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Garry Graham, you have nailed it.
Yes I’m sure those tanks have a lot of water to separate. CEG can indeed sell the oil to Heritage but they won’t be doing the transport and marketing for free.
Ah yes the Middle Cruse. CERP thought 60 wells producing 48,000 barrels each. http://docs.publicnow.com/viewDoc?filename=70768%5CEXT%5C3628E505B2E1344FB5FC733C3D17D45D2070C357_C4EF11042A2526718DA8312001E1C53BE1E66F68.PDF
Unfortunately you can see the combined CEBL Bonasse and Saffron production rates here month by month which means S1 started out at less than 30b/d and is probably now no more than 10b/d, so it’s fading away with less than 5,000 barrels produced in total. https://www.energy.gov.tt/publications/
Not far off 50% down for those that listened to the rampers and bought in to ridiculously over priced Open Offer recently.
Regarding getting equipment in its just off the St Mary's Road which leads on to the Southern Highway, so there's no problem getting in or out.
There are 4x 400 barrel tanks on site that they are using for the Middle Cruse to store and separate the water oil mix.
Heritage will buy the oil and be sent by road.
Plans are afoot to export the oil by sea paid for by an oil trader. although they have said a water separation tank may be required.
Of course there will be large spending on new wells but also large revenues.
S1 was never planned as a production well always an exploration well until they found oil at only 450'.
3 zones in the Middle Cruse with one having a gross pay of 1,000' interval 4 with minor sand migration ( a big plus) and 60 wells planned.
The MC is over pressured at 0.6psi and at those depths is very high.
Pressures increase the deeper the layers at about 1lb per foot in rock and less with water e.g. undersea.
The Lower Cruse had the issues with moving shales only 2 x 8' zones perforated but had an API of 40, that's fantastic, over 300' still to perforate of "open" flowing sands.
The 2 zones 5&6 had pressures of 0.7 & 0.9 psi. As i understand it a pressure at that depth is very high and should flow unaided for a long time.
This well has given Cerp so much potential for future growth and the economics make it potentially far better than sub sea plays.
Just a shame about the dilution but that should change fairly soon
Costs at Saffron
$70,000 per annum but varies with WTI
Free for the first 2 years of production then 10% for years 3-8 then 12.5% onwards
$15k payments on the first 3 deep wells
$30k on each of the first 3 FDP plans
No royalties on Bonasse field
3% royalties on a field not in Bonasse
NB I haven't been able to find which fields these refer to and whether it includes Icacos
We have borrowed 3m from Lind on a monthly payback in shares or cash. Cerp can borrow another $1.5m if the market cap is above $25m . That's all the borrowings
At the time WTI was $60 and they are showing $50 revenue for Saffron, at Goudron it is only $30, a huge difference.
The mineral rights are held by the Singh estates who we pay rent to, the government does not get royalties only corporation taxes and the infrastructure costs will go against that.
On fields outside of Bonasse in the SWP we have to pay Bolt royalty fees
Gary, if you think I and Star are associated, and in collusion with, the CEG board, then I know you are a few kangaroos short in the top park.
It would appear that your IQ is much higher than I first anticipated.
No point in me getting into a debate, or having an exchange of words with you as I wouldn’t want SC getting on my back also.
most of what you say makes sense, but I would like to point out in relation to your last paragraph ( and this has been commented upon by LK during one of his interviews): given that the field is literally by the coast (you can see the beach), it would be very likely to strike a deal with an oil trader who would build a bit of infrastructure to pump oil onto a tanker. So that development cost can be easily avoided. Granted the trader would want to see that reflected in the oil price he pays. Main point being, I don't believe the development cost to be a major issue. All subject to proof that there is sufficient oil there.
bboys, you are right. I shouldn't have referred to jono having a potential IQ of 44.
It is surely much lower than that. He can't string a sentence together.
A lot of personal comments have been made against those people who challenge the board of directors wisdom and integrity by certain posters on this bulletin board that can only post positive comments no names required. I am also of the opinion that they report negative comments and ask for them to be removed, probably in conjunction with the company . Personally, I find it very easy to judge the current board of directors and CEG share and the value I believe it holds. I am neither an oil expert, geologist or a share guru with a PHD in economics. My formula is as follows: It is not groundbreaking !!!
1. Review the company accounts for the past 3 years and review the income and profits from its core business strength and make a decision accordingly. ( In the case of CEG - current accounts have not been filed yet as they are late and have been for some time. However, previous accounts show no profits in the last 5 years from its core business activity and minimal income as a result of oil exploration, discovery or production ).
2. Review the RNS issued by the company in the past twelve months for potential positive news to note a recovery. ( In the case of CEG - I have looked extensively but cannot see any positive defining news that clearly indicates a turnaround in the company in the past 12months ).
3. I turn on my screen each day and review my share-dealing account. I don't think my trader account is incorrect but I bought the shares some time ago at which I believed was a good price and it is now 95% lower and each week falls. Since the purchase of the worse investment in my life, no commercial oil was found in the Bahamas. The licences have not been renewed. The legal battle with the environmentalists has not been finalised in the Bahamas. Leo Koot the director and Simon Potter the CEO are no longer working for the company and a number of other non execs have resigned. The company has changed its name so it no longer uses the word " Bahamas " and no P1 test results have been disclosed to the shareholders and the accounts are late so the financial position is uncertain. Meanwhile the shareprice has fallen 95%. We still await a farm in and the only thing that has diluted faster than the oil in Bahamian waters are the continual shares being issued by its new CEO . I say to the posters who cannot see the wood from the trees. Until the company does turn itself around stop posting any more nonsense as your conjecture will only result in other people losing their hard-earned money. Enough people have lost their lifesaving on this dog of a share and your posts only encourage people to do the same. If the company turns around and we all wish that then great post away and we will all eat humble pie but until then stop being so irresponsible and if you don't believe what I say just stare at the screen in front of you and read the share price. GG
jono, please edit your posts, before you post. The syntax is terrible and it makes no sense. I get the gist of it though.
Definately something but time will tell.
Been on receiving end of abusive posts that never got removed so don't care if yours stays, in fact prefer posts such as yours to stay for all to see people as they really are.
But I have can say that my post was not in anyway abusive and if I had taken a screenshot I would repost again.
It is not wrong to be questioned or have the occasional dig. Do not take it personally.
I just reported your post for accusing jono44 of having an IQ of 44.
That is mental abuse.
Have a nice day my friend.
I’ve had this debate with ZE in the past few weeks jono44.
I have had posts taken down just because I questioned SC.
Was accused of wrongful characterising, in a word of course and barred for a few days.
The guy carries a bit of clout.
zag, yes you did.
When you use '****' to pass the initial censor, it is obvious what you are doing.
Gross revenue, yes. I am talking about cash returns after costs. Saffron is much better than the old fields for a few reasons:
i) They are not obliged to sell the oil to Heritage: they COULD get fuller oil price, especially for lighter oil
ii) They pay a crown royalty of 12.5% (on any field) but not (until a pretty high threshold) a second overriding royalty to Heritage or a landowner
iii) 200b/d wells are clearly more efficient that older 10b/d wells: extraction costs are maybe $20 per barrel instead of high 20s.
So in time, at $60, a Saffron barrel might be sold directly to an oil trader for $57; that's $50 as CERP claimed after 12.5% royalty (and would be $37 after opex). Compare that to a legacy barrel sold with a larger discount to Heritage for $50; $35 after royalty; $7 after opex.
But initially CEG doesn't have the facilities in place to store and export their oil themselves: tanks and pipes would cost a couple of $m. So initially they would have to go through Heritage. I was working at a $70 oil price; sell the oil to H for $60; $52 after royalty; $32 after opex.
Got to sympathise with you, my non abusive, non disruptive posts have also been removed.
I believe that someone here is not exactly who they say they are..
Nothing wrong with this post is there, just an assumption and they are allowed aren't they.
Time will tell.
Hi Bohemia Cerp estimated that Saffron would produce $50 per barrel gross revenue after tax and royalties on a $60 price
I have no idea as I am not a geologist or oil services engineer. (Shrugs)
But I am assuming that a well estimated to take 4-6 weeks to complete & flow, taking 10 weeks; will come with 4 weeks of extra costs. Which will impact the planned drilling schedule.
I'm not especially negative about the chances of Saffron becoming a nice development if S2 delivers. My concern is whether the risk of getting the LC to work has been underplayed: I think they might have bought CERP for convenience even if they though S1 was less promising than claimed, and of course LK has since run for the hills.
I agree a Saffron barrel is worth about $30, much more than a barrel from the old fields. However the 278b/d rate is backward-engineered to give a 1 year capex payback so it can't be called analysis or research. Nor is a well going to produce at a flat rate for a year or two: if you want to say a well is going to pay for a future well and then continue to throw off barrels and cash, that is what you are assuming.
Given the decline rates of typical wells, for an sort of immediate confidence of 278b for 2 years you'd probably need an IP nearer 1000. More likely, a lower IP but sustained production of 350 after 3 months might give you that confidence. Personally I don't believe Arena will be advancing any money until 2-3 months of production history has been established.
If they fund 3 wells, with a further 2 self funded within 12 months, I might make an upside case for 1000b/d from Saffron: $11m free cash per year (1000x365x$30) with the old fields covering the G&A. More potential wells beyond that, but don't expect the market to look further any time soon. What's $11m/yr worth if/when S2 has worked? The current market cap plus the Arena debt would make an EV of $30m.
And then there's the current balance sheet. The company is $3m short on their 2021 budget as $3m from Bizzell (at 8p, lol) is missing; and that budget assumed $4m savings on the P1 bills but nearly 6 months on we have no update on that. Arena are funding growth not past failings: to me the company needs a fundraise first to close these off. And I reckon the Arena conversion price will be set from that fundraise. Currently 4.2p = the old 3.5p raise + 20% and I don't believe that will work for them - expect it to be rebased to the post-S2 price, whatever that is, +20%.
You agree with SC....Well that is a surprise, fatalcharm. Birds of a feather stick together, and fools seldom differ...
Could be that they are playing it safe and taking extreme precautions to ensure the whole process gets to the production stage and hopefully oil into barrels at the expense of time and costs.
Because let's face it, if S2 flops, we can all say goodbye to CEG.
Would never of thought drilling a onshore well would take as long or longer than an offshore deep water well.
Successfully penetrating these zones is clearly an arduous process.
With 10 weeks to drill & flow each SWP well , one would assume that it would change the field development time & costs by presumsbly approx doubling both....
So maybe only Saffron 3-4 is achievable by year end.
I hope S2 flow rates are on the higher end of predictions.
Here’s some figures 100percent of people that have bought in the last 6 months , could take it back a lot further btw but everyone listening to and taking in stars dreams that have bought in are all out of pocket every single one of them , fact
And as I said yesterday when will all this good news happen?
The harm is staring you in the face. People listen to him and choose to loose money. He sounds like he knows what he is talking about, indeed he probably does know, but he is always wrong. I'm happy I've not talked this rubbish up. Nobody will loose money on my say so.