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Going back to the *****tone Flags, this is likely to be a multi-well development with a significant gas flow, and infrastructure being installed this winter needs to be able to accommodate this as well as what will be coming from the current well. Maybe this will need to include an additional wellsite, so they need to get this complex situation right. I'm sure they will - there are some pretty clued-up people amongst the JV partners.
@Copper. I suspect it’s up to Egdon to provide the clarity and SO will need them to officially update on what’s happening in the JV. Like you I think timescales are looking tight based on what we know from past Wressle ops. If they are still going for a Feb gas production date that means planning submission, approval and works to be completed within the next 6 months. Perhaps they are confident of some fast track, but it would be good to see something go in to planning very soon.
Copper, to be fair I don't think they were going to be developing the *****tone Flags interval for a while, and production has been far more from the Ashover Grit than expected, so gas wasn't an issue before.
They need planning and permits, but I don't think they'll submit applications until a development plan is decided for the *****tone Flags. Views have clearly changed regarding the licence this year. Maybe this Gaffney Cline report will shed more light.
Indeed Serif. The point is, is it the fault of the company, or the fault of the various governments who encourage investment in licences initially, then pull the rug before production? I've always thought shareholders are too keen to blame the company.
Perhaps as the Moroccan government own 25% of Inezgane, they'll be more inclined to back each stage to, and including, production.
SMcN I agree gas solution/planning aplication will have to incorporate future gas from Pennistone but that gas has been known about since the 2016 test discovery . If SO etc could be a bit more honest/informative about what the hold up is in design/funding/permisions we would all be clearer. I just hope we know more in next month or so, not just SO saying we are still talking about it.
Sounds like an international conspiracy against EOG. Let’s hope Morocco aren’t in on the plot!
And the French government stuffed our French licences.
Copper, don't forget it was the UK government that stopped Holmwood (Michael Gove), and the Irish government blocking Inishkea.
Mind you, they've stated gas would be monetized this winter, so as they've not corrected this, I expect it to still be the case.
Copper, It may be some time before the Ashover Grit's gas issue is dealt with as the planning may have to incorporate gas from the *****tone Flags. In fact, I'm sure this is the case.
Hoping Tovoc and all are right at 6p plus next month. ( Tennyson risked target at 7.8 p) We have been waiting a long time, but as ever with EOG ( Holmwood Surrey, Ireland et all once gamechangers ) best to be a bit cautious. I stayed in here for Wressle, but I still see no application for gas export pipeline or power equipment at Wressle Lodge farm, and current maximum production is limited by flaring consent. EOG still talking with partners on the gas solution for months now? So no change on production anytime soon. Come on EDR UJO EOG get a gas solution sorted!! I can SEE SO frustration on this on latest video. From July presentation, Serenity may still need one or two further wells ( next year? ) if its going to be a big field development , and if a small field we need agreement with adjacent Tain operators. We are in Serenity only because the big oil players are investing into wind etc. Still , overall its still looking positive, subject oil price staying above $90 next couple years. I think the switch to expensive electric cars will only start to have an impact on petrol demand after 5 years or so.
What we should remember is that SO and Fincapp tend to be very conservative in their estimates.
Wressle was predicted to produce 500 bopd, it is producing above that now and estimated to produce between 1200 and 1500 bopd once the gas issue is sorted out.
The point is the estimates tend to be very conservative as not to disappoint; so I suspect we could be looking at potentially higher values from Serenity; we know we have oil down there but it's how much is what we are all waiting to know; I suspect the £273M is a conservative value too. We will know soon enough.
Europa is starting to shine on us all.
IMHO
Boom Boom - I think you will find Oddie actually said "could deliver $250m" net value to EOG (actually $273m in their presentation).
However their are a couple of things to factor in:
1) Its based on a best case as opposed to a mid or low case scenario.
2) Its also based on 69mmbbl of recoverable reserves which will probably require more than one well to prove up. On a positive note they use a recovery factor of 35% and past history says this could be over 50% in the Captain Sands.
3) Importantly its also calculated on $15.8 / boe. Shareholders can do their own research as to whether this number is realistic based on recent data.
Proved Reserves are estimated at 2.5mmbbl net to EOG so you work out a range of likely scenario's
"Thing with this share, you get Simon pushing out new via his interviews, news coming out on Wressle production (nearly always good), but the share hardly ever budges."
Isn't that the truth??
"I’m really wanting an exit here, however as we get to my break even I’m starting to question whether or not I’d be jumping the gun by selling, be nice to realise some profit after around 8yrs of pain"
Feel your pain, been in this a while also. Will probably take 50% out if it goes above my average, and leave 50% in.
Bad news is, if Serenity is a dud, I can see it sinking to the 1.90s range, then just saying just about 2.00 for the next few years.
Thing with this share, you get Simon pushing out new via his interviews, news coming out on Wressle production (nearly always good), but the share hardly ever budges.
According to Simon Oddie, success at serenity would deliver value of $250m (net to EOG), this is equivalent to 22p/share.
Rest, the calculations is easy, the upside potential on success case
Contractually, the spud must happen within 24 days at the latest (15 Sept), 3-3.5 weeks. So we should get the rig mobilisation RNS anytime now.
Surely rig mobilisation RNS this week
If we tracked off EDR and would have an expectation of 5p without the placing, where do folk expect us to be with a positive outcome from Serenity?
I’m really wanting an exit here, however as we get to my break even I’m starting to question whether or not I’d be jumping the gun by selling, be nice to realise some profit after around 8yrs of pain, even if it’s just savings account rate and to cover account fees incurred over the years…..
Although Simon Oddie did say it was already commercial at today's oil price.
cfq, I think you're right. We would be over 5p. I suppose it comes down to whether we'd prefer to be 5p without Serenity, or 2.8p with it. If it comes in, I suspect we'll prefer to be with it, and if it doesn't, we'd rather be without it?
Forgot to mention, Egdon, which is a good barometer of where we might have been without the placement shares, is over 5p this morning.
"but a few shares to shift first"
This seems to be the common theme with EOG, the constant sifting of the placement shares, keeping the share price down.
We did have an uptick over the 3p last week, which is a positive sign, this may eventually move.
Expecting a good week to come but a few shares to shift first
Beautiful...
https://mobile.twitter.com/chazers8/status/1560579135961014273