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"The question I’m asking myself is why someone like yourself would put in so much time and effort and write a novel trying to tell us our investment is a waste surely they would just find a share with a rosier future. "
I *have* moved on to other investments, but I still have a significant chunk here. I'm *not* saying your investment is a waste, I am merely defusing the hype from people who are saying the share is going to fly anytime soon, since there is no possible near term source of transformative news flow. The news about Phase 1 contracts will merely confirm that SOU is on track to be worth zero instead of a lot less than that.
If all goes extremely well, SOU may get back to where it was five years ago -- ahead of the TE-8 drill -- in about five years time. It will have lost a decade, but will at least have a sustainable footing for exploration funded from revenue going forward. It would be nice if people spewing hype about nearer term price hikes would give some basis for their speculations. My fact-based "essays" tell you why they're wrong.
I'm also increasingly leery of the unofficial "news" being put about by Graham. Last year he told us Covid wasn't slowing him down, but he missed all his deadlines. This year he told us that the tax bill wasn't slowing him down, and yet we now read:
'Lyon said the company would look closely in moving forward with a final investment decision on the bigger development project "while the tax dispute is hanging over us and this is the way we're going to be treated."'
First of all it sounds needlessly petulant. Second it gives the lie to his previous statements about the tax bill not slowing him down. And third, it implies that Phase 2 FID is imminent as soon as the tax demand is dropped. Pull the other one Graham. You have $200m to raise first and you're not even on the starting blocks. It's starting to have the air of James "I could lift the phone and sell this company anytime" Parsons.
I credit Graham with steering the good ship SOU off the rocks. But he needs to close the Phase 1 contracts just to repair the gaping hole below the waterline. Only then can he even begin the perilous voyage to a New World.
No pal. The question I’m asking myself is why someone like yourself would put in so much time and effort and write a novel trying to tell us our investment is a waste surely they would just find a share with a rosier future. There is no logic to what you are doing. I’m happy to let this play out in whatever timescale safe in the knowledge that gas is in huge demand and energy prices at an all time high. I wish you well in your efforts to tell me differently. He he
Yeah, all those potential farm-in partners in the data room must have died in there. They've been there since before August of last year according to Graham in the below video. Remember to stop up your ears where he says (twice) that Phase 1 FID would be in H2 2020, that the ONEE GSA would be signed "by the end of the year if not before", that Covid slowed things down but they are "now back on track", and that the ONEE agreement depends on "proving up the financing" (which is the exact polar opposite of what he is now saying). But he also says that "putting the financing together on [the pipeline] is being done" (which it clearly wasn't, as more than a year later he now says the GSA is needed before they can even start).
It seems to me that all the people proclaiming "in Graham we trust" haven't been carefully following his litany of changing narratives and missed deadlines. But no doubt the data room is packed to the rafters. The question you need to ask yourself is why would anyone farm in to exploration with SOU when there is plenty of other Moroccan acreage available, SOU is a financial basket case that would need a 100% carry, and their wonderful Tendrara basin model led them to drill three back-to-back dusters. What exactly would SOU be bringing to the party in return for their share of the exploration upside?
Plenty of upside here. Ever heard of a farm in partner? Same old fundamentals. Morocco needs a gas supply and sound owns the license area. I think 24 thousand square kilometres to be exact. Your efforts to dissuade everyone has to be commended but you are peeing in the wind!! He he
There are three times as many shares now as when the SP hit £1. To get back there would be the equivalent of £3 back in the day. Even the £1 was based on ludicrous hype that nobody is going to fall for again. We were misled about the value of a Tcf to SOU. We were misled about the value of the already discovered assets in the ground. Remember when the SP was underpinned at 54p just based on the TE-5 horst? Turns out it was half that, and you can now divide by three because of the subsequent dilution. Then knock some more off because the LNG -- while getting to revenue sooner -- is less efficient.
That pretty much gets you to the SP Angel valuation -- a target price of 8.2p. And even that's contingent on closing the Phase 1 deals AND raising the pipeline financing. For the time being SOU is no longer an exploration company, so I don't know where people are imagining that any transformative news flow is going to come from. It's hard to see where the money for next year's Annoual well commitment is coming from, and the SP Angel outlook shows no other exploration drilling before 2025. It's going to take Herculean efforts and a lot of good luck just to get to the 8.2p target price. Crazy notions of £1 are for the birds.
I don't want to rain on anyone's parade, but the SP Angel valuation is there for all to see. (Oh, and bear in mind that their valuation is a MARKETING COMMUNICATION with SOU as a client, not independent research, so it's unlikely to be unduly pessimistic). I wouldn't be betting on "a bigger fool" to come along and pay over the odds, let alone a major taking out SOU at some crazy valuation. In some ways, having a plan mapped out makes a hype-driven increase in SP much less likely. We KNOW what the most optimistic future looks like, and it likely doesn't involve any exploration bonanza inside the next four or five years.
graham said tax couldgrag. the 29 could be extended. Shell is in another business of renewables. they might even be out ofmorocco. btw, can sound usethe land to develop renewable energy? hydrogen..that would changethedynamivs.
pduk, i totally agree but i've been in this more years now than id like to remember & if hype takes this to a pound again id be gone as would many , i believe this will come good & believe me i need it. As for the watertight i believe it's not london that a leak might happen but possibly from the Moroccan side. Yes the new board are doing a good job lucky for us all.
"Shell & others must be looking at this like a hawk", it's stupid comments and misinformation like that which propelled this to £1.
"As we know Sound can't keep leaks watertight " Really? Not sure why you're referencing old trends from the previous BoD but the new, current personnel have down a pretty good job of keeping things locked down.
Do you not find it somewhat worrying that the following is going down to the wire (3 days remaining) on something which apparently Morocco desperately needs?
"The LNG SPA is conditional upon fulfilment of certain conditions precedent including:
· The approval of the LNG SPA by the Concession joint venture;
· The execution of a loan note agreement between the Company (as borrower) and Afriquia (as lender) setting out the terms of an US$ 18 million secured loan with a 6% annual coupon and a 12 year term;
· The execution of a project contract with Italfluid Geoenergy S.r.l (Italfluid) for the provision of a gas processing and liquefaction facility relating to the Phase 1 Development;
· Receipt by Afriquia of regulatory approvals for the transportation of LNG by tankers and the sale of LNG; and
· Afriquia having secured in principle agreement from downstream buyers to purchase not less than 60% of the Annual Take or Pay Quantity under the LNG SPA
such conditions to be satisfied by 29 October 2021."
Graham and Co are doing a great job but they have inherited an absolute mess!
Shell & others must be looking at this like a hawk, with the urgency for the gas i would have thought a big player would be needed & sooner rather than later. As we know Sound can't keep leaks watertight & the rumor mill can't be far off.