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2018 was supposed to be "by hook or by crook" then 2019 got pushed back due to difficulties in Louisiana /Argentina and lack of cash-flow. I remember reading that a promise had been made to the President of Paraguay to start drilling, so it really should happen one day, and at the moment it does seem planned for this year. The Operations in Paraguay bit of the website says, "President has commenced preparations to drill one of the prospects in the Imperial complex during the second half of 2020."
"Commenced" could mean anything from having paid up front for a rig, or only put a few ideas down on paper in a 1st draft of a project plan. But the saying "Commenced" rather than "to commence at dd-mmm" does make it sound like it is happening.
Funding? Let's see the financials and see how much free cash PPC is generating on a monthly basis. After the fail of the last attempted cash raise via dilution, at PPC will know not to try that again. At least not in the open market anyway, the deal with Traifalgur ultimately achieves the same.
You have to pay for the drilling rig/ crew up front so there is no way the expense will fall into 2021 if the drilling starts in Q3 2020. I have lost hope with Paraguay as it was planned for 2018 then 2019 so its clearly not high priority. I am sure they just keep penciling in dates to try and encourage farm in partners and create urgency.
The FAQ's state that in Paraguay, "One well is planned, targeting one such prospect to commence operations at or around the third quarter 2020 which will mean that the major expense will fall into 2021 and accordingly will not affect in any way our plans for growth in our producing areas this year"
Drill now, amortise the costs, impact on the Balance Sheet over the following few years which will be paid for by the massive oil strike and extra revenues that it brings. Works in theory I guess.
Drichi
We should get the unaudited report for 2019 by Friday which will reveal the end of year cash position. I think this will give us an indication whether PPC can really go it alone in Paraguay. I do not see how we can drill several wells in Argentina and USA and still have $10m to drill Paraguay. They seems to be more focused on debt reduction all of sudden rather than rapid production growth. I do not mind this but the conservative approach does not make sense if you are then going to throw $10m at Paraguay.
Agreed. Obviously concerns about the virus in China are bad, but I think the impact on O&G has been over-estimated.
Paraguay- I'm looking fwd to PPC drilling there in H2. I think the knowledge gained from the 2014 campaign and the Argentinian operations in similar conditions should (theoretically) de-risk this a bit and make success more likely. Fingers crossed anyway...
of unfortunate timing today with the RNS falling on a day when the O and G sector struggled. However imho the company is now moving well in the right direction.
Reducing debt, increasing reserves, gas diversity soon to add to production to the portfolio. The mention today that they are still looking at substantial acquisitions and in the background and later on in the year Paraguay. Not looking too bad!
Atb,
Northern