The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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I took a slightly different approach to you partridge, but get similar figures (2.5p/1.5p). I grossed up the GSA figures for 66m scuffs p/day (unlikely you'll get the same rates but only an estimate), used £1:$1.3 and allowed for 20% royalty and operating costs. The field can run for 15 years on a mid case basis, but of course should be front loaded due to field degradation. Also we'll pay corporation tax after 10 years.
What language does this guy Malcy speak? Just listened to this podcast. When someone says: " **** or bust" people usually notice. I cannot remember Mr Parsons saying or writing anything remotely similar in the past. Or Malcy either. There is, if I'm not mistaken, a little back scratching going on here. Mr Malcy was a little lax on his facts. It would seem his reporting skills are lax too. If he was to be a little more honest perhaps Sound shareholders would be " pleasantly surprised ".
Exactly. If SOU were to start paying a dependable 1.5p - 2p dividend per year the share price must rise to reflect at least a discounted valuation on that. That is bare minimum -- SOU at 14% share of the horst gas with no further discoveries. Assuming SOU don't pay any dividend with proceeds of the current sale transaction they will also have funds for further drilling. It's not going to be the "four figures" we may have dreamed of, but it's far from negligible. People with high averages will take a hit -- I expect to myself -- but it ain't curtains.
Eventually people will wake up and see the value.
When sound start paying even 1.5p a year in dividends, the Sp would be well north of where it’s is now.
Partridge the 2.6p figure would give me an annual income of 10k a year. That’s better than a kick in the teeth.... I’m 58 so would help my retirement somewhat....
At £= $1.25, that $32.62million is worth £26million or at best 2.6p/ Sound share, whilst $20million is worth £16 million or 1.6p/Sound share.
" all Being well in a Few years the Horst will be producing $170 million of gas per year".
According to the figures given in the MOU agreement the horst is capable of producing $140 million per year.
https://www.investegate.co.uk/sound-energy-plc--sou-/rns/tendrara-gas-sales-agreement--signature-of-mou/201910300700035418R/
23.3% of $140 million is $32.62 million and 14.3% is $20 million.
I take what Malcy says with a pinch of salt but I do actually agree with what he says. I was initially disappointed because I wanted a clean sale so I could move on but now I've had some time to digest I don't think it's that bad a of a deal. The only downside is time but in 1-2 years we could have regular dividend payments & have more commercial discoveries. That sounds better than a cut & run 25p.
all Being well in a Few years the Horst will be producing $170 million of gas per year.
That’s without any further discoveries.
Don’t forget we are carried until first gas, no capex at all.
Not invested in here but just adding my 2p here on an interesting subject. All these consultants get paid to big up a company or have a vested interest, so do not take what they say at face value.
Just a few months back he was pumping eco at 1.5-1.7 and had a target price of £3. Well you know what’s happened to that in the last week or so.
Jones 1980, ‘Oil Man Jim’ has about as much knowledge and insight as most of the members who have miraculously appeared from no where on this board in recent months but pertain to be experts in Sound Energy, O&G and common pleasantries to fellow humans...
Malcy sings to the highest bidder and has no qualms about what the consequences of what he says
I am learning to never trust anything a big fat shmoozer says, and he certainly is this. I am retired now and have done okay ion life by working hard and doing the right thing but I was always amazed and puzzled by the shmoozers I met in the ICT industry...
....or was it £30 per share he suggested? I think it was wasnt it?
I should have added;
From our perspective the JV should be under jurisdiction of English Law.
The agreement should comply with GAAP standards.
I expect both Sound and Purchaser will want this anyway.
Malcy said the share would be worth up to £23 not so long ago.
PNE79
Malcy is taking in general terms. The detail of this deal will be in the ‘JV Agreement’ mentioned in the RNS which defines how revenue is divided between the Contractor Parties (i.e. Sound and Purchaser). Malcy uses the term ‘royalty’ loosely without knowing what it will be.
In Oil & Gas Jv’s Sound’s interest could be a Net Profits Interest, a Production Payment Interest, an Over-riding Royalty Interest and a range of other definitions. These agreements are largely determined by accountants because somebody has to untangle the production and cash flows to ensure everyone is paid. I doubt anyone in Sound or Purchaser has the knowledge and experience to write such an agreement; it will likely be outsourced to the likes of Ernst and Young, supervised by Rothschilds.
A JV which favours one side or the other is to be avoided. If its not a balanced deal it will be unsustainable since both parties are joined at the hip for a decade or more.
Hi PNE,
The share price was 50p before and beyond, there are no reasons as to when confidence is restored we don't see these levels again. We are going to have some exploration drilling to look forward as well, I am not saying we will see 50p next month but within 12 to 24 month period it's not beyond the realms of possibility.
I took it to mean 50p's worth of gas over the lifetime of gas production with royalties the upfront cash payments, not a share price of 50p, I could e wrong but malcy was rambling on. He didn't mention our debt, that we could be using the cash to further explore or our current dangled carrot, I mean possible farm out of sidi.
And there lies the many problems ziggy as you cannot ! Not with this bunch.
I'm not to sure how anyone can workout Royalties as that will surely be based on Gas found going forward...if they don't find much we don't get anything....Horst was meant to underpin the SP way back but we all knock what happened there.
Can one of you experts please explain the royalty payments?
First dibs on the Cake Trolley again lol
Bb
50p Malcys been on the sauce or got an extra large bung
cheers mate