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'SoundingOff
I read your posts on here and I genuinely admire your unwavering faith in Sound. It’s conmendable and you seem to support your opinions with facts, maybe facts with sound tinted specs but facts to some extent.
My question is this- Based on projected Horst value, seismic data and licence area the size of Belgium/Qatar/Australia/China etc... why no bids? Do you think there have been bids or bids are being considered? What if there are no bids or bids are made that aren’t satisfactory to the board/shareholders? If this company goes south will you be able to admit you called it wrong? Personally, I suspect we’re heading for liquidation in some form. I just can’t see anyone putting money on the table for a distressed seller. Would you pay top dollar for all this? Like I said, respect for sticking to your guns but at some point you’re going to have to take a step back and admit you may have called this one wrong.
Maybe'
Gekko- Talking of faith- The use of the word 'disciple' is used quite often by a few here, when ironically they are the ones who are devoid of rational thought.
Eastern Morocco certainly isn't the asset it was once expected to be, but if you read a bit about what those in O&G circles want, Eastern Morocco should meet their criteria.
The development has a value and it meets the criteria that O&G businesses want- gas, pricing, infrastructure, onshore, in-country taxation etc etc. Then the exploration comes down to nothing more than risk vs reward.
We are also able to ascertain a ballpark figure for our NPV based on broker notes of other fields/exploration. That NPV figure is £1+ from my calculations and there's certainly no tinting of any kind.
How does that translate into a deal and it's value? You, I and everyone else on this board don't know.
With reference to your questions:
We have no idea of where we are with bids. So most of your question is moot. My view is the longer this goes on, the more likely a bid(s) is being negotiated, especially if another few weeks ticks by. However I'm also well aware a deal can fail at any point.
Your view is based on us being a distressed seller. I'm afraid that is simply not where we are right now IMO. We have a significant development and, as a person who works close to the field of finance, talk of liquidation does not make sense. Have you done any research of businesses coming to the end of their lifecycle either through planning or liquidation, and compared that with the results of a sale vs NPV?
The risk for me is the failure to get a deal and then we would have to consider the next move. Without a leveraging of the Horst, we would suffer significant dilution. Saying that, I don't think it will come to that because of the risk/reward available, and resulting from favourable conditions that no O&G company has yet been able to exploit in Morocco.
Soundingoff, point taken, all the best.
Sorry, I forgot the quotes on the post below for Ian's comment.
With respect, you do seem to be the oracle on Sound and I expect you also have a very low average share price holding so do not feel the pain of those with a holding of a much higher average.
Ian- We used to have plenty of people posting great stuff on this board (negative, neutral and positive), but most have been pushed out by constant posting by morons. I've always kept a mental note of what people have posted and the knowledge imparted prior to TE9 was fantastic, if optimistic at times.
Post TE9/10, my average is much lower than it was. But the SP is still most definitely painful to see, and with hindsight, there are plenty of things that should have been done differently. That doesn't mean it's not possible to post sensibly using research rather than emotion.
Thanks, Exploration for correcting the post.
Good post-Partridge,
Have a good weekend.
Here’s the post;
RE: When post get removed01 Oct 2019 12:26
Gassy
Thinking it through using published facts and figures, it is plausible that the value is there although the technical team has failed to see it. Sound is doing itself no favours by neither publishing its own prospect inventory nor a CPR which would provide more credibility.
I posted the comments below yesterday, but the post was removed within an hour. Since it was based on open-source information, I can only assume it was removed because it may have been uncomfortably close to the truth for someone.
Recent posts seemed to agree we will never see Sound’s Prospect Inventory or a CPR for Tendrara. So how can investors understand Sound’s NAV for the property through the eyes of a prospective buyer?
Come to that, how will Rothschilds/Sound justify and recommend the ‘right price’ to shareholders without revealing the commercial metrics in terms of, for example, $/bcf? Will it be a fair value relative to the current market value? To put it another way, does Sound run the risk of selling Tendrara ‘on the cheap’ by failing to understand its own full value potential to potential buyers?
As ‘advertised’ Tendrara is a 10,000 boe/d development + some risky exploration over the long run. But it could just as easily be a 50,000 boe/d project or even more, as described below, with some modest ‘close in’, low risk exploration with a short cycle time. This will attract the attention of potential buyers.
Tendrara Value?
MPE and Fastnet identified the following targets, with ‘most likely’ prospective resources (gross) in 2013. Remember, these PRE-DATE the staged-frac tests of TE6 and TE7, so the risks are probably substantially lower NOW because Fastnet’s risks were influenced by perception of poor Tagi reservoir/production performance without stimulation. Furthermore, various studies of the 3D seismic around TE5 showed amplitude anomalies at Tagi level which might be associated with better reservoir properties. The high side unrisked prospective resources in just this relatively small area of Tendrara exceed 4 tcf.
Belgrinate 212bcf
Rass 353bcf
TE4 262bcf
TE1 312bcf
SBK 205bcf
TE5 310bcf
TOTAL 1655bcf
See pages 14 and 15 of Fastnet’s 2014 presentation for maps/locations of these prospects.
https://www.proactiveinvestors.co.uk/upload/MediaFile/File/2/fastnet_proactive_presentation_july_2014_53c8e2af4de98.pdf
Taken as group, TE5 and nearby prospects could form a commercially robust development hub instead of just TE5 on its own because reservoir effectiveness is more likely to be correlative with TE5, 6 and 7. Here is a link to Edison’s report showing original CPR resource numbers. This is all open source material.
https://docplayer.net/43278631-Fastnet-oil-gas-building-moroccan-momentum-once-again-tendrara-cpr-moves-drilling-closer-foum-assaka-farm-out-terms-eagerly-anticipated.html
Significance;
In a success case, drilling these prospects increases
Gekko - 5k in at 30p.......you’d be better spending your time getting another paper round rather than here.
This guy Frank is symptomatic of all that has been wrong with Sound Energy. He, and his posts and his easy access to Sound management has been used by Mr Parsons and team as part of the outlandish over exaggeration of the worth of Sound Energy and its prospects. I imagine it has been mutually beneficial. As a person who described a Sound RNS as a "turd" it was surprising to see his easy access to Mr Brian even as late as Te9 and perhaps later. Not that I disagree with what is written. It should be remembered he was a willing participant while it suited. And it would not surprise if that avenue of communication was still open in this period of news blackout for the hapless investor cajoled into investing by the many well placed words on this board and elsewhere. In the spirit of WW2 propaganda : keep mum, you don't know whose lips are moving.
Evening again Soundingoff, you just posted this:-
"And surprisingly, Exploration recently posted a relatively neutral statement on the Horst and surrounding targets"
well, the most recent post that Exploration has posted that I could find on the subject is this, forgive me if this is not the one:-
Exploration
Posted in: SOU
Posts: 816
Price: 8.06
No Opinion
RE: Thoughts13 Oct 2019 17:27
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.
Gekko, if you really think that, then you should sell up and move on. Painful but better than 100% loss.
Fair enough Soundingoff, as stated I had not seen this information before and did say others may have seen it, and it was from last May, but it does explain why Frank no longer posts on Sound.
With respect, you do seem to be the oracle on Sound and I expect you also have a very low average share price holding so do not feel the pain of those with a holding of a much higher average.
We want to know the truth on where it all went wrong, and I stand to lose a lot on this so-called investment.
Thank you for your correction to my post of Franks.
Have a good weekend
Ian
And surprisingly, Exploration recently posted a relatively neutral statement on the Horst and surrounding targets.
Ian- You should really be posting the discussions we had on Frank's post, as a number of points are incorrect. The Horst calculation isn't correct and should be based on NPV calcs. The Progressive Report on the Sound website calculates the NPV10 value of the Horst at $350m and includes development costs. A number of variables have changed since such as the TE7 recoverable bcf multiplying by a factor of 3. Added to there there are also additional reserves as per the RNS detailing the CPR. Recent RNS also summarise the estimated size of future targets.
Frank James Smith as you know used to do great wright-ups meeting JP and the company in the past, he sort of took over the crown where Crude left off, I last bumped into Frank on the Silver Sturgeon Sound Thames cruise, he has not posted much on Sound since that last meet up when he described the journey down to London with his daughter etc.
I wondered why and delved into Facebook to find this, which I had not seen before, some of you may have, this is just Frank's view on things from his Facebook post in May. At the end is another snippet as to why he no longer posts or meets with JP.
Frank James Smith 28 May
Not sure if this will be a popular opinion or not but I have been racking my brains and thinking of the value of sound with the current TE5 horst and the rest of the license area.
Is sounds 47.5% share of the gas at the TE5 horst likely to bring a higher LE sale price or is the rest of the licence with its potential likely to bring in a bigger price tag....here are my own personal thoughts....
$2bn worth of gas at te5 horst, sound share is 47.5% - $950m of that gas is owned by sound. Buyer might pay 25% of that top end so say $250m at best, they then need to pay for infrastructure and pipeline and wells and network and so on and so forth.....the rest of the licence has PROVED to be difficult to find more gas....TE8 (fail) TE9 (fail) TE10 (fail) there was an article called the north African paleozoic hydrocarbon systems (or something along those lines) it stated that the paleozoic in the north east of Morocco was a dwindling and eroded geology....it appears this is turning out to be the case, at best there could be 100 - 200 - 300bcf pools spread around the licence and it may take an uneconomical amount of infrastructure, exploration and wells to find and extract.....I can't see the licence, that is mainly unproven apart from te5 horst bringing in a premium for any LE / sale. I fear that JP spin, carrot dangling and salesman patter has created a retail monster over the last few years that has ended up in misery for thousands of investors.
The saving grace is the trading frenzy that may ensue while snippets of deals and who is looking over the fence will come to light from the sound salesman.....this could trade between 10 and 25p over the coming months but the end sale price could be a huge disappointment, there are more reasons to suggest the geology under the world class 1km salt seal is nothing more than an end of life gas field with pockets of hydrocarbons trapped in areas that are not particularly significant enough to get excited about; and then when and if they become a "discovery" like TE10 was banded as a new "discovery"....the hydrocarbons may prove to be bound in tight sands and non commercial....this is the pattern to date .....te8 had eroded westphalian sands.....te9 pure dust and te10 discovery too tight to become commercial.
See Part 2