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Buckman
Lol. What a pathetic childish post. Grow up not that I'll ever know if you do as into the bin you go. Muppet!!
I think 5-6x is more appropriate for oil and gas based on some buy outs over the last few years but it really depends on the actual decline rates. You can also add some value for Coho2, if the economics are similar, they will drill a well producing 6 million per year declining at x for about 5 million.. What's the worth today?
Ginmunger - it's an approximation. I reckon the liquids pay for some of the decline. What p/e do you use for valuations? Always keen to learn.
Sorry Scott. Casca Deep might not help with defining the Casca reservoir as it's apparently a separate pool.
Beckmans context is everything though. You have been very pessimistic this calendar year which is of course is you opinion.
For me however I have held from 23.7p so it's my best performing share over the last 14 months. Sure it wouldn't be for all but I'm have with 4 folding a share.
You said it yourself there's no point arguing, the prices that matters is what you buy and sell for nothing in between. I look forward for seeing the price I sell mine at. Hopefully in another 14 months at 4x again
Hi Matt,
Don't forget the liquids, PB previously mentioned that Cascadura can get to 2000 boepd by the end of the year and eventually up to 5000! Not worth quite as much as oil but even @$12.5 per barrel.. We are talking about 9 million in revenue run rate by the end of this year. 3 million More than coho
Where do you get your multiple from for Coho? Are you adding something for the next prospect there? Remember the production on these wells will go down... Central Block is still producing at 50%.. Almost 20 years later but we don't know if Coho will have similar decline rates. Either way, it's hard to justify a high multiple for a commodity.
I think you are being a little too conservative on the legacy assets but way too generous for Coho. I think it's should be valued closer to 35m usd, more if they can get more gas but let's stick to what's been drilled.
10x for a decaying commodity asset is far too rich.
Highlandmatt: maybe not what?
beckmans: this is not the worst performing stock I have owned in 40 years of investing that includes the October 87 crash, the russian flu, the Y2K meltdown, the dot.com bubble, the 2009 meltdown, or even the March 2020 "hey the pandemic is real" collapse. (parenthetically it seems we may be sailing towards another downdraft market event, but who really knows). You must have led a charmed life on the investment front. Here is one that I held - Wells Fargo - then considered a pretty stable bank (and the pillar of Buffett's holdings then) - $41 in September 2008 to $10 on February 20, 2009 . Looking back further to October 1987 - EVERY stock that I owned then did worse than TXP has done recently. In fact the performance of TXP from inception in 2014 to 2 years ago was a LOT worse than the recent little slide. It dropped by 90% during those long years, from $2.50 when it formed a new company by combining Petrobank's cash with the old Touchstone - all the way down to that 20 cent range. That was a heck of a lot bigger drop than this recent little slide. I got my first TXP shares from my holdings in Petrobank and I did not sell them. ( I did add 10 times more as the story changed with the Ortoire exploration piece and I am nicely profitable after 6 years of being deep in the red on those original shares)
So TXP went up 10 fold , and then pulled back by a third. The stock pulled back, but the story is still intact. TXP is by far my highest conviction stock in the "high risk speculative positions" part of my portfolio.
In the last 3 months probably the worst performing stock I have owned in 35 years of investing including the dot.com bubble and the 2009 meltdown. Seriously don't even know why I haven't sold the last of the stock I have been holding. Now that I got that off my chest I will refrain from posting because I have nothing good to say about this near fiasco performance of late.
Maybe not, Scott. Paul stated on 29th Apr that the test on Casca Deep was a different sheet and a separate pool to Casca 1.
The extended pressure build up testing at Cascadura Deep will be interesting. It will give them more information about the reservoir and help them peg the right initial production figure when they bring it online into the NGC pipeline spur. It is possible that it might come on higher than the 23 mmcf/day from the 24 hour flow test, again depending on the reservoir characteristics. Paul hinted about that on one of the calls. Would be nice to see that well come on at 30 mmcf/day and that might happen. Not that big a deal since more Cascadura development wells are coming. But any little upside surprises right now are welcome. Regardless what the final number, the production form Casca Deep will much more than current production by TXP. And the production from cascadura1-ST will be more than from Casca deep.
It’s looking like June. I’m thinking second week but could be later as other factors to consider.
60 day drill as going deep so August completion. First results around September time depending on what needs to or can be analysed.
All IMO
Chinook timescales - Paul has consistently over the last few weeks asked folk to give TXP and the consultants 60-90 days to scratch their heads and figure out what is going on. Given the Chinook RNS was 31 March, you could argue they've had 45 days so far, but it probably took them time to get the consultants involved and Paul was still talking 60-90 days on 29 April presentation. Therefore I'm hoping for news around end of July.
Royston timescales - my recollection is end of May/start of June for Royston spud. Have I missed soemthing?
Nice outline Highlandmatt seems to align with my rough estimates as well.
I am surprised to see so many people with itchy hands. For me, the next two months(ish) alone could be tranfomative. To reiterate the road map:
1) Casc Deep - Extended pressure build-up survey - min 4 weeks from 12/4 therefore could be ANY DAY NOW.
2) Chinook - Extended Well Test on pump - I'm not sure about the time frame of this as it all got a bit confusing for me.
3) Royston - Spud by the end of June (fingers crossed)
4) Coho - IMO could be quite a while as Shell seem to be playing hardball and we know the speed at which NGC gets things done.
Re Coho while I would like to see it hooked up the delay doesn't bother me too much as the gas isn't going anywhere and we have a fixed price for it.
It's easier to see the price go up than down but I've noted the LTH here have gone quiet because they know good things come to those who wait (diligently).
IMO DYOR
My rough calculations on mcap value are:-
1. Legacy oil in west = £15m
2. Coho @10mcf/d = $6m net p/a = £45m
3. Casca (2 wells) @60-70mcf/d = £36+m net p/a = £270m
That gives £330m on what is found so far (approx £150p per share), and matches the Investor Chronicle forecast for income, and applying a p/e of 10.
This gives nothing for additional wells at Casca (certainty), any value to Chinook (a light oil discovery with a large pool), or any other future exploration. The IC forecast is for cash flow of $80+m in 2023, which would give mcap of £600m (approx £3). That is easily achieved with another 2-3 wells in Cascadura. So a decent bet on tripling from here in 2 years.
If Royston is only the same size as Casca, then that adds another £500m to the value (another £2.50), although it might take time to reflect in the SP. Ascribing 30p to the success case is conservative, to say the least.
If Chinook turns out positive, and Royston hits, then £5 by 2023 is possible. We should know something on both in August, and if positive on both, should revisit recent highs (175+p) and I would hope for £2.
Stay the course folks, there's plenty more to come.
I thought same even though no expert. Even 430bcf and $55/bbl oil the SP target of 160 doesn’t make sense. I guess that’s why so many change brokers from finnCrap!
Trek
30p a share allocated for Royston strike, and it’s bigger than all the rest of Txp reserves put together!
if it comes in, it’s worth a whole heap more than 30p. The guy who wrote the report at Fincapp is obviously a half wit.
FinnCap today on email....
“
Not much of note in Touchstone’s Q1 results, although the oil price recovery has spurred increased workover activity on its mature base oil business, stabilising production. Cash resources remain strong and Touchstone has significant remaining headroom on its credit facility, which alongside existing cash flows should cover this year’s work programme. Our risked-NAV and price target fall slightly, by 4% to 157p/sh, due primarily to lower net cash balances, but the impending Royston exploration well could materially add to this.
?Volumes stabilise as workover activity increases. Crude oil sales fell 18% y/y to 1,297 bpd but have stabilised, rising 2% q/q, following increased workover activity. This should show a larger impact in Q2, when the full benefit of the workovers is felt. Realisations were 14% higher y/y at US$52.4/bbl, helping limit the decline in revenue, which was down 9% to US$6.1m. Royalties rose in line with realisations, while unit operating costs were 8% higher y/y at US$14.7/bbl, with COVID restrictions still in full force in Trinidad. Operating netbacks improved 18% y/y to ~US$22/bbl, their highest level since Q4 2019. G&A rose US$0.37m as activity increased ahead of first gas from Coho and Cascadura, while income tax expense was up US$0.31m. This drove a Q1 reported net loss of US$0.46m, down from an underlying breakeven in Q1 2020.
?Funded for this year’s exploration programme. Funds flow from operations declined to US$0.54m from US$1.26m in the prior year period. Cash fell to US$15.5m from US$24.3m due to a US$10.6m increase in working capital and ~US$3m of exploration spend on Chinook-1 and Cascadura Deep-1. Touchstone has still drawn just US$7.5m of its US$20m term credit facility. The remaining facility alongside cash resources and expected cash flows should be sufficient to cover its 2021 exploration commitments, with cash flow ramping up sharply once Cascadura is onstream in Q4.
?Royston on track to spud this quarter. Management remains focused on bringing Coho and two Cascadura gas wells into production this year while also drilling Royston-1, the final prospect in this phase of the Ortoire exploration programme. This well is still on track to spud this quarter and is expected to take ~60 days to drill. Touchstone’s shares have stabilised after the sell-off following the disappointing Chinook-1 test results in late March. Work is still in progress to fully understand these test results, but investor appetite is likely to be rekindled with the approaching spud of the Royston-1 well. This is targeting the largest prospect on the Ortoire block so far. We assume a 430 bcf prospect, which we value at 30p/sh, assuming a 50% chance of success. Success could add ~30p/sh to our 157p/sh risked-NAV....”
Trek
Basically the market has given absolutely nothing whatsoever for Casca deep and to think Coho on it's own more than doubles the production let alone Casca and Casca deep.
Let's hope when the test is complete at Casca deep they lift the price up as this is taking the pi ..