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I completed and posted these calcs on Saturday (or Sunday) and have added extracts from the original post.
I included in my calculations another 40m share dilution for various reasons. However my current thinking regardless of the price per share i have shown calculated is that the monetisation of this particular prospect (if successful) could easily fund the future drilling campaign to begin with and the need for further share dilution is removed. It could then provide shareholder VALUE at a later time.
Here it is:
“So my halved price per share per bcf is 0.58p (based on 333m shares issued)
…..I have performed a single calculation on TGB2 which is the current area to be perforated and tested. This is detailed in the presentation as prospects of 50 to 138bcf for 10-55m sand thickness. So estimates are 29p to 80p per share.
The latest RNS however has described this as being 75m of sands. This scaled up gives a high estimate of 188bcf or £1.09 per share.
Just a caveat. These are my own calculations based on the information available. Others may have different ideas of how to interpret the data so alway DYOR.”
GLA
Or... 187Bcf with 80% recovery @ 1.4 $/£ gives a pre tax profit of £1.82 (rounded) per share for this element of mou-1 only
As for anyone new or returning here, it is worth reading the words in table 'Work Program' contained in RNS of 19th July .....
WORK PROGRAMME
REASONS
MOU-1
Perforating & testing programme
TGB-2 target successfully reached according to pre-drill prognosis.
Higher log resistivity and dry gas readings in TGB-2 unit over a gross interval of 75 metres despite significant increase in mud weight required whilst drilling.
Perforating and testing warranted to evaluate commercial flow potential.
MOU-1
Petrophysical log analysis after testing
Further evaluate potential pay thicknesses and quality for input into MOU-4 Target upside prospective resources estimates.
MOU-1 to MOU-4 Target Seismic modelling
MOU-1 validated the pre-drill seismic "bright spot" anomaly.
MOU-1 will help calibrate MOU-4 Target seismic "bright spots" to adjust a final well location to appraise the MOU-1 drilling results.
Preliminary seismic re-correlation of the TGB-2 objective to the MOU-4 Target confirms that MOU-1 successfully proved up and substantially de-risked the MOU-4 Target.
MOU-4 Target
Updated CPR incorporating MOU-1 results
MOU-1 preliminary results have enhanced the P10 Case for MOU-4 Target prospective gas resources by identifying a potential structural/stratigraphic closure of up to 60 kms².
Updated CPR to reflect new positive information on potential area of trap.
Compressed Natural Gas Study
("CNG")
Update
Presence of dry gas in MOU-1 reduces development costs for CNG.
Facilitates commercial discussions with off-takers of gas in Morocco in relation to first right of refusal for potential future Gas Offtake Agreement.
MOU-4 Target Environmental Impact Assessment
("EIA")
MOU-1 has confirmed the basis for a proposed step-out well for the MOU-4 Target - the location for which is not covered by the current EIA.
MOU-4 Target
Well inventory purchase
Import long-lead consumables (cement and mud chemicals, casing and well heads) in advance of drilling MOU-4 (targeted Q4 2021) to replenish MOU-1 well inventories.
Due to COVID manufacturing capacity has been curtailed.
General working capital
Advance commercial discussions with Moroccan gas off-takers in the downstream industrial sector - off-take via a CNG development concept with potential joint venture partnerships.
Evaluate opportunity to complete an existing well for gas production in another basin in Morocco.
Progress AIM admission to increase the opportunity to further develop the downstream LNG and CO2 sequestrations sectors of the Company's portfolio. These represent growth opportunities during the Energy Transition with the potential to divest at the right time to larger peer companies specialising in these specific sectors.
Compelling IMHO
Ha ha
have a lie down
I think the range you came up with looks /feels about right
CPR will surely tell us more
Regards
GRH
TT-T...
Thanks...
yes...agreed
Your: 'It doesn't seem unreasonable to say that the new estimate is likely in the scale of 68-187 though'
none too shabby perhaps for outfit with current EV of about £12m
all to play for
Regards
GRH
Sorry $0.93/share :-}
Of course its not coincidence... sorry this will teach me for posting whilst focusing on another task. if you increase the base figure or its double by the same percentage you will end up with the same 2:1 relationship between them. If someone else wants to consider this whilst I go back to work...
Post placing: 272,800,000/292,946,267 gives £0.93/share before tax
Absolutely arbitrary, it was on the basis that it was not certain and fell broadly in between .57 and 1.0 to reflect increased confidence from new data without certainty.
On the scale, if the low to high was based on depth then one would assume a 5BCF per metre range (being 50BCF if covering 10m). That would suggest that the high estimate ought to have been 275 BCF rather than 138. That would imply that the estimate was not linear in accordance with the area and there were other factors at play. If so, then the top estimate would not grow with the same proportion as the depth found.
Very roughly, 138 was half of the top liner figure of 275, so it is possible one might reach a correct figure by doing (275*136%)/2 which coincidentally also gives 187BCF. I suspect that isn't an accurate reflection of the interaction between depth and volume estimated though.
It doesn't seem unreasonable to say that the new estimate is likely in the scale of 68-187 though.
Hi GRH,
A quick and dirty calculation, given that we're working in real time, would be to
assume that we're using the CNG pilot. The company estimates a netback of $5 per mcf going down this route. Also assume an 80% recovery factor.
Using TT-T's 68.2Bcf gives:
(68.2 x 0.8 x 5) $million = $272.8m net pre tax profit. I'm also assumng success. :-)
Mick
What a huge relief to see some rational, informed and covilised dialogue on here again.
Well done TT-T and GRH.
Long may the BB stay in its current sane, civilised state!
Hi TTT
I don't think so...
as the range of estimated figures had been in respect of a stated range of gross thicknesses
and the 75 m gross interval appears to be 36% above the TOP of the previous estimates of thickness
so it might be reasonable to extrapolate across
Time will tell ... re testing /new CPR
but ...by all means...if you wish...
cover the range from your chosen low point to 187bcf
Where does your 75% weighting comes from?...
does it not look a bit arbitrary ?
Great conversation to be having ...
trying to figure out minimum case
Regards
GRH
Afternoon GRH,
In relation to MOU-1, shouldn't a review of the lowest estimated figures look at the 36% increase from the low estimate, ie the 50BCF?
i.e. (75/55)*50 = 68.2BCF
On the COS, is the figure chance of hitting that target, or chance of hitting that estimate? If the latter, it would be improved but still not a probability of 1, if the former, what would a new reasonable estimate be? Thumb in the air given that the figures do look positive in comparison to the likes of Anchois 1, would it now be 75%?
I.e. probability weighted low end figure of 68.2*0.75 = 51.1BCF perhaps
Afternoon
The upside on Morocco is off any reasonable scale
We know that...some more than others
But I want to do something pretty unusual
I want to consider the LOWEST £ case...
IE what we do know ...AS OF TODAY
((Yes...it has to be tested of course))
SGB2 was assessed by management as being 50 – 138 BCF (PRD July 2020 presentation)
With a COS of 57%
It has now been confirmed as successfully penetrated at 1229 metres TVD MD (RNS of 19 July)
Clearly... COS is no longer 57%
And it has come in with a measured thickness
that is 36% better than the best estimate...
(gross section of 75 metres ...up from 55 metres tops)
implying 187 BCF...
Is that reasonable?
If so...does anyone want to do the £ math??
Michael Caine can be used as a reference point of course...
but you will need to adjust for increases in shares in issue
BUT...also in 19 July RNS
(YES...this accords 100% with my own views)
• TGB-2 now interpreted as western distal limit of the MOU-4 submarine fan ("MOU-4 Target")
• Potential for structural/stratigraphic trap of up to 60 km²
But...WHAT IF that is only part of the story unfolding ...
in front of us ...
in real time
I think it is
Regards
GRH