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Can’t wait to listen
I'm a huge fan of that £70million cash flow to sound
I am assuming that this wouldn't be until 2026 at the earliest though?
KTF - thanks for the summary again which was really useful.
I too heard the above, but missed about 40mins of the initial q&a which must of included the Annual drilling element.
It would be exciting to receive any update regarding a potential drilling campaign here.
sorry, I wasn't sure and I'm not going to post what I thought I heard as it would certainly be seen as ramping.
I think we will find out soon enough as to get Anoual drilled this year they need to get things moving.
we'll hear who the partner is soon enough. Suffice it to say John mentioned majors AND super majors
KTF....******.....if you heard it you should share it, I would and you should....! :)
soundas - I posted this during the Q&A
Phase 1 23m/year revenue
phase 2 100m/ year revenue
leading to 70m /year free cash flow to sound!
what's the market cap?
interestingly I may not be able to confirm what I thought I heard when john was talking about Anoual drilling.
He said they were talking to a partner and it wouldn't be in our interest or ????s interest to give a running commentary.
I thought the ???? were a name and hoped to check when the recording was available, but apparently it may not get published for some reason.
Of course I may have misheard which is why I’m not posting what I thought I heard.
Hi PS200306,
Thanks for your detail and thoughts regarding Phase 2 pipeline, funding and the various potential impacts with dilution and funding. Its good to hear this perspective and always useful to keep peoples feet on the ground with this, particularly given the history.
Personally I do think that there seems to be improved sentiment with the company and with Graham and the new BOD's With various global factors working in sounds favour I think that Phase 2 funding will be confirmed this year, but like you say at what impact to shareholders with dilution remains to be seen? (At least there is still plenty of discovered gas to extract)
The revenue summary from yesterdays Q&A was promising (I forget who summarised it earlier on this BB?)
Lets see what happens
GLA
SoundasaPound1, I've never thought the pipeline wouldn't get funded... or that it would. I've no crystal ball and no more way of knowing than the next guy. All I know is that the longer it takes the more costly to SOU's shareholders as debts become due and have to be refinanced. Hopefully Phase 1 will stop most of that rot although I think LNG revenue is going to start just a bit too late to meet all SOU's commitments.
If I was a shareholder (and I *am* but have written off so much of my stake that my interest has waned a bit) I'd be keeping an eagle eye on whatever Phase 2 financing arrangements materialise. As with Phase 1, SOU isn't in a great bargaining position for finance. Phase 1 didn't turn out too horrible, but the cost per liquefied mmcf is higher than the industry average from my rough calculation. If you take the AG loan and its 6% coupon, plus the lump payment due to ItalFluid on completion and the ongoing lease cost, I reckon the costs are about 50% higher than if SOU could have afforded the plant themselves, perhaps $3 per mmcf instead of $2 (note: total back of an envelope calculation).
If this sounds nitpicky ... well there's a lot of nitpicky things over the past three years that have added up to a LOT of shareholder dilution. The mode of Phase 2 financing will be crucial. SOU is not in such imminent danger of going to the wall now that Phase 1 is in the bag, so not so much over a barrel, but it's still trying to raise many times its market cap for Phase 2. How much equity will they have to give away? If there is vendor financing, how much will the transit costs for the gas be? GL mentioned mezzanine financing previously. Apart from the cost, that also entails convertibility to equity in the case of anything going wrong, ahead of any shareholder claims.
All things considered GL has done a pretty good job so far but with a lot of dilution, and there may be more of that on the cards. Unfortunately, SP Angel haven't really given details of what they factored into their target SP for Phase 2. Also, if the timeline turns out similar to Phase 1, you are looking at first pipeline revenue in (late?) 2026 and not 2025. But like I said ... no crystal ball.
I got on okay
https://us02web.zoom.us/j/87055342580?pwd=TWxTd2crRVRrUHJaT1dKb3M3ZkIvZz09 Meeting
I’ve tried to get on but can’t so given up
Only 30 people in the chat, 5 of those are staff / Malcy
PS - to me it sounds like you are now far more optimistic that Phase 2 pipeline will actually be funded and get the go ahead though...... Just not within the expected timelines.
This is quite a positive tone to hear from you for those long suffering and patient investors.
GLA
Utility, I don't believe the pipeline will be up and running withing two years. Financing and FID would have to be happening NOW. I'd say 2026 is more likely at best. That's not necessarily a calamity for eventual revenue. European gas prices had shot up long before the Russian invasion of Ukraine. Sanction on Russian gas imports may well last long after the end of that conflict. Supplies of LNG to Europe from the US will ramp up, but slowly. US gas producers got stung the last time prices collapsed. This time round they are more concerned with paying down debt than rapidly expanding supply.
I don't think any of this matters much anyway. Half of the Tendara capacity -- 30 of the projected 60 mmscf/day -- will be at a price agreed with ONEE two years ago. There is plenty of profit at that level, without the windfall of current high prices. Anything additional would be icing on the cake. If there are headwinds it might be because of a global economic recession caused by commodity shortages. Gas will still be in demand.
SOU's problems are much more short term -- where is the financing coming from, and on what terms?
Maybe it’s farm in news & that would have tobe announced on a specific day ?? Live in hope . Gla
Surely shareholders would be interested in the company's current position with respect to the civil works and future planned events, these are not price sensitive items yet would be more than welcomed by investors, knowing that the two year production target gets shorter by the day.
A nice juicy RNS has never preceded a Q&A session. And tomorrow will be no different. If this were to happen, it could infer that the company are sat on price sensitive news and this is against stock market regulations.
Just a couple of points. When is the first gas for export expected to be out of the ground. I ask because i do not believe that current wholesale gas prices will maintain this level for more than another two years. Also much of the gas will be for use in Morocco and they are not going to be paying top dollar.
Yes we potentially or probably have huge amounts of gas in the ground but we need it out and for sale. Sorry to bring this up again but there are other oil and gas producers in a more advanced position than ourselves in Morocco.
Finally the Russia Ukraine conflict will not go on for ever, certainly not another two years in my opinion and Russian gas will be back on full flow to Europe which needs it. Just something to mull over as you tuck into your Sunday dinners. Lucky dabs you. Goats milk for us.
I agree with StMary, there is little point in a Q & A session with out new news.
I would guess that the Q & A was timed to coincide with an RNS. Leaving it until Monday is cutting things a bit fine but hopefully there will be one.
I sent to them a few questions about how they are planning to fund the development of the phase 2 of Tendrara, exploration commitments at the other licenses, etc. I'm afraid they will answer by the standard "all options are open".
Unless of course there’s an RNS on Monday morning. Stranger things have happened.
I have a much more important meeting to attend. My local jubilee party. Mini sausages, tuna sandwiches and corn beef pasties. All swilled down with Vimto. We will obviously sing God save the Queen and later in the day it will be all Vera Lynn numbers. Your Majesty.
"I think the most important issues to be clarified next Monday are related to how are they going to fund ... " phase 2, drilling, seismic, etc."
That's not going to happen at the Q&A. If they knew the answer there would be an RNS. Every Q&A is preceded by people hoping to hear commercially sensitive information. It never happens, because it *can't*. They will tell you what they've already told you ... there are various possibilities and they are speaking to interested parties.
If the Civils are ahead of programme....then It'll not be a ' complete waste of time'...
I think the most important issues to be clarified next Monday are related to how are they going to fund:
- development of phase 2 of Tendrara production concession
- 1 exploration well commitment in Anoual permit (US$ 8 mm)
- 500 km 2D seismic commitment in Sidi Mouktar (US$ 4 mm).
If they are going to keep talking about the progress of the civil works for the phase 1 micro LNG, or how our gas is desired by the market, it will be a completely waste of time.
Regards