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The Kiliwani Gas price was also lower.
They are not wrong, but they are valuing it as things stand today, there's still officially no development licence inplace so they can't value things as if it was. Though we know things are going to change soon enough.
Email,
This is what I posted yesterday. On reviewing the revenue potential for 40+ MMscfd from NT-1 + NT-2, and up to potentially 80MMscfd from CH+1, totalling a potential max of 120MMscfd, then I'd say the below appears very conservative now. And this is before the contents of the 3 untested traps above Ntorya are known, which could be more Gas, or even Oil.
4.21bn shares in issue
10p would be a MCap of £421m
5p would be a MCap of £210.5m
My thinking on post CH-1 drill success was around £250m too. I don't think it should be lower, but I'm also not sure it will go higher in this market. If the market recovers by year end, which is now looking possible as the UK has escaped the mini recession last month, then could be £350m or more by the time the gas is flowing.
Kiliwani was earning $1m per month - at the time of the £250m MC no-one knew it was about to run "dry". The results of NT2 weren't even known!
As for Kiliwani producing what NT-1 plus NT-2 produce, that's a load of rubbish.
NT-1 + NT-2 = 37MMdcfd before any work over
KN-1 in 2016 only produced 15MMscfd
Please state FACTS not FICTION.
I don’t see why, if Shard are saying 2.5p max valuation, we have people on here with massively less experience, no qualifications, quoting way above this and ignoring the professional valuation. I would love 5p, 10p like anyone invested but why are we ignoring them and saying they are wrong?!
Stockcheck
""Except that at the time, Kiliwani gave AEX a Market Cap of £250m, today it's only £64m so justifies upside of at least 290%"""
so you are saying AEX should at least reach a 250m cap?
Indeed blackgold, and in the company stockbroker’s view, even a confirmed 2tcf may warrant a share price 4 to 6 times the value that it was at the time of the report (noted in report as 1.03p) - 4 times more for the same production rates as base case. 6 times more if the increased resources enabled higher production.
That was based on 2tcf!
So what SC, we had exactly the same prospects from NT1 and NT2 (and NT3) in 2016 as we have today AND $12m per year from Kiliwani - the assets haven't changed! We could and would have reworked them then in just the same way as we are planning to do today. The "prospects" for those wells and NT3 were the same then as they are today BUT then we held 75% of the assets.
Anyway, I am off for the train.
Bye for now.
Cancel this bit, the gas is equivalent to it, they didn't produce this on top!
"NT-2 also produced 2,833 barrels of condensate per day whilst constricted."
Cancel this bit, the gas is equivalent to it, they didn't produce this on top!
"NT-2 also produced 2,833 barrels of condensate per day whilst constricted."
On top of which, NT-1 only tested the upper 3.5m of a 25m interval, and NT-2 was tested with constricted gas flow due to mud influx.
NT-2 also produced 2,833 barrels of condensate per day whilst constricted.
On top of which, NT-1 only tested the upper 3.5m of a 25m interval, and NT-2 was tested with constricted gas flow due to mud influx.
NT-2 also produced 2,833 barrels of condensate per day whilst constricted.
Crusty, there is the sandstone encountered by NT-1 and nt-2 and they now define it as the high confidence zone, of which they attribute 3.45 TCF of giip, but then they go on to say, "Furthermore, the new 3D seismic images a possibly even larger area of gas charged reservoir sandstones, beyond the high confidence area established by the new seismic inversion modelling."
"The interpretation of the 3D seismic has been completed by the Ruvuma PSA operator, ARA Petroleum Tanzania (APT). Seismic inversion geomodelling, undertaken in collaboration with Ikon Geoscience, has defined a high confidence area with a revised in-place volumetric estimate for the Ntorya gas discovery. A most-likely (approximating to P50) estimate of 3.45 trillion cubic feet (Tcf) of Gas Initially In Place (GIIP) is now believed to be potentially connected to the reservoir sandstones encountered in the Ntorya-1 (NT-1) and Ntorya-2 (NT-2) discovery wells. This revised Ntorya volume represents a substantial increase to the published P50 GIIP of 1.64 Tcf estimated by RPS Energy (RPS) in their February 2018 Competent Person's Report (CPR)."
"Furthermore, the new 3D seismic images a possibly even larger area of gas charged reservoir sandstones, beyond the high confidence area established by the new seismic inversion modelling. This provides for potential additional prospective gas volumes associated with the Cretaceous age sand units tested in NT-1 and NT-2 (Units 1 and 2) and for the possible existence of an as yet undrilled shallower sand unit (Unit 3), to be tested by the forthcoming Chikumbi-1 (CH-1) appraisal well later in the year. An upside aggregated GIIP volume for the Ntorya accumulation based on a success case in multiple stacked sands at CH-1, is estimated by APT to be up to 7.95 Tcf (approximated to a mean unrisked P10 GIIP)."
Yes SC I would not disagree BUT that is the rationale behind my post Drill prediction of £250m MC. We are simply back where we were 8 years ago. Unlike you and others I am not making any assumptions about any significant upgrade in GIPP and absolutely NOT Oil, for reasons explained umpteen times in the past. Moreover even if there is an upgrade in GIPP it will not significantly affect the immediate share price as most of any upgrade will not be appraised, realised or, most importantly, monetised for years...
Anyway gents I am off tocatch a train now on my way to Bath for the day. May check in later - keep the pot boiling chaps!
Oh, Rojo! “Watch the SP is my advice” are your own words from a post on 24th of April, when the share price was at 1.125.
So, it is your own advice that you are so sharply dismissing and that you don’t want!!!! 😂
The share price has risen nearly 40% since you said them, so I can see why those words now offend your sensibilities!
Particularly as you subsequently said:
At 1.125, referring to the CPR “Without it, I don't see the SP going anywhere”.
At 1.15p “Well perky, if you're right and the licence is a done deal, it has had virtually no effect on the SP”
At 1.15p “No surprise if the SP slips back...”
At 1.35p “Not looking great is it ? You think we'll be back to 1p in a couple of weeks joyo?”
Oh dear! 😂
You sound very agitated again by the way.
I think we’ll be just fine. As posted yesterday:
There will be plenty of profit according to the company stockbrokers:
"Therefore, as a point of reference, we note two potential value points that we believe the market may consider when deciding how much value to recognise should the 2Tcf be confirmed:
1) Extending the plateau of 140mmscf/s for 20 years, would result in an increased average annual FCF of c$25mm/year, and an approximated asset value of £175mm (~4x the current market cap), using a simplified 12% discount on FCF in perpetuity model. We note that in this case only 1Tcf of resources will be utilised in the 20-year period.
2) Theoretically, increasing the plateau to 250mmscf/s for 20 years would effectively exploit almost all of the 2Tcf of gas in this 20-year period. This hypothetical case, in our estimate, would generate an average annual FCF of about $40mm, representing an approximated asset value of ~£275mm net to AEX (~6x the current market cap)"
So, Free Cash Flow for Aminex of somewhere between $25m and $40m if the 3D seismic results were 2tcf. Obviously, they were very much higher than that.
Crusty have you got your misery head on this morning?
At times you make it sound like the eggs haven't even been laid 🤣
Suit yourself Ufufuo. I, on the other hand, prefer not to "count my chickens before they have hatched".
Plus potential from 3 shallower untested traps above Ntorya that could contain more Gas, or even Oil.
Except that at the time, Kiliwani gave AEX a Market Cap of £250m, today it's only £64m so justifies upside of at least 290%, plus the upside of CH-1 potentially being a producer at up to 80MMscfd on top.
Interesting to note that an annual income of circa $12.75m from the combined NT1, NT2 and CH1 wells would only roughly replace the income being generated from Kiliwani in 2016 at the time of the anticipated "back-to-back" drilling of NT2 and, then NT3 (now CH1) and at a time when AEX was the operator and owner of 75% of the license and hence the proceeds of those up and coming drills. At that time the Market Cap topped £250m.
At first glance it is difficult to see how AEX shareholders are in any better position today, 8 years later, than we were back in 2016. Not until and unless we can reinvigorate Kiliwani and, or look forward to subsequent drills of the Ntorya basin; only then will the "commercials" improve upon what we have already seen in the past.
So many times, fellow posters have doubted my view, RoJo does not want our investment to succeed, but rather see it fail. His recent posts surely prove he has some sort of a grudge. and has no other ambition but to see our investment fail.
Crusty, I love you but you are a stubborn mule! 😂. They say it’s a multi TCF asset. A world class giant. CH1 will be a very big step in proving that potential up. I’ll leave it there as I’m not going to endlessly debate the same point with you. Uf ❤️
Ufufuo yes they do say " “based on a success case in multiple stacked sands at CH-1”. This looks like an "exploration play" of the "stacked sands" akin to the that of the deeper Jurassic targets in the original CH1 drill plan. It was those deeper targets that caused CH1 to be considered an exploration well rather than an appraisal well.
The "multiple stacked sands" that they are exploring may prove to be a "dud", or may prove that there is the prospect of a shallower sand trap across the Ntorya basin. The CH1 drill will simply test and, hopefully, prove the viability of that sand play, it will not and can not comprehensively appraise it.