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I totally agree with you.
The numbers in Trinidad and Tobago alone are mind-boggling. The NPV's on that are through the ceiling.
It just needs a broker to his/her job done for them and explain that to the wider.
And before krasjawhateverhis****ingnameis (probably Flagstaff or a proxy for them) starts spouting off about downplaying the potential of PRD stock, read my posts....
As I have also pointed out, there are 4 Billion barrels of that would be economic to extract from legacy fields in T&T.
100,000 bpd = 109 years production.
I was also trying to open peoples eye to the wider opportunities, less developed nations, with tier 2 oil Co coupled with Fertilizer plants. Our knowledge could be utilised.
MEM the level of knowledge and indeed courtesy on this board is welcome to see, I had a small holding in BLOE but dropped it like a hot coal in short order: a shareholder ought to place trust in the BOD as the priority, their clear padded out waffling made the outfit uninvestable.
Actually Predator have more than sufficient potential with existing projects, the potential NPV is eye watering. Let’s hope for some decent broker’s notes with price targets at c.40p plus.
I don't want to put a damper on things but the reason Trinidad was selected for co2 eor was that the economics worked. It's also why it hasn't taken off in many other places in the past.
In neighbouring countries I expect 1 of the partners could be another co2 supplier. It makes sense for other heavy co2 producers in the region to approach us. So they can make use of it and appease the climate pressures they face.
We have the blueprint, tech and regulatory precedents to bring companies together to quickly get to co2 eor. With minimal hurdles as the data from the pilot will have taught Paul how to calibrate things.
I expect us to expand in the region, globally no. Cc's and green initiatives will change that but are still many years away. There's much bigger players in co2 eor and we would be bought out before that stage.
Pau is not here for the long haul.
Thanks S82, I know BLOE well, I have a small position there, so far, I am underwhelmed by BLOE's CEO, a classic case of over promise and underdeliver.
Vast might be too little, F...... Vast more like.
It may be further worth observing that there is some evidence that the oil/hydrocarbon deposits off Angola (and specifically Cabinda, where Chevron is the dominant player) may be the southern/eastern limb of the same deposit field where Trinidad/Venezuela is the western/northern limb.
And, closely proximate to the Angola oil fields (which are marine, not land-based) is Pointe Noire in the Republic of Congo (nor DRC, but next door). There are huge phosphate deposits there (and phosphate is a key input to fertiliser and thus a C02 source).
The permutations here could be vast.....
As regards Nicodemus and BLOE, I seem to recall that he may he exited his position there. But he does know the opportunity.
As do I. I think there could be big opportunities in Georgia and probably through BLOE but I exited my position in that stock some months back (time-delta was too weak and you gotta cut poor performers on that metric).
I have said this before but I will repeat it. There is serious co-location in Georgia and a UK-listed company active in the O&G space there (ticker: BLOE) - ask Nicodemus about it, he knows a lot about that that stock. I think there are also some others on this BB that know about BLOE too but Nicodemus does know that one well.
There are many other co-locations (CO2 sources close to oil/gas field) but Georgia is a quite easy one and BLOE is already there and is London-listed.
This was attempted sometime ago on here.
If you google a (image) map of the world where oil fields are located and then repeat the exercise asking where Fertiliser factories and fossil fuel power stations are located, you will see lots and lots of co-located facilities :)
Good, well written post GRH, after some initial scepticism, largely due to PG’s reputation as Roly Mo from the Fimbles I’m in now, big time stylie.
I would contend your point though in that the Trinity field enjoys a confluence of both an onshore oilfield and a reliable source of 99% pure CO2. It may be a good idea for us to study the world in some detail and attempt to evaluate where such ideal geographies exist concurrent to an analysis of how cost efficiently CO2 can be shipped.
Ironic really, that CO2 has economic value as a commodity.
Further to my earlier email, I just want to clarify that I have not factored any carbon tax credits into my valuation methodology.
I have simply viewed the availability of CO2 from Massy as being the cheapest immediately available vector in the locality. So that it is CCS (which is a good thing, in my view) as well as EOR is cherry on the cake. CO2 is not always the best vector for EOR but since it is available in Trinidad through a party friendly to PRD, that makes life a lot simpler.
The carbon tax credits that could flow over just using CO2 as the vector (increasing viscosity of otherwise uncommercially extractable oil reserves) are immense.
In other words, CO2 is readily available and is an effective vector to drive EOR (and there have been some great analyses on here about the potential value of just the EOR value stream).
But the carbon tax credits and the "green" value are not necessarily factored into DCF's (certainly not mine on the base case - I have definitely factored it into the medium and upside cases).
Just EOR with ready availability of CO2 in immediate locality in Trinidad is awesome.
Having CCS and associated carbon tax credits is like seeing the afterburner kick in on an F-16.
Paul said subsequent TT EOR projects will plough thru the process and regs a lot quicker as the ‘template’ has now been defined.
Thank you for your wise words.
My only slight concern is given the nature of the beast, long lead times, engineering studies and then the glacially slow initial progress, how does PG maximise the value in what has amazing potential.
I wonder if PG has thought about Franchising this operation, don't giggle at the thought. Left field, curve ball, but maybe worthy of consideration.
If I was a young entrepreneur with perhaps a modicum of tech knowledge and wanting to create a massive business with proven technology, Green credentials, ESG, low overheads, perhaps I would approach PG and ask if PRD would Franchise the CCS EOR, and agree area's of the world.
There are various Software programs out in the Oil industry, that specialise in CCS EOR Calcs, hire a Reservoir engineer to oversee the operation, costs paid in advance by the client oil Co.
PRD could rapidly gain vast market reach as the Franchise op scaled up.
We would take a small $50,000 up front payment per Franchise area, say covering a 10 production head area, for ex, plus a percentage of the increased production.
If handled expertly, with a professional Franchise Co offering help and advice, PRD could very quickly gain massive market share and see rapid progress, and a rapidly increasing oil production figure.
With a Clause in any contract allowing for future Revenue sharing from any CCS payments or Tax relief.
PRD have created something very special, how we maximise the potential is critical.
Anyone on the BB have any Franchise Licensing experience please ?
A most excellent and insightful post.
Very, very true.
Whatever business one is in, it is just a shed-load easier to use Microsoft Office (Word, Excel, Powerpoint, etc) than it is to set about writing one's own software - no matter how good a coder one or might be or however much resources one has at one's disposal.
That is precisely the reason I got into PRD about a year ago. I was always in it for the CCS/EOR play - for me, Morocco and Ireland were irrelevant (of course, I now know a great deal more about them, mainly due to some excellently informed posters, including yourself, on this BB, and I am glad that there might seem to be great value there).
But, basically, I saw it as a tech/solutions play around CCS/EOR. And that was why I came in.
Your post articulates the point clearly. Even for a major, it is a compelling proposition to partner with PRD and just get on with the thing ASAP than to muck about trying to do it oneself. It you have a known cost with someone who knows what they are doing, then as long as the revenues are higher than said cost, it s a slam dunk.
From what I know of the revenue versus cost differential on CCS/EOR and PRD's demonstrated expertise, it does not require Warren Buffett to work out that going the PRD licensing/revenue share route has hugely compelling advantages.
Sorry for the title
but you will see why in a secon
There is something that is important in businesses operating in very competitive markets (IE international hydrocarbons)
That is the 'bar'effect
If business A and business B are closely matched
as to assets/management quality/staff resources/access to capital etc etc
then it is possible that they might deliver similar EBITDA performances
Now...change one thing
what is it?
maybe one business is able to access better management ?
yes...that would help materially
but take quite a while for improvements to come through
maybe improved access to capital?
yes...that would help...
but again there is a lengthy lead time effect
I could go on but you get the gist
What IF business B was able to reduce its own unit cost of production very speedily?
THAT would raise the competitive temperature in that arena pretty quickly
it would advantage business B and disadvantage business A ...
there being inelastic price/demand
HOW does one reduce unit cost of production (holy grail in process/production/manufacturing businesses)
Either make people sweat harder ...
up to a point yes...
but not really effective in oil and gas as they often sweat near the limits
What could it be?
Change the methodology of production
normally in most industries, that would require VERY large scale retooling/investment of more capital...
so the capital requirements spiral
and time to market lengthen again while 'retooling' occurs
BUT what if some bloke rocks up
with a ready made /viable solution
that needs very limited capital outlay
and can deliver quickly?
and has recently PROVEN it
What if that was PRD?
now here is the BIGTHING...
if business B does that , it reduces its unit cost of production
and any competitor would have no alternative but to adopt similar activities
or else the competitive bar would be forever raised ...to their disadvantage
Just thought it worth mentioning