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H2 will be a big improvement with the additional production and higher net backs on export/domestic business.
MM's testing the market for appetite. Bid 4.02 to 250k and 3.92 up to 600k. Max buy 4.07, 250k. Tick up coming and a bit like Crude trying to stay above $80, same for us at 4p. I'm chilled with the current price and not fussed if it retraces as it presents another trough moment for some but i've got enough. The news has to do the talking and if it does, it will put strong foundations under the sp and all those who have bought recently or those with lower averages will be laughing all the way to the bank. Hopefully the longer term holders with higher averages will be winners too and there's a chance or should i say chances to make that happen.
KK substitute "leads to " for "=" in your "formula" and it will lead to a fine upward spiral, the beginnings of which we have been experiencing this week.
I will also have to adjust my formula as investment expenditure ramps up and fixed costs rise. It works well for current capacity and technology, giving an estimate of current profit, but will over-estimate if the scale increases massively, and underestimate if the flow rate per well increases massively. Both these things seem likely so I will have to carry on tinkering with it.
Hi KK, the formulas are not the dodgy bit. I have been unable to get a clear picture on their fixed and marginal costs because of the relative opacity of their accounts and the rather strange accounting traditions of the oil industry. I adjust my estimates of these each time we get more information. I currently work on the assumption of either $21 a barrel and $9.65m fixed costs, or $26 a barrel and £7.3m fixed costs. I use these two estimates to get a range.
I inferred these numbers from their last statement of a Brent breakeven price, but there is a trade-off between fixed and variable costs based on this figure. I used a reasonable range for marginal cost and fixed cost based on pre vious information.
i was pleasantly surprised by thei H1 profits as I had it lower than that, so I may possibly be underestimating the position. Undoubtedly they will be spending a lot of money on new drilling investment and the annual depreciation associated with these expenditures is a bit of a guess anyway.
I like your numbers but you need to check the formulas as that spreadsheet is dodgy. More cash = more operational activity = more production = more cash = higher sp = more punters and blue sky BS ! Could get silly here but the barge charter/sale would be a huge win and facilitate my dodgy formula above ??
My dodgy spreadsheet suggests we should be at around 5p based solely on current production and oil prices. With the Yelemes licence and both 153 and 154 in production that should bring us up to 2500 bopd and a valuation around 9p. Any successes beyond that will take us into double figures.
Meanwhile, Crude above $80 and heading to $81, highest levels for over 7 years. $100 oil back on the cards as we head towards Winter ? or a retrace ?
Cmon Casper, time to lift production levels and fill those coffers . Another 600 bopd from 153 and we’re up over 2500bopd with several more wells to be drilled on both shallow prospects. 4p ? market has this wrong .
Oil trading at the highest average levels since 2014 and if it continues above $75 to year end it will be a great year for producers. Just a simple case of maximising production to brighten up your spreadsheet.
Brent is rising towards $80 this afternoon. 4p is a stupidly low sp with the current output and oil price, let alone the potential for major increases in output in the very near future. Traders will be traders but I see no reason not to be a holder at present.
CC......lol . I love Geology and the OE industry and hence 14 years trying to make a penny or 2 in this sector. Like any investor, we all do our own research and not to do so means that this is just a shot in the dark. I read as much of the stuff as poss on Kaz geology but the simple fact remains, we don't know what we have and won't know until we flow the first one and do the appraisals. We're here because there is oil at depth, Kaz has 4 of the world's biggest fields and we're down the road from one of them.
Just about to go through 4p as 400k offered . Onwards and upwards.
If you find that unlikely maybe you should review the geology of the other Elephant finds in Kazakhstan and the old sea bed basin that the BNG field in its entirety rests in, they are very similar structures because they either still are or all used to be sea bed.
As I pointed out in a recent post, Kuat's seismic readings have been highly accurate to date, he is a trained Geologist after all.
As far as your pressure readings and sulphur goes you look to be quoting the post gas and sulphur re injection well readings ?
Tengiz readings differed over the years in different well areas and after workovers and reinjector wells were added, the sulphur anomaly is peculiar to Tengiz and comes from the composition of marine and carbon life forms that were laid down and then highly pressurised ... it should be noted that no sulphur has been noted at depth on the BNG licence area.
It all makes for interesting reading and after all we have had 11 years plus to read up on it all.
Sellers evening the game out, some will be trading it to take profit and maybe rebuy and average down but there's plenty more upside before i attempt any top slicing .
Casper finding a Tengiz like find ? i believe that's very unlikely and as you know, the pressure at Tengiz was initially 12-13k psi, lots of gas and sulphur and non of the characteristics of the Caspian targets. Never been to 5300m so it will be interesting to see if the rig is up to the job and what the data will show as they continue to drill. A large find would send the sp into the stratosphere but they have to solve that conundrum with heat and pressure. Who knows where the sp will go but we are invested in a minnow that could deliver huge upside and there aren't many of them.
MJF shallow field Well 153 at 400 + BOPD = 6p+ It proves that MJF and S.Y shallows will respond very positively to these quick and cheap horizontal redrills.
Airshagyl Deep well A8 target 5300M, already had three hydrocarbon shows of oil now down to 4800 + Metres. Remembering that all A wells hit a column of oil at circa 4300 Metres and the column was 100 M thick, described as vuggy, low sulphur low API good quality oil.
If this Devonian level is hit at a depth of 5300 Metres then they have found Baby Tengiz and you can imagine if the upper levels cover 58 Sq Kilometres at 100 M column thick then a lower structure like at Tengiz takes this far above a 6 - 24p calculation like deep well A5 did back in 2013.
Any of you had a look at JKX? They increased net cash balances by $10m last quarter (including inventory) was natural gas prices were 8,000uah. They've just hit 30,000uah !!! It's beginning to re-rate very, very hard as quarterly cash growth is going to be nearer to $40m ahead. Worth a look anyway and good luck here, just reading up on this now.
Slowly moving it up and can 3.825p on the bid for 375k max . 160% up from the recent low and well done to those of you who loaded up at fire sale prices. Whether you're in for the short, medium or long term, there's a strong probability that we're all going to make some decent dough. Right news Mr Carver and this gets very silly .
Crude through $79 and the petrol shortage nonsense will be helping to push prices north.
This should slowly move north on the run up to 153 news and the chance of the update on SY/CE and maybe some A8 news. Positive 153 and back to 5p ? SY licence, 6p and CE, back to double figures but the huge catalyst will be that elusive deep flowing. Hype not started here yet and my numbers could be nonsense as blue sky will be a factor if we get the right news.