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Gruvgunnar, thanks for your reply, and everyone elses input here,
Gruv
Was lucky enough to have a chat with someone from company this week.
Think the farm out is a great deal and the cash element is vital in negotiations on other licences as like Gil said we can clearly say no rush.
6.5% of possibly a 4bn + barrel field and a carry on drilling, which if there is a find can be sold or contribution funded by PE/RBL is a potential game changer.
The carry provided by Total/Qatar is up to $216m a chunk of cash upfront and with the knowledge they have on adjacent blocks they would not be laying that down lightly so clearly have great confidence.
I'd imagine the first target will be sizable and net to Eco 30-40m barrels. If successful that is significant intrinsic value as well as proving the play, with the value longer term.
One of the slides in Gills presentation this week suggested drilling in South Africa and Guyana in Q1 & Q2 2025, so if all goes to plan then its not too far away. We should get news ahead of that for any farm outs for Guyana and Namibia
My 9.61p transaction was blue on a day of no significant volume.
Galp Energia’s share price surged almost 7% on Friday following news it has drilled a successful appraisal and exploration probe on its significant Mopane light oil find in Namibia’s Orange basin and is now set to return to the discovery well to carry out crucial production tests.
The Lisbon-based player has not yet revealed the size of Mopane, but the fact that the appraisal well lies eight kilometres from the discovery probe gives a good indication of the find’s big areal extent.
The company’s stock price increased 6.67% from Thursday's close to hit €15.55 ($16.93) on Friday morning at the time of publication.
Namibia’s Orange basin is a hive of drilling activity at the moment, with Shell having recently spudded an exploration probe called Enigma-1, while TotalEnergies is still on site at its successful Mangetti-1X well and also continuing operations on its Venus-2A appraisal well.
Galp said its Mopane-2X probe in Petroleum Exploration Licence 83 hit a “significant column of light oil in reservoirs of high quality”.
The well had three goals – to appraise the original discovery, drill an exploration target and to drill a deeper objective.
According to Galp’s brief statement, the “AVO-3 exploration target, the AVO-1 appraisal target and a deeper target were fully cored and logged”.
Namibia President Nangolo Mbumba — who assumed office after the death last month of his predecessor Hage Geingob — will hope the Orange basin keeps on giving.
It stressed that the appraisal target found “the same pressure regime as in the Mopane-1X discovery well located approximately eight kilometres to the east, confirming its lateral extension”.
Jefferies analyst Giacomo Romeo said Mopane is valued at €1.9 per share based on net recoverable resources of 800 million barrels of oil equivalent and a net present value of $4 per barrel, with a 50% risking.
Knowledge Katti, chief executive of Namibian player Custos, a partner in Mopane, said: “The continuing success of the exploration campaign further demonstrates the scope and potential of PEL 83.”
Maggy Shino, Petroleum Commission at Namibia’s Ministry of Mines & Energy, said: “The announcement of another significant discovery and the appraisal success at the upper target is further testament to the hard work and dedication of the partners involved, as well as another demonstration of the potential for further growth in our oil industry.
“With this discovery, we are one step closer to harnessing the full potential of this campaign.”
Robert Bose, chief executive of Sintana and indirect stakeholder in PEL 83, added that “this third light oil discovery in the Mopane complex and the appraisal results at the AVO-1 reservoir … provide further evidence of the scale and quality of our exploration portfolio held through our local partners, including Custos”.
PEL 83 lies immediately north of Shell’s PEL 39 and is north and east of Tota
Thank's, IJWT.
These are necessary prerequisites. Perhaps I related to other conditions, even Total has to, finally, complete these processes in its concessions. Cet par. :-)
Need to do EIA and complete the transaction, if that can be done expediently I think they'd like to drill in this year's weather window.
If we had access to Total rig schedule for Namibia blocks delineation we might see a number of free slots that are meant to provide evaluation time after each well completion. This is where we sit.
The other parameter is the contractual situation of adjacent Total block DWOB as the main prospect might be shared. We could imagine a joint well or a bottom hole contribution. A massive logistics optimisation exercice is taking place for Total across both countries which should benefit partnership.
My take is as good a guess as anyone else's, but a reflection may be
1. 3B/4B is "drill ready" when it comes to 3D and an interpretation of these results.
2. I don't know how developed Total Energy's block west of us is in that regard, but Gil mentioned earlier that they were planning to drill near the 3B/4B boundary. Perhaps the answer is partly in this statement, i.e. it is, perhaps, that Total sees its new concession as the starting point for exploration?
I have no additional knowledge that makes me find our CEO's 12-18 month proposal anything but reasonable. As a result, I have bought the stock and now have more than ever before. I believe in a slow rise from here with more impulsive developments when, in addition, we have another block or two to consider.
Each concession has its unique news flow until the drill is put in the ground. Now is accumulation time, next is chasing the price time. :-)
Gruvgunnar, from your opinion when do you think total may want to drill,
Bit of ECO volume on TSX
Https://finance.yahoo.com/news/pel-83-exploration-campaign-4-180000222.html
Successfull appraisal and another discovery...
Https://worldoil.com/news/2024/3/6/totalenergies-qatarenergy-acquire-new-exploration-license-offshore-south-africa-near-successful-namibian-discoveries-in-orange-basin/
In a previous post, I wrote that we do not know how Total's management intends to prioritize drilling in its concessions. I may have to modify this after Gil's determined performance in the presentation. The reasons that can be adduced for an early entry into 3B/4B are
1. That Total Energy's investment has given 3B/4B a valuation of around 300 MUSD (using Gil's figures). It is money on the table that is a measure of their interest in the concession.
2. From a production perspective with infrastructure in mind, it is logical to start from the Venus find and systematically work south.
3. In addition, there is apparently a time aspect attached to the deal which means that Total Energy can receive a penalty payment if they do not drill within the stipulated time in the agreement.
You can see where Total Energy has its blocks in the link above.
Threat to close the Strait of Hormuz, raised to critical. Oil price may go through the ceiling.
Good presentation from Gill.
We have heard a lot of very positive talk from him over the years but this time, the business seems on a much more stable basis.
XOM farming into Orinduk would be massive !!
Share price predictions are always dangerous, but Eco at 10p is way undervalued.
He did say 9 or 10 big boys looking at orinduk, fingers crossed, that would give share price a well needed boost.
At least Gil has a lot of skin in the game and is focussed on delivering shareholder value. He said he was disappointed by the share price reaction to to the farm in and strong balance sheet. Made it clear that there would be no dilution going forward and his job was to educate the market to realise a much higher share price with many catalysts in the next 18 month and potentially a drill before year end.
Https://www.investormeetcompany.com/meetings/investor-update-44
All sounded quite positive from Gill, really hope he pulls it off with Orinduik and Namibia. Reading between the lines it sounds like deals are close, going to be an interesting 12-18 months. Sitting and holding here on a mountain of shares so looking forward to it all coming in.
Yes, the only reason the share price is down post farm out is that there is no definitive drilling start date, as soon as this is confirmed we are on our way, good time to start building a position
Nearly all buys today but not moving the price back up. Implies a stock overhang which hopefully will clear.
Based on the CPR - the drill targets could be hitting stack pays so 4 Billion Resources Gross would easily compensate for just 6.25 WI. Farm-In was good deal all round. Gets wells drilled too..
There are several aspects to consider in this settlement.
One is that Total's willingness to quickly get to drilling depends on their relative share in the blocks in the area and the potential that Total's crew estimates exists in these respective blocks. A knowledge we do not have.
As previously noted, ECO has chosen to take cash compensation instead of being exposed with a higher share in the block. The reason for this could be risk spreading in general, or that ECO sees a quick settlement underway in Guyana.
ECO's business concept is not to produce, but to sell processed values in the ground. The company will receive bids even before an appraisal if the first drilling hits oil. Are we talking about 1 or 2 billion barrels, for ECO 60 or 120 million barrels in the ground?
We know from the Venus deal that the price to be carried through the entire production build-up - of the entire block in the future - is a further halved part. But which after 2-3 years of payback gives amounts of dollars at market price. - That is the option that ECO can sell. It's huge.
The money track ECO selected makes me think it is wrong to sell on the news. There will be more deals. And it is realistic to believe in a deterministic journey with a higher share price according to the model from previous outcomes until drilling starts.
My thoughts post ops update were this could be finished or maybe Gil and team would come through but was neutral in the outcome.
Well am very happy now, yes a wait till drill 4q or 25/26 but wow that's a good farm-out Sub 100p on spud then could be very happy days.