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13th Jul 2022 2:53 pm RNS Results for the year ended 31 December 2021
" ... As reported last year after selling oil commercially from our initial well in the Gonzales field, as the world went into lockdown, we suspended all operations and activities in line with the requests of the US Government and Texas State Legislators. We have now through our Houston team re-engaged with various professional firms seeking to bring into play our proposed 2nd and 3rd drilling projects.
With operations now being undertaken again, albeit in a more restricted manner, we sought to shape Pennpetro to emerge stronger and better positioned to accelerate its growth profile from these challenging times. ..."
https://www.lse.co.uk/rns/PPP/results-for-the-year-ended-31-december-2021-fq2h7da9mjjjtk8.html
Thanks Serif.
Operations at Gonzales were suspended at the onset of the pandemic, but PPP now appears to be in the process of resuming them.
So watch this space.
HH - could be tempted if I understood a bit more about current production/revenue from Gonzales - do we know anything as this is not obvious to me, but if it’s up and running now would presumably be a money maker and a way of financing works.
Fwiw my take on the big trades was that they were probably buys as the SP and traded price increased rather than decreased. But agree they look at bit
Thanks for the correction Serif , and sorry for overlooking that.
The RNS doesn't state that PPP are carrying UPL's costs after that initial period though, which is when costs could increase considerably.
I can see why UPL shareholders are gutted at giving away so much of the project so cheaply.
Still, they could always buy into PPP as well!
HH - just on a point of fact I think the agreement says that PPP will carry UPL costs until the expiry of this licence phase ie until seismic work completed “(interests carried by NPUSA”).
PPP undoubtably got there hands on what looks like an excellent prospect in just the right place at the right time at a great price because UPL needed to get the seismic done before licence expiry and they were skint. But if it turns up trumps there is enough there to change the trajectories of both companies and I suspect many UPL shareholders are just relieved that this great prospect won’t be wasted.
Agree that company takeovers are very costly. UPL also have a couple of big Malaysian investors (it’s where their real potential lies if they will ever get in with it) so a takeover might come very expensive unless they were happy to give up on their investments to date. I am hoping that this JV will turn out well for both companies - Saouaf certainly looks like a gem and I believe that the original CEO Steve Staley had had his eye on it for years!
UPL's current small market cap. is a bit illusory, because it's in a weak financial position, and is facing huge dilution soon.
In addition, you generally have to pay a massive premium to take over a listed company.
And even if PPP took over UPL, it might 'only' end up with 50% of Saouaf, because it's held in joint venture with the Tunisian state oil company, Enterprise Tunisienne d'Activités Pétroliéres ("ETAP").
But 50% of such a huge resource is still massive, and partnering with the Tunisian state oil company provides reassurance.
Finally, PPP isn't carrying UPL's costs: they're being split 80-20 PPP-UPL, as per their respective shares of the project.
This is different from many farm-ins, where the new company assumes all the costs, giving the existing company a free carry.
Taking on 80% of the sunk costs as part of this seems reasonable, and the cost of £310,225 to PPP is relatively modest, and is payable in PPP shares priced at a minimum of 28p/share.
Why didn’t PPP just take over UPL if MC is only £2mln? The deal as it stands means that PPP carry UPL seismic costs, which isn’t cheap, and PPP may only end up with 40% equity in Tunisia.
levistubbs Posts: 3,096 Price: 0.30 No Opinion
RE: PPP Tunisian Farm-In Update, 13.7.22 21 Jul 2022 07:58
"What a load of rubbish. What do Upl have left if just to exist. Even the back costs are in the form of shares. They have given the farm away for next to nothing because of the dire state they are in and still Pen have to do the seismic which we should have done long ago and would have given them the wherewithal to get a better farm in.
So what now, what do we have left, what is the plan, how do they intend to build shareholder value that they have crushed.?"
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https://www.lse.co.uk/SharePrice.asp?shareprice=UPL&share=Upland-Resource
Interesting to see an Upland Resources (UPL) shareholder, on LSE, complaining this morning that UPL has farmed out to PPP too cheaply.
Well, a bad deal for UPL would mean a good one for PPP, as this is a 'zero sum game'.
Certainly, UPL's distressed circumstances, compared to PPP's very large funding resource, would have given PPP the bargaining power to cut a very good deal for themselves, which they look to have done.
To acquire a transformative, company-making asset, of the right commodity, at the right time, and in the right place.
Well done to PPP for farming into the Saouaf gas project in Tunisia.
This huge Tunisian gas project has up to 15.2 trillion cubic feet gross potential in multiple targets.
At a gas price of say c. US$0.01/c.f., that equates to c. US$150Bn. potential in-situ value.
And it is perfectly placed to help replace Russian gas supplies to Europe.
The potential revenue and profits that could flow to PPP from this project, once it comes onstream, are simply enormous, and could dwarf PPP's current market cap. of just £14.77M. at 17.5p.
21st Jul 2022 7:00 am RNS Farm-In to Saouaf Permit, Tunisia & Share Issuance
... Tom Evans, CEO of Pennpetro Energy plc, commented:
"We are excited to finalize our partnership with Upland in their Tunisian venture with the execution of this farm-in. Upland has done a lot of excellent technical and commercial work to this point and have built a very good relationship with the Tunisian authorities. There is a critical need for additional gas and blue hydrogen supplies to Europe, especially given that the Saouaf permit area is situated under the existing TransMed gas pipeline, which feeds gas from Algeria to Italy and has spare capacity.
The Sauoaf permit area hosts 10 gas prospects and leads with up to 15.2 trillion cubic feet gross potential in multiple targets. The risked resource, independently audited by highly respected third-party engineers, is 420 billion cubic feet of gas plus 1.6 million barrels of oil equivalent net to Pennpetro. The Pyrite prospect offers an opportunity to open up an exciting new play in the area.
Andy Clifford, President of our wholly owned subsidiary, Nobel Petroleum USA Inc., is excited for Nobel to assume operatorship of the permit and to carry on the good work done by the Upland team. He is exceptionally well qualified to oversee the future work programme, having over 43 years of worldwide industry experience, including leading negotiating efforts in North Africa and oil discoveries in Algeria for major oil companies.
Pennpetro and Nobel are evaluating several other Gulf Coast opportunities that will provide synergies with our ongoing Gonzales development, which we remain very excited about and which we hope to revitalize by the end of this year."
Share Issuance
The Company has issued 952,268 shares to its $20 million facility provider GEM Yield Bahamas in respect of agreed fees. Application will be made for admission of the Issued Shares to the standard listing segment of the Official List and for admission to trading on the London Stock Exchange's Main Market for listed securities. It is expected that admission will take place at 8.00am on 26 July 2022 and that dealings in such shares will commence at the same time.
Total Voting Rights
Following the issuance of the Shares, the Company's issued share capital will comprise 84,404,374 ordinary shares of £0.01 each. The total number of voting rights in the Company following the issuance of Shares will be 84,404,374. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interests in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
https://www.lse.co.uk/rns/PPP/farm-in-to-saouaf-permit-tunisia-share-issuance-e5tcbsyel8x690c.html
21st Jul 2022 7:00 am RNS Farm-In to Saouaf Permit, Tunisia & Share Issuance
Pennpetro, an independent oil and gas company focusing on development of the Gonzales Oil Field in Texas, USA, today announces that, through its wholly owned subsidiary enterprise, Nobel Petroleum USA Inc ("NPUSA"), the Group has signed a Farmout Agreement ("Agreement") with Upland (Saouaf) Limited ("Upland Saouaf"),an Upland Resources Limited ("Upland") subsidiary, for a farm-in ("Farm-In") to its Saouaf permit area, Tunisia ("Saouaf Permit"), held in joint venture with the Tunisian state oil company, Enterprise Tunisienne d'Activités Pétroliéres ("ETAP"). Pennpetro had earlier announced the signing of a Heads of Terms agreement with Upland on 16 March 2022.
Farm-In
NPUSA will farm-in for an 80% working interest and assume operatorship, subject to ETAP approval. NPUSA and Upland will jointly seek from the Tunisian authorities a one-year extension ("Extension") to the Saouaf Permit to allow sufficient time to undertake the current prospective work programme which expires on 23 December 2022 ("Expiry Date"), consisting of an obligation to acquire 300 km of new 2D seismic data and reprocessing some existing 2D seismic data. Extension negotiations have already been initiated referencing the Hydrocarbon Code of Tunisia.
NPUSA will be appointed as the Operator for the Saouaf Permit and a formal Operating Agreement will be executed. The working interests of NPUSA and Upland Saouaf (interest carried by NPUSA) up to the Expiry Date are as follows:
• Nobel Petroleum USA, Inc. 80%
• Upland Saouaf 20%
The Saouaf Permit can, under its priority rights, be converted into an exploration permit at the Expiry Date. In the three years following that Expiry Date, the exploration work programme requires the acquisition of 150 km of 2D seismic and the drilling of one exploration well to reach the M'cherga formation or equivalent to a minimum depth of 1500m.
Upon the conversion to the Exploration Permit, the working interests will be as follows:
• Nobel Petroleum USA, Inc. 40%
• ETAP 50%
• Upland Saouaf 10%
Upland Saouaf has been granted an arrangement whereby they may purchase up to 25% of the NPUSA Exploration Permit working interest on certain terms, subject to the approvals of the Tunisian authorities and subject to making a cash payment to Pennpetro of a 250% premium of the work programme funds expended by NPUSA.
Subject to Extension, Pennpetro has agreed to reimburse Upland for 80% of its prior sunk costs in Tunisia, amounting to £310,225. This will be paid through the issue of fully paid ordinary shares in Pennpetro ranking pari passu with other ordinary shares in Pennpetro at a deemed value of the higher of either £0.28 each or 10% discount to the closing mid-market pricing of the Company's shares on the date of the Company's RNS confirming the Extension. ...
https://www.lse.co.uk/rns/PPP/farm-in-to-saouaf-permit-tunisia-share-issuance-e5tc