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I'm also not in the business of rubbishing SOU's prospects... If they actually told us what their prospects were, then I might be.
I think you misunderstand me, WH0.
I'm not defending JP; I am just not in the business of rubbishing SOU's prospects.
@longwait - have you asked yourself why SOU have not published an inventory of the leads that make up the 20tcf? Give it a go now, please tell us the answer that you come up with...
PS you're not allowed to say "because JP is a strategic genius" :)
Obviously, WH0 is NOT happy with the data, and that's what counts.
To hell with potential bidders, and anyway Brian could be making it up about them being happy with the data, in order to delay winding up SOU and earn some extra salary before greeting the Receivers.
Unfortunately, that is the level of many comments on LSE.
These are facts:
The basin model has modelled the charge and migration of hydrocarbons in Tendrara, and was done by a third party. That modelling shows that hydrocarbons should exist and would give a high % chance to the charge of the prospects. This is borne out by TE8/9/10 - charge has not been an issue, reservoir quality is.
The prospect inventory was created internally and as far as we are aware has not been independently verified by a third party.
These are facts, as per the RNSs released by the company.
I appreciate you're trying to muddy the waters wh0s, and of course someone only does that when they don't want the truth.
The basin model was prepared by a third party using internal data, detailing up to 34TCF (see the Q4 update)
The prospect inventory is a different matter. We don't know who we have used (externally or not) to prepare this. Whether we have or not is really a moot point as you well know, as any potential purchaser will do their own analysis.
The only information we have on this subject is an email purportedly to be from Brian, who appeared to suggest that potential bidders were 'happy' with the data we had prepared.
The basin model was indeed created by a third party - it models the generation and migration of hydrocarbons over time. It is an input into the prospect inventory, but it is absolutely not a prospect inventory in itself. It shows how much HC was potentially produced in the source kitchen and how/when it migrated. it basically says there was lots of gas created and it's still there.
As we've shown 3 times now, the problem is not finding gas, it's getting it out of the ground commercially.
The prospect inventory is 100% internal, I invite you to check that with JP yourself. I'll state very clearly - there has been no third party work on, or verification of, Sound's 20tcf prospect inventory.
Come on, it's simple stuff wh0s. It is internal data which has been used to calculate a basin study by an independent third party. If you told the truth in the first place, we wouldn't have to lock horns.
With regard to your previous post, you and I don't know how a potential bidder will assess our data. However your posts suggest you know with certainty. The reality is, like I you are clueless in this respect.
it is reflecting that value - it's called risk. The market is pricing in a pretty low chance of a deal happening, hence we're at 8p.
btw @soundingoff - who are the third party that came up with our prospect inventory? Seems that the company thinks they are indeed "Sound's internal figures", as they say in their own RNS:
"additional exploration potential in the TAGI and Palaeozoic across multiple leads and prospects, which the Company has internally estimated to include an aggregate exploration potential of up to 20 trillion cubic feet (mid-case) of unrisked gross gas originally in place."
so why the SP is not reflecting that potential 15-20p plus some pennies?
So what you're saying is that we have a first-class prospect inventory, but instead of making those leads public so that we can all assess them and (god forbid) the share price can represent that potential somewhat, JP has decided to keep it all in house and ONLY show it to prospective buyers. If the potential is as great as you claim, why not make it public and have the share price move up to a level that reflects that potential? And please, don't tell me that not publishing it puts us in a stronger position - that is a JP-level of nonsense.
I am extremely EXTREMELY dubious as to the quality of our exploration inventory. The only reason not to publish it is that it's ****.
Yes TE-5 has value around 15-20p. The rest of Tendrara will go for a few pennies at best.
What I do know wh0s, is that you must be really desperate to post deliberately ignorant comments.
Firstly we know the modelling work was done by a 3rd party, an industry specialist and they are not Sound's internal figures.
Secondly, we have put a data room together. Funnily enough this will include the inventory you mention with play types and CoS. The level of data would make your head explode. Will poor old Shell not be able to prepare a CPR from that data if it wanted? Of course it would, so stop misleading people.
Next you'll be telling me this marketing/sale process is all a conspiracy to drag out a few months of wages. JP called up the King, ONHYM, OGIF, Schlumberger, ENEGAS etc and they all said no problem, delay as long as you like.
@soundingoff - you know full well why SOU's exploration potential will be valued at very little. Here are some reminders:
No indication of play types that make up the 20tcf
No indication of CoS (except that they are worse than TE9/10 as we were told those were the best CoS of all targets)
No independent verification of internal estimates e.g. via CPR
In fact they've never published any prospect inventory whatsoever past TE-10. We never even got a proper description of the prospect that TE-11 was supposed to target
They can shout as loud as they like that they've modelled 20tcf internally, but the same group modelled multi-tcf for TE-8/9/10 all of which are completely worthless. Internal estimates have as much value as Shaungreen's share price predictions.
LW, the 166p is based on the weasely phrase "1 TCF net recoverable resources to Sound Energy". It means 1 Tcf is SOU's 47.5%. Given that, it's not far from your own valuation. I'm more pessimistic as a 1-4 Tcf *potential* will not be unlocked by SOU without a dilutive raise. Nobody's going to pay the same for potential as for an actual discovery.
According to my calculations, if SOU had the same interest in that Iranian field as it has in Tendrara, it would be worth 73p per share per TCF, based on the figures in that article.
Based on the valuation of TE-5, 1 TCF there would be worth 50-71p per share per TCF.
I don't know where that analyst got 166p from.
If there's 4 TCF in Tendrara, it's got to be worth a lot more than 8p.
LW: 'What would an estimated 1-4 TCF be worth to SOU?'
'However, based on previous work, yes - there probably is 1 to 4 tcf in the TE5 area - but 40 tcf- forget it.'
What would an estimated 1-4 TCF be worth to SOU?
This may help you Exploration. Also the recent strategic RNS provides some guidance on drilling targets.
I really struggle to understand how you can post that interesting summary of the Horst and then post such twaddle regarding potential. To say the potential doesn't add value is the same as a mechanic suggesting car wheels are square. The value will not be what they could have been with success at TE8/9/10, but risk/reward means the targets still have value. As I say, if you read a few broker notes, you'll learn something.
'However, based on previous work, yes - there probably is 1 to 4 tcf in the TE5 area - but 40 tcf- forget it.'
I agree, but that's not what the 40TCF refers to. Do you understand the area being referenced to?
A firm offer for the T5 area based on anywhere between 1 & 4 TCF plus possible contingency payments for future success in greater Tendrara and Sidi. That would do it for most Pis. Count me in!!
I will be happy if investors see that we have more than 2tcf.
Let me qualify my response to Sounding Off’s post.
Maybe the ‘40 tcf’ is worth something close to zero, but the characterization of such potential is either negligent or innocent mis-representation.
Such descriptions rely on the lack of knowledge of investors, or perhaps in the case of Sound Energy on the inexperience of the Board of Directors.
For example, does it make sense that Tendrara ‘potential’ is bigger than the Troll gas field in Norway, in the northern part of the North Sea, with estimated recoverable gas reserves of 36 tcf? Troll is one of the world’s ten biggest offshore gas projects. Troll accounts for approximately 40% of the total gas reserves in the Norwegian sector of the North Sea.
I’m afraid the ‘potential’ of Tendrara + Sidi Moktar mentioned by Sounding Off doesn’t pass what we call in the industry the ‘smell test’.
However, based on previous work, yes - there probably is 1 to 4 tcf in the TE5 area - but 40 tcf- forget it.
The valuation process of “40 tcf potential” is pretty simple.
The answer is zero - it doesn’t exist.'
Exploration- If you have a read of a broker note or two detailing other O&G companies, I'm afraid you'll realise you're completely wrong. It goes against all the principles of the industry you surround yourself with.
Unless you've put the decimal point in the wrong place again? Who can forget the 'not enough gas for a bbq' comment!
Exploration. What is zero, the potential=gas in place or the value attributed to it at this stage? I remember you were talking about more than 1tcf around t5.
Total tosh exploration its worth something. What that is we don't know. Maybe I'll change my moniker to seismic potential evaluator to get more credence. That's a **** take by the way. !!