Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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An rns with further delays will be devastating for the sp. And even with good news, like Wentworth, a 25% rise takes us to ~1p. Whoopty f@#king doo.
For the 1st time I feel Prosciutto's update today will actually be closer to the truth than ever. Sadly
All-time lows again, shameful.
Wentworth is currently Up 25% having secured the approvals it needed from the Tanzanian Government. They are making decisions and hopefully they will move on to AEX/ARA now, although hopefully the ARA approvals have been running concurrently. News should be very soon and look at the effect on their share price just from that news as they now move to compete their transaction.
Why Tanz, for goodness sake how many more times?! The same reason as you, the assets Tanz; and the same reason as for the last 14 years (soon to be 15). Inevitably 15 years of attrition has eaten away at the upside but there is still some upside and my average is now the lowest it has ever been. So whilst I don't think we will see 7.8p again (not whilst I remain a shareholder anyway) I do think I will get out with a profit relatively soon... then again we are talking "Tanzania" of course so nothing is guaranteed ;0)
I hope to turn that Hold into a Buy at some point soon but yet again we are in "Radio Silence" mode... for the umpteenth time.
And there were those that were telling us that we only had to wait for the SCIR deal to be done for the dominoes to fall.... Ha!
Dear Crusty,
I think there's a good chance JK's pal Proscuitto will simply copy n paste your views for this week's missive of his !
Why the 'Hold' from you (which he for sure won't quote)..........
Semantics perhaps POC but, as you say "2P reserve is proven and possible, ie drilled and discovered." and yes so 2P has been "proven" ie drilled and discovered but without a GSA and pipeline it is not "possible". Until then the resource remains "contingent"....
"What is a contingent resource?
A contingent resource sits right in the middle between a prospective resource and a reserve.
A contingent resource is announced when a company has discovered recoverable oil or gas but needs to classify these as contingent because they are not able to be pulled out of the ground economically.
In essence the “contingent” name comes from the company being reliant on other developments before that oil and/or gas can be extracted economically.
Some examples include the following:
There is no pipeline infrastructure in this region and as a result the company thinks the resource cannot be extracted economically
There are environmental regulations in place that ban the extraction of oil and/or gas in that region"
So without a GSA in place it is not possible to calculate whether the gas can be extracted economically (though I don't doubt that it can) - indeed it is not possible to extract, full stop. Therefore the resource remains contingent methinks. Similar with the pipeline?
Agreed POC but we do not have 2P reserves. We have 2C resources and they cannot be monetised without the GSA and pipeline.
Anyway one and all have to head off now - I have a train to catch.
GLA
Yes POC, that is my point. Currently we have 2C resources only. WE may one day convert those into 2P reserves but until we have a GSA they will not be 2P reserves, that is my point - and they will only become reserves once we have a GSA and pipeline.
So without those things, whatever increase in the assessment of the assets in the ground may be, it will not impact the sp signiifcantly - it is the movement to 2P that will bring that change.
You can do reserve base lending against 2P reserves to finance projects. That's how bankable it is.
Crusty 2P reserves are bankable in the ground and has value. It's even more valuable out of the ground. But in the ground yes it is bankable. The nearer and easier it is to get it to market the more value in the ground it has. This is just standard industry knowledge.
It is not "bankable" without a route to market and at present we have none - and won't do until we gat a GSA and a pipeline. Nothing is "possible" until they are in place.
2C resource is contingent.
It goes 2C resource then 2P reserve. 2C reserve is contingent, ie contingent on further wells. 2P reserve is proven and possible, ie drilled and discovered. So we have three wells that have discovered and confirmed the 2P reserve. This is bankable. Obviously, surface facilities need to be constructed, but that's part and parcel of extracting the 2P reserve and you wouldn't be constructing these facilities without the 2C or 2P estimates.
Thanks PoC
Interesting.
The transfer of a 2C resource to a 2C reserves is dependant upon the probability and timeline of a route market and hence will only come if and when the items listed by Rojo are delivered.
The 3D will be calibrated to the wells NT1,2,3 which allows transfers of GIIP of 8TCF to upgraded 2C resource and 2P reserve estimates. How much volume get;s upgraded depends on Area km2, continuity of the sands, thickness, and energy in the reservoir, along with porosity and permeability. Also, further reservoirs may show up on 3D seismic as yet undefined. Then there is the deeper Jurassic.
Indeed Rojo - 2C versus 2P....
The increase in gas to 8TCF by ARA is due to thicker reservoirs and high energy channels sands equating to more gas in place. Basically it's loaded to the gunnels at high pressure.
10/10 for stating the blinding obvious.
What you mean is YOU don't think they will get a drill rig etc.
Only time will tell.
Absolutely ! - Thank-you Crusty.
Without a drill rig, pipeline, GSA etc etc this is going nowhere.
Couldn't resist, didn't think I'd get a chance at these levels again. Happy Christmas.
Moreover Al, even if there is a meaningful upgrade will it make a difference? After all, we already have 8+TCF and look at the sp! Another 50% increase in the resource and so what? 0.45p on the sp? Wow feckin' wee....
Winalot
I don't pretend any technical training or expertise. If I have learned anything it is from researching O&G shares and listening to more knowledegable posters on forums like this.
My understanding is that the estimates for the size of a resource are made up of a number of different sources of information interacting with each other. Primarily seismic and the drill bit. If you think about it, the drill bit alone cannot tell you what is around the drill bit in an extended area. You need seismic for that. And Seismic alone cannot tell you what the target area identified by seismic contains. You need to go into it with the drill bit for that.
From memory, there have also been "re-processing" efforts of old legacy 2D seismic. And every time they have looked again the resource has increased. Then add in the last drill in 2017 (think that date is right). There was not much change between the Feb and December 2018 CPR reports when the jurassic target is removed. Then what happened is Ara and their team came in. Fresh eyes on established data. And I have no difficulty in accepting that more expert eyes will think a different thing. I think I am right in saying Aminex never had it's own in house processing department, being a tiddler. Ara/Zubair are a Major company with teams looking at the evidence before deciding whether to invest.
It is their estimate, putting together all the drills (not just 2017) and all the old seismic and the re-processed seismic that has led them to 8TCF gross unrisked mean GIIP. While the 2C number has remained constant at 763 BCF, simply because there has not been a further CPR (I believe).
So the increases in the estimates do not of themselves tell me that someone is wrong. Only that they are estimates. And we know they are about to be replaced by 3D processing internal (Ara) work as well as the external CPR.
You pays yer money and you takes yer chance but for me Ara have always seemed like a straight talking and professional outfit. I don't see the upside to them inflating the numbers in May 2021. They don't have public shareholders to convince or banks to borrow from. Their number may be wrong but (so far) I am happy it is honestly arrived at.
Of course I am hoping they have been conservative with their 8.236 TCF estimate.
We will know soon.
That's the spirit Crusty
I do not expect to see any significant increase over the previous numbers.