Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
The scope so far achieved with three high end drill prospects in already producing fields is extraordinary for a company this size. But from the RNS's we can see there are other follow on prospects that immediately flow from these.
PG is not hunting opportunities down as they are already lined up in the green arena from a successful drill. One needs only read the RNS's and he has seven plus companies and two governments approaching around Trinidad EOR project.
This now looks to be floating into Ireland from the great research by Wack and the other great posters we have here.
As you mentioned the call option element of this...You don't need to be invested at a level you are uncomfortable with. The prospects are so staggering and so numerous off the partnerships that are lining up, that just a sensible amount in your portfolio can super-charge your portfolio.
You have to be able to get to the other side without getting shaken out. This company as you have detailed with such great time and research has staggering returns on execution. The management have done excellently so far. Executed on Trinidad when others could not work EOR. Did that with resources nowhere near as large as other huge producers. What will PG achieve when the cashflow hits and he has prime projects to cherry pick?
Morning all
indiscipline
if I may say so ...
that was a terrific post of yours...re putting in amounts that folk are comfortable with
It is sort of interesting that the scale of the PRD upside is SO immense...
the assets constitute the very definition of a BLACK SWAN EVENT
Except that, in the PRD case, there could be multiple Black Swan events
In the nature of these things, once the Black Swans have arrived...
there will then be folk saying
'the events were always going to occur ...
it was really obvious all along'
They will spout retrospective drivel!
some will even believe their own words
BUT...
The very essence of Black Swan events is that they are SO far 'out there'
that they are totally DISCOUNTED by commentators and /or participants...
that is because they are so far outside folk's experience or realistic expectation
It has happened to me several times...
(starting when I formed my own company/it took off/I floated it on LSE/I sold out)
so I do know that Black Swans are possible...
and the effects can be life enhancing ...
not 'just' for ourselves but for others we can assist
'Will the Black Swans land' with PRD?' is what everyone wants to know
There is no guarantee of course...there cannot be
but... if one were to jot down all of the attributes one searches for in a growth investment,
it is the case that PRD ticks every single box
it is extraordinary
it is the reason...in part...why I jumped in ...March2020...
sure, I have had to endure the 'time delta' ...
IE market and events taking time to catch up with the opportunity
but I am very happy to be in the position that I am
BTW...
IMO...Folk might want to read Sefton's insightful post today re CO2 availability
he has just posted about THE very biggest factor in the sequestration/use of CO2
It is blindingly obvious...
but it hides in clear sight to many who pontificate on the subject
What PG/RP et all have done in TT is astonishing...
in less than 2 years they have made more real world progress/achieved more success than others 'achieved' in over 25 years
ATB
Hi Adon,
Obviously, it did not really work out too well for Marie Antoniette but I think that here there may be a very real possibility (maybe even probability) of having one's cake and eating it.
Maybe even three cakes....
Thanks MK, will watch when back home later today.
Sorry may have used the wrong wording with accounts. Was more likely an operational update. But yes do understand potential scale and does seem to get larger and larger each time I come back to it. With having all these different pieces of cake sometimes the enormity of it all doesn't quite sink in
MK,
As one who has been in here for the CCS/EOR angle from the get-go (I didn't much care whether it was in T&T or anywhere else), I think it would might be helpful for those investors not familiar with the scale of that thing to understand some drivers in the space.
The oil price is obviously a factor. But when you use CCS/EOR combined with carbon tax credits, it actually works massively to your benefit either way - it either hugely increases profitability (when the oil price rises) or makes you hugely competitive when the oil price falls.
EOR using CO2 has a much bigger force multiplier effect on the Eastern Venezuelan Basin (T&T) than on many other oil sites (where there are higher levels of primary and secondary production; CO2 is sometimes used in secondary but mainly in tertiary - the last 10-20%).
The problem is the availability and cost of CO2. If you listen to the hysterical Greenies, you would think that CO2 is everywhere. That is not true - it is present atmospherically - but it is generally not easily available on the ground, as it were.
Read Coleridge’s Rime of the Ancient Mariner: “Water, water every where. Nor any drop to drink”.
That is pretty much the situation with USABLE CO2.
About 88% of CO2 usage globally (usage, not production) goes to EOR (about 3% each into food and beverage carbonation).
So, normally CO2 is viewed as a COST factor in EOR.
Carbon taxes changes all that - and makes it a PROFIT stream.
But that does not change the fact that there is not a lot of readily available CO2 around.
PRD appears to have sorted that in T&T.
CCS/EOR in the PRD repertoire is QUITE VALUABLE.......
Adon30 hope this PG interview helps
https://youtu.be/h-yPiXXNOYQ
GL
If PG hears you I'd stand well back.
I think you need to go over T&T again. It seems you're missing the whole point. Accounts? PRD are notoriously economical and efficient. Price of Oil matters obviously but do you actually realise how big the playing field here is?
Dyor
I meant "home", not "him".
Gotta get a new typewriter...
MK,
I agree very much with your comments.
I was originally in only for CCS/EOR (that it was in T&T was actually only incidental for me) and I made myself pretty familiar with the potential upside there.
I believe that upside to be very substantial, hence my view that I am in the same ballpark as GRH and MEM on PRD's VALUE - though they base most their value attribution on Morocco.
Obviously, it would be fantastic if we were all right on our various "favourites" - mine is CCS/EOR, GRH and MEM have always flagged Morocco and Nicodemus has long been an evangelist for the Ireland situation - because that could really bring him one spectacular trifecta.....
T&T from last accounts announcement made a $1.3m loss (?? from memory so don't quote me on that and can not fin the relevant document now). However that was during a low oil price period and whilst still refining the process.
I am interested to see latest account details (particularly for T&T) which should be with us in the next 6 weeks (pre drill). With oil prices at $40+ for most of the year would like to think that has been turned around.
As for a deal.... maybe as to why details are delayed.... Hold on to your hats
" T&T plus Ireland may or may not amount to an awful lot of value. "
Huh? The SP has risen fourfold since T&T has effectively been de-risked and months before spud. True it's hard to project figures until details of any deal are announced but please research the size of the prize in T&T thoroughly, the absolute key position PRD are in and the seriousness in which the government are now viewing CCS EOR.
The time being taken to negotiate is a strong indicator of a big announcement imho
but I reiterate ......that's only my humble opinion
GL.
Great repeated post, thank you. Perhaps you should post it fortnightly as a reminder to new investors of the sheer scale/possibilities of Morocco?
Nice also to put Morocco back on centre stage here. T&T plus Ireland may or may not amount to an awful lot of value. Truth is, at this moment in time we simply don't know so they are pure conjecture.
This does not take into account follow on drills from other parts of the seismic surveys. With a successful drill other top acreage as a producer in Morocco becomes available and is encouraged by the Government.
On top of that as we are seeing Ireland is speeding into view. It looks like the operators are working together with carbon capture at the the centre of their presentation to Government.
On top of that we have Trinidad where we have news anyday now. With further projects being presented to PG in the area.
On top of that PG in the most recent RNS spoke of other opportunities in the green space that are now presented and pursuable. PG stated he intends to be very careful in only pursuing a few as the company has more than enough for significant uplift. Check the Malcy interview on youtube.
The figures GRH show are amazing but are very credible on execution and here he is only concerned with Morocco.
The financial upside has potential like nothing I have seen.
Put in an amount you are comfortable with. There will be volatility and you have to be able to get to the other side with sanity.
Hi GRH
Thanks for posting. Must have missed that one.
Regarding your calculations. Do you envisage a single one off dividend or a split yearly one (quarterly/ half)?
Even at the low estimate that would be transformative for a lot of people. Roll on July.....
Thanks GRH
1st time poster long time reader
Now bring on the drill ;)
(((But ...
MICHAEL CAINE...REPRISE...PART TWO
But ...on the upside...
In the medium term, the gas will not be trucked
(very expensive but very opportune re timing )
as it is in the model set out on 18th March
but it will be transported via the very adjacent GME pipeline ...
so operating expenses will drop significantly
Thus the value per BCF...nett to PRD ...will rise accordingly.
Where does that leave my calculations?
I am going to err on the safe side and ‘chop’ the earlier figures...
By more than half...
Of course, it is not scientific
and I can produce myriad reasons to argue it is too brutal
BUT...
my current working assumptions are that ...
on the sale of Guercif,
shareholders could receive a special dividend as follows:
Low estimate discovery: £2 per share
Best estimate discovery: £6 per share
High estimate discovery: £13 per share
As to timing…
I interpreted the Malcy interview as hinting that Paul thinks he will have all the data necessary for a sale in H1 2022....
WHAT!
It is also worth saying that the 18th March RNS tells us that an EXAMPLE discovery producing ‘only’ 36.5 BCF over 10 years is COMMERCIAL
REPEAT...COMMERCIAL ...
Indeed it is commercial ...MANY TIMES OVER
It is also worth noting that such size of an example discovery represents only 13% of the LOW estimate of resources in Guercif.
That is some safety margin, you might agree
And then there is Trinidad/EOR/CCS . (hard yet to value but certainly BIG)
And then there is Ireland. (Bigger than Morocco?)
Oh yes...I almost forgot...
Have you considered the rest of the licences / areal extent?
And the NATURE AND FORMATION of the geologies?
What we are trying to value above is only one small but valuable piece
IMO...
Paul and his esteemed colleagues do not have a tiger by the tail here
They have a veritable safari park (thanks to ‘ Analogies R Us’)
Now you are starting to realise what I meant by ‘call option’ value
Yes...I really am here for Morocco
ATB)))
This is my post from March this year...
it was an attempt to explain the extraordinary RNS of 18 MARCH...
(((Afternoon all...
I said the other day that I would have a go at making the recent RNS a bit more ‘accessible’
Well....this is it...FWIW:
That RNS (18th March) is the FIRST time we have seen PRD give us more detailed information about what Guercif could really be worth to shareholders.
The RNS fills in many of the missing piece of the jigsaw for PRD/Morocco.
We knew how much gas the company is targeting
and now we know the value to PRD of much smaller example volumes of gas.
NB: It is really important to stress that these are EXAMPLE volumes
If we put the two together, we get a giant sized clue ...
And we can estimate the value of the type of large discoveries that PRD are actually expecting (remember Paul’s grin!).
The following is my own back of an envelope ‘try’ (timing?)
at valuing Guercif using the PRD supplied data...
I hope it starts a conversation here ...
as I am sure that others will be able to improve on this.
Here we go...
So, we start with the value to PRD of a smallish EXAMPLE gas volume
That would result in the extraction of 3.65 BCF per year over 10 years...
again, that is an illustrative period
This value (nett of operating and capital costs ...Opex and Capex)
is given as $19.7m per year
and that is AFTER deducting ONHYM’s 25% share.
That is £14.17m per year (at FX: $1.39/£1).
You can express that as a figure of £3.88m for every ONE BCF
(I am not making this stuff up)
That equates to 1.51 pence PER SHARE ...PER ONE BCF (with 257m shares in issue).
Now ...take the target figures we have been given as the estimates of ‘gross recoverable prospective resources’ in Guercif:
Low estimate ...279 BCF (RNS of 7th December 2020)
Best estimate ...819 BCF (RNS of 7th December 2020 and 20th January 2021)
High estimate ...1,823 BCF (RNS of 20th January 2021)
Now ...apply the 1.51 pence per share per BCF (which already has a deduction for ONHYM’s 25% share) and we get:
Low estimate discovery: £4.21 per share
Best estimate discovery: £12.37 per share
High estimate discovery: £27.52 per share
Decent figures ...but hang on
This is not the likely end valuation
Of course, downwards adjustments have to be made for:
- NPV (the time value of money...it takes several years to extract the gas)
- A super large find may mean some international exports where prices could be lower than Moroccan industrial gas prices. (the way things are going... post Biden... I am revising my gas price assumptions...upwards)
- The possibility that not all of the “recoverable resources” can be recovered during the licence period or extensions thereof.
- Tax in Morocco will have to be paid eventually.
- Cost of Reserves Based Lending ... (or a partnering/farm deal) to finance further wells.
- PRD will need to leave something worthwhile for the buyer.
But ...