash
of c.US$15m by the end of 2020 and US$25m by the end of the following year. This provides plenty of scope to
expand the development drilling programme, and further ramp up production through 2021 and beyond."
July 2019
Mike31 was talking about an independent expert in his post. Does anyone know anything about it? I couldn't find any information on it. Where did he get the info from?
Too much info Garyn, you are digging too deep. If one well produces 300 bopd on clean up but they were hoping for circa 1400 bopd then you would hope that it would lvel off at circa 700 to 1000 bopd which as the CEO has already told you nets them a million quid a month profit. Every 1000 bopd nets them a million per month. We are about to spud well 2 and if that's disastrous at 300 bopd then that's another 3 million quid a year. It may of course go as well as the first well. Then there is wells 3 and 4 and gas that's worth more than the entire oil project. Please don't tell me that our current 30 million mcap is fair value given we have just raised 12 million quid with the majority probably still sat in the bank. Think fair value and it could e4asily be a quarter to half a billion mcap in a very short space of time. As for exact calculations as what 5 they keep until costs have been clarified that will need clarifying by the CEO, no doubt on the FAQ that they are preparing. Please consider nearly every other crappy company on AIM with zero profit, no product and millions in debt and then tell me BLOE is only worth its current mcap ? Really ? Have a look at Uber and explain that away.
Not sure I’ve seen that figure. At 300bopd it would generate total revenue of around $5.6 million per year (based on a $9 discount to Brent mentioned in the CPR). So a maximum recovery of $2.8 million for opex and capex before any profit split (the remaining 50% of opex costs would come out of BLOE’s share of that 50%). Obviously that improves at higher production rates - also assumes a constant rate over 12 months, which is unlikely given the decline rates forecast in the CPR.
Thanks Gary so I am correct in saying the benefit to Block will really be around the $15 mark and not the 35 PH has mentioned. I’m sure the CPR had $15 in there somewhere if I recall correctly.
You're forgetting though that it also only allows for 50% recovery of operating costs, before the 50:50 split of the remaining oil occurs, as per: 'The provisions of the agreement would include that cost recovery of both capital and operating costs is limited to 50% of the revenue from sales of hydrocarbons before sharing with the government. The government would pay all taxes from its share of Profit Oil. Profit Oil is to be split 50/50 until payout, defined as the time when all cumulative revenues from Cost Recovery and Profit Oil exceed cumulative capital expenditure, including the historic cost recovery pool. After payout, the Profit Oil split would be 60% for the Government and 40% for the Contractor.'
Always nice to have a couple of blue days, that is for sure.
Sievco- Yeh I know that as it’s the CPR, but I was thinking long term.
BillTucker, you have missed something. As Sea7 posted a few weeks back, BLOE gets the first 50% of revenue until all up front capital costs and recovery costs which includes the historic recovery pool of 6millionUSD. The remaining 50% is shared equally with the Georgian Govt. The 40/60 split between BLOE and the Georgian Govt. only kicks in once all these costs have been recovered by BLOE. It's been calculated on here that this won't be achieved for at least 847 days, based on 295bopd at 60USD per barrel. Until then, 75% of revenue goes to BLOE.
Bigboffer- forgive me if I’m wrong but I’m guessing your 24mil a year profit assumes a net back at $35 a barrel? Don’t forget block is only entitled to 40% of the profits so more like $14-$15 a barrel and that’s assuming Brent is at $65. Or have I missed something??
I for one am grateful for the opportunity August has presented. The market likes cash and as soon as we hear that the oil has been sold I’m sure that this will be significantly represented.
Trust and speculation on the future Mike.
MP