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Pounds or dollars George? Although they are almost the same these days.
Come on GG can’t take the anticipation!
Well very simply what ever the deal is worth, you can double that and add $50M for Texas (Lowest valuation at time of merger). You would hope a big players name would mean we could exceed that as the rest of the value realisation would be credible. Furthermore with cash on hand and continual threat of placing removed Texas valuation could also benefit.
So what say you George? What’s the deal worth?
Should have said those figures are based on 50% of Pantheon’s acreage. I don’t believe we will maintain operatorship as it will be a significantly bigger player than us. Given this they need to protect themselves in the deal for delays.
I think timings are very tight but in reality there would appear to be only one winter drill requirement. If it’s not this winter it can be next winter while we can proceed with highway vacinity drills, these are the cash generating drills.
The split of the deal is hard to predict, but I struggle to see the deal being less than $100M. Very roughly works out at $1-$1.25per barrels on the lowest recoverability rates. Upside for farm in partner could be 4 fold on recoverability plus other exploratory targets.
That would give 4 drills between $15-$20M and leave $20-$40M. Drills could be less as only one appears to be requiring a winter drill (Talitha exploration).
This is all based on information released by company and of course whether other companies agree is the obvious risk in my numbers. However $1.25/bbl is well below companies NPV and ignores recoverability/exploration upside. If they are correct the above deal would be a remarkable coup for any partner yet transformational for Pantheon.
I do wonder if the companies lack of publicity is solely related to them being fully focussed on farm in, as they believe this is when the real value out, with recent eSeis deal and dilution a small price to pay for what could be achieved in farm in.
It’s of course very easy to sound like a mad man when quoting the figures above, but if the companies thoughts are correct and farm in suitors agree, we should be looking at more than those figures above.
Final thoughts and so hate using the Oil Search deal as a comparison, but the above figures are 3-4 times less than those in the Oil Search deal and ignore favourable location. Admittedly they ignore there was about 16drills carried out before the Oil Search deal.
George, the farmout includes two Talitha wells (one exploration and one appraisal) and an Alkaid well. The fourth well doesn’t appear to be confirmed, but three wells will be producers so I would imagine the last well will be a Phecda well.
In 2015 the company were looking for $25M for 8% of Alkaid Phecda , admittedly Otto never took them up on this. Whilst each deal will include differing values for sunk costs, drilling and acreage, it would appear the company had a higher valuation on Alkaid/Phecda. Of course the lower probability west Sak/Ugnu zones have been discounted but likewise we have proven the ZOI flowed at commercial rates upgraded OIP by 50%, and increased recoverability rates. As David Black highlights if waterflooding is suitable, with early indications being it is, you can triple recoverable rates.This is why I believe Jay has described the assets as ‘World Class’ and adds to my thinking regards a rerate.
George, the figures posted were based on a ‘real world transaction’. Otto Energy paid $13M for a 10% share of Talitha and the other prospects. I believe some of acreage licences may have been leased but alternatively Pantheon believe that Talitha has been down risked based on Alkaid. If we assume a similar valuation on Alkaid, which admittedly is a significantly reduced acreage but has now flown at rates the company believe to be commercial when read across to a horizontal completion, then you get to $260M. Obviously some generalisations/assumptions in there but I don’t believe any are outlandish, would you agree?
How do you get to $70-$100M? I know in the past you have liked to use real world transactions to put a value to things.
Yes, for all Jay’s critics you can’t deny his hands on approach.
Regarding 're-entry', I think you have probably done the right thing getting back in now. Bits of news keep tumbling in and then one day, those not in suddenly realise they have been left behind. Safer to be in I would say. Though significant news may be a little way away, who knows? Anyway best of luck. I wont be far behind.
Also, you're never wrong george, you must remember that. So on that basis I will be in soon! lol
I hope you got low 18s. I will be joining you soon when something else frigging rises.
No, george, not quite yet. But each bit of news makes me more relaxed. I am teetering on the buy button when some new RNS comes through. There's a bit of info on Michael Spencer on the other side but I'm sure you will be aware.
Are you back in?
Nice late-declared mega-buy at 17:07 too. I need to rethink my re-entry point perhaps.
I know you like quotes GG, recognise below?
‘I am happy to go with your figure of £5.9M - I shall sleep that little bit easier for it. Be it 5 or 5.9 it's like a finger of fudge - just enough.’
I don’t agree with David Black, I would be surprised to any change in the OIP. Indeed any differences could cause some frustration and be one of your red flags. However I understand these red flags drive some of the upside.
My path to a mulitbagger is pretty simple. If they farmout half they current recoverable at $1/bbl that should double the share price. Sell the next half @ Jay’s quoted $7 after 3-4 appraisal drills. This leaves any buyer with all the upside from other targets, recoverability increases etc., which would significantly dilute the cost per barrel to less than $0.25 and $1.75 respectively (on successful waterflooding alone @ 40% recovery). If the companies assessment is correct this should be more than achievable.
It might happen, it might not. You pay your money you take your chances.
I am still posting here because I can do what I want thanks GG. Furthermore you specifically mentioned me in your post, as always good luck.
Yes George, our of the two positions you took on the cash position (first one negative/ second one positive) it would appear you first position was correct.
Very clever that you pointed I was ‘likely’ to be wrong as you know my figures were based on those released by the company and had not factored in additional spend associated with future Alkaid drilling/planning.
Before you go can you confirm your position is as below:
There is enough cash (finger of fudge) but there may not be enough cash.
The Alaska deal is terrible but the Alaska deal may not be terrible.
Talks of takeover are risible but there could be a takeover soon.
Any future drills labelled as discoveries are bankers but all future drilling is purely exploratory.
You trust Jay but don’t believe what he is saying.
There are loads of red flags only a fool would buy but not enough for me to buy in last week.
I will wait for the farmout deal before committing but might commit (again) before the farmout deal.
This is my last post apart from the next one.
I could go on but you get the point. It’s pretty clear why you have a 100% prediction record half of the time!
Were/are you in JOG? Amazing how many second chances that company seems to have.
GG: I sense you are getting tempted with bid at 18.12. But it looks to me with my novice head that it could go lower. Buy vol approx a third of sell vol., and sells coming in at 18.14. If you buy now, that looks a little unsafe to me. I am also considering my re-entry point and would appreciate your thoughts. It looks to me like it may well get cheaper.
I say you are offered without.
I say you are as likely to 'TT' as you are to let someone else have the last word.
oh, and I haven't been posting for 3 years on this name, closer to 3 months. Be more careful to make sure who you're ranting at
And bit of advice: people who are confident in their argument don't engage in serial punctuation abuse. #reclaimtheexclamationpoint!
Well, this return beats your old record by 4 minutes. Looks like Saffron made the difference. Crickey, you're worse off than I thought. I don't 'claim' anything except that you're an average joe in need of affirmation and thinks he can find it on a company message board by sharing re-heated commentary and ancient investment bromides dressed up to try and sound clever. That's it.
Um, is this going to be like TOWIE where we have to send Saffron to find out if you're really like, hurt and stuff, but then you emerge in Ep2 flirting with Jayson?
promises, promises.
Yeah, you prove my point every time you try to snap one off. Poker's a game of skill, just like investing and, most unfortunately for you, debate.