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KK - the fudging of the current MJF production numbers in that update would lead me to think the production has slipped.
Not me being negative for fun but, like you my experience of reading clives rns's for a number of years makes me view things in a suspicious way.
Good to have different opinions otherwise it turns into the ra ra brigades day out.
They didn't mention reinstating Directors wages, rather informed they were being kept down so as per my last thoughts 2021 is a holding year and hope to see 2022 back to 5 - 6p levels. Would love to be wrong before then.
CC,
I can't disagree that they could've gone pop and the cash drain was worse than i anticipated. Easy to look back but important you look at the numbers in 2020 v a far rosier picture now.
Facts/assumptions
2019 average crude $64 v $42 in 2020 - 35% decrease
2020 total production - 545,667
Export/Domestic sales 57.5%/42.5%
Exported barrels - 313,758 / domestic 231,908
Domestic market operating at a loss and the international average crude price was 35% reduced. It doesn't take a rocket scientist to work out that they were probably losing $20 per barrel (netbacks) at least and if you multiply that by 313,758, that's $6.275m revenue. Add to that the domestic loss and you can see where the cash has gone BUT that was 2020. Turnover rose by 18% to $14.3m, no mean feat and according to my maths, that could've been a $20m+ year. Add in SY which is largely export then $24m, we're not going pop !
We'll have the opportunity to ask questions pre AGM so let's make sure there are some good ones. Employees have gone up hugely but wages similar, that's probably a result of contractors being converted to permanent but on low salaries ? a question to ask. Cash is only 0.7m currently, i'd have expected it to be more for H1 so have they paid off more debt etc or has production fallen off a cliff in last 2 months ?
We're not going to get rich from MJF but there is sp appreciation if they develop field as originally planned. The real sp appreciation comes from the deeps. Yep, 3AB could be a winner but i'm not convinced and the barge will be a good cash generator if they charter it for drilling projects.
Still maintain KO has to make this work and he'll do all he can to ensure it's survival.
Let’s hope he is into shipping as well because I believe shipping prices have gone through the roof.
KK - from surfing around I think Kuat is also heavily into shipping and the Suez blockage would have hit him financially.
Plus the financial meltdown of the Kazak economy for his other ( non casp ) internal assets.
I'm not as sure as you on his continued liquidity - a fact clearly pointed out by the need to place for £1m.
IMO the oil price and opec agreement completely saved casp from going under.
I believe it was desperate in mid 2020 and if oil price had not recovered, yep it would have probably gone pop but I still believe Kyat would’ve found a funding route albeit hugely dilutive.
Re Kaz authorities and changes under Tokayev, I say that’s probably a yes as they are certainly not supportive and SY licence delay shows that.
IF is also the case but I suppose that’s the case with any exploration company. I believe they keep it going and have enough irons in the fire to do so but the real prize comes from the deeps and that conundrum is still to be resolved, hello Mr Shin ??
That said if 3ab can be sold for $25m and a9 drilled for 50% on a free carry then the govt debt can be repaid and its free money from A9 to fund mjf and off we go.
IF is the word though.
I wonder if the changes at the top of the Government have impacted Kuat and Co's ability to strike the best deals . . The guy they bought the rigs from lost his influence when his father The General passed away,lost his job running the banks and then lost his oil drilling rigs, interesting that he turned to Kuat. Kuats own father and original sole owner of 3Ab passed away .. maybe now the bosses say everyone has to pay and this is the new reality. Imo without Kuat handing some of it over to a farm in partner he risks loosing the lot $800k a quarter needs to be funded and converted into drills, clock is ticking for Kuat he needs to become more decisive and he needs a deep pocketed drilling partner. They are already preparing to hand over A9 and 3ab to keep going .. this looks desperate to me with another sub 2p potential unless they strike the right deals and quickly.
T. The £32 historic costs, are like a success fee, but CASP have had very little success! As KK suggests the charge appears to have been levied against the whole licensed area, therefore we hope there will be no more of them, even if more fields are discovered. If there is any farm out, some of those costs can be recouped by CASP. If the horizontal well is a success, we may have turned the corner.
T.
Like everyone here, I was disappointed to see that Mr Carver has used these 2020 Results to slip in the fact that the Courts had rejected our appeal to reduce the £32m of historic costs. I'm just wondering whether we've been 'hoisted on our own petards' by the Authorities, because as many of us will remember, it was 3 to 4 years ago that many of us (myself included) bought into the notion that Caspian was holding back on publicising the success of A5 until they were awarded the licence to sell with reference to global prices?! It could be that the Authorities believed that too, and consequently applied the historic costs to the whole MJF Structure? That might have been fair(ish) if A5 et al had been successful... but it has come back to bite us. Just a thought?
As I said a couple of weeks ago, though was over optimistic saying cash in back YE could be around $1M ($0.3M).
The next quarterly payment of $800K is nearing and we've only got $700K in the bank - will no doubt scrape through this quarter payment.
Elephant in the room is the sale of the other 85% of the A3 Best reservoir if commercial, $100M would be nice to pull out of the hole we're in - later this year?
Anyway like I said this year should prove to be a much better year and happy to hear the 154 well was the horizontal well they were talking of spudding.
''2020 FY Results will not likely be carp as you now seem to be getting to understand, but bleak at best.
Wright downs on 5 wells plus many other expenses EP's etc..
boats fees in the hundreds of thousands
Bank account battered - around $1 million I'd guess
40% of domestic oil production produced at a loss
export oil income just about keeping the lights on
over 1 million barrels have been produced in past 2 years - will they knock that off the P1 number in the 2020 FY Report to boot?
license fee paid each quarter in the hundreds of thousands
Please don't try an put a positive spin on 2020 - the results will be CARP.
This year will have a better FY Results IMO when out next June or so.''
Soviet well campaign with Chinese partner was abandoned.
Looking back at the original admission document, why i invested in Roxi @ IPO. Does make me laugh when i look at the expectations v current position. Same as the 2017 and 2018 Investor Presentations, expectation v delivery, it's Walter Mitty stuff. Time for them to deliver against the new plan but as a starter it would be good to understand that, i don't believe our Chairman has a clue !
https://www.caspiansunrise.com/wp-content/uploads/2017/02/Admission-Document.pdf
Agreed Divermike, the rising price of Brent will only get us so far, and what is needed is increased output. However the rise in price helps cashflow which in turn allows more drilling. I am hopeful that the exploitation of the MJF field will start to deliver soon. I am not knowledgeable about the Russian wells
Uncertain, its all helping us, that is if we are getting oil out of the ground, everyone here is dreaming of a deep coming in and CASP eventually cracking the problems, Im sure some time back CASP said that we were looking into re-entering some old Russian wells, can anyone remember what happened to that idea?
I think it’s clear the vaccines are the beating of covid, so as the world gets jabbed we can return to business usual, all the stimulus money should help demand. The stock market is forward looking and so I’m with KK. It’s the forward looking statements from Casp that are the most important, Deliver on the potential…. Any of it!
Brent has powered through $74 overnight.
A bit feisty Somm.
As Uncertain has politely positioned, it's pretty obvious that revenues and profitability has declined YOY, the only positives being a fully year of export sales from MJF as opposed to 4 in 2019 plus the reduced G&A costs. I look forward to analysing the numbers but if you're looking for an sp retrace, i don't believe you'll see it as it's already factored in. As stated, the only way you get a retrace is if oil production down, 154 not positive or something negative in the accounts not known. The main fact is that they've traded through where some have failed and 2021 should read well. We'll find out soon enough butmy money is on a northwards sp move.
Somm, I think you and KK are saying much the same. 2020 FY results will be C**P, but 2021 will have turned this situation around. You want the good info to come later so that you can buy in at a lower price after the FY results. I think that's the only difference.
"Watch and learn" is not a helpful way of putting it, particularly when you can't spell write downs right
KK,
Watch and learn.
2020 FY Results will not likely be carp as you now seem to be getting to understand, but bleak at best.
Right downs on 5 wells plus many other expenses EP's etc..
boats fees in the hundreds of thousands
Bank account battered - around $1 million I'd guess
40% of domestic oil production produced at a loss
export oil income just about keeping the lights on
over 1 million barrels have been produced in past 2 years - will they knock that off the P1 number in the 2020 FY Report to boot?
license fee paid each quarter in the hundreds of thousands
Please don't try an put a positive spin on 2020 - the results will be CARP.
This year will have a better FY Results IMO when out next June or so.
Sounds like you get your exercise walkung and visiting historical sites.
Mr C,
Wild brownies and grayling, great sport for tiny drys and nymphs, no lures allowed !
Somm , you’re expecting CARP financials and with average crude @42 through 2020, decimated domestic price and no SY, it’s likely that they will be but they traded through. I don’t believe so retraces from here unless there is stuff we don’t know about or MJF production has declined considerably and maybe 154 failure.
2020 is history , 2021 oil prices are above 2019 levels and cost base is less so management accounts for 2021 should be the healthiest since incorporation. Need some good commentary on 2021 to date and clear strategy with timescales going forwards.
My land is 15m wide and doesn't have a stream. Cuts down on the gardening
Only brownies and the odd Greyling
Mr C,
That’s cheating ! I like to waste hours not catching anything ! I’m moving down west in next 2 years and I’ve seen a couple of properties with lovely chalk streams in the garden but not quite 350m !! Are they browns or rainbow ?
KK - I actually own 350M of my own trout steam at the bottom of my land, compete with weir pool but I still dont get fly fishing ! I just flick in a Mepps 0 spinner - that gets the job done !
IBYB,
Fracking is used in the oil industry, not just gas. Yep, UK companies like Cuadrilla Resources in Lancashire, fracking for gas, the famous UKOG/Angus Energy etc in the South Downs for oil. Much more resistance in the UK especially when sites are close to residential settlements, not the case in Caspian's case or the US shale drillers or Canadian tar sands.
Caspian are using it at MJF to exploit the shallower layers where oil is trapped, they're also looking to do it on A8 to resolve the issues on blocked fractures from all the lost drilling mud. I'm not the technical one and my Geology A level only goes so far...lol No earthquakes in Kstan and hopefully Mr Shin has access the the pump and kit needed to frack a deep well but i look forward to hearing about it.