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Hi Tren,
As Gruyere said, Capricorn have no input or involvement in Sangomar at all, there just crossing there fingers & hoping for the best. All or nothing rests on that 30th June date (& if that's achieved then they need $55+ average for Brent for 6 month's for $25M or over $60 for $50M.
If they'd structure the deal similar to the Waldorf one in the north sea regarding contingent payments they would be in a far better position than they are. They've lost out on a massive sum of money. FAR were far smarter with there deal with Woodside, its production based (similar to the Waldorf one) & it looks like they'll get all or the vast majority of there contingent payments over the next 3 years.
GLA
LOTM
Don't think so. Their update on Sangomar specifies what first oil achieved is.
Has Capricorn any involvement with meeting the 30th June deadline other than crossing their fingers?
Have been away for a while. Can someone summarize why the stock is in down so much? Damn, I thought the new BOD had the ship steady?????
Hi GrumpusLOL,
At least you saved some money compared to today's close, that was an awful auction for anyone still in the stock.
Hopefully the buy-back picked up at least 50,000 shares for the day with an average price of say £1.13
The 2 lots shorting the shares are sure raking in the £'s at the moment, the share price decline seems to have accelerated of late - no doubt in part because of them.
Market cap is down to virtually £100M now (a touch over £103 as it stands) who would have thought it.
So tempting to start picking up a few shares now at this price, but where is the sign of a bottom ? is £1 or less achievable/realistic ......
GLA
LOTM
Hi Johnnytaffia,
Yes I'm still watching it. It's getting to the point where I might dip my toe back in.
In all honesty thou, its really hard to do so when there is absolutely no visibility whatsoever on Egypt & what's going on there & knowing just how bad things really are.
A year ago the new board promised shareholders that they would be kept fully informed & the exact opposite has been true since late October & the cancellation of the Egypt update due for 30th November. 3 month's later & no sign whatsoever of when it will take place (if at all).
The buy-back is getting some really cheap shares at the moment (well relative to the price before ie £1.80) because of that information vacuum. Only time will tell if its a bargain price or not.
Good Luck All
LOTM
Me, too Grumpus. Out after 20 years but just can't help being nosey and watching how this company is being destroyed. Got out quite some time ago last summer soon after the last divi payment. Juts can't help being ghoulish and checking the spiralling SP.
I’ve made a petition – will you sign it? I need 5 people to sign the link to make it live
Click this link to sign the petition:
https://petition.parliament.uk/petitions/657294/sponsors/new?token=EMIgM07k9Zj3akpbgXJc
My petition:
Make short selling shares illegal in the UK, like Germany and others.
Short selling of stocks in the UK causes instability in companies share prices. In many cases £millions can be wiped off the value of a company by coordinated groups of short sellers spreading misinformation and rumours, causing investors to panic and sell their stock.
How on earth can some other company loan out something you own without your consent and the company or person who has borrowed it use it to influence the market in the opposite direction with the massive percentages of shares they are able to borrow and not own outright? Its fraudulent and corrupt, legal theft authorised by the government and needs to be banned and stopped.
Click this link to sign the petition:
https://petition.parliament.uk/petitions/657294/sponsors/new?token=EMIgM07k9Zj3akpbgXJc
FPSO has now arrived at the Sangomar field.
So they will be able to start the process of anchoring it & then connecting all the cables & pipes etc to it.
Woodside's next report might be interesting for timelines, the end of April one certainly will be!
LOTM
It seems you are the last small investor left on this BB.
I fear the masterclass in how to make a billion dollars disappear is now complete and there is no hope left,
I'm out after more than a decade.
C Ya.
I was thinking about the pre-close update over the weekend & actually its quite scary when you put 2 & 2 together.
You go back to the half year report from 14th September (which is just over 4 months ago) & back then they were forecasting production for the year at the bottom end of there previous range of 32-36,000 boepd exiting 2023 at over 34,000. Now this new guidance was a mark down of expectations.
Yet in the pre-close announcement, production came in at just 30,222 boepd for 2023 (roughly 2,000 boepd below the forecast in just 3 months timewise).
Further more the "Teen and Badr El Din (BED) LLP projects are now complete and beginning to ramp up" ( they were part of the reason they were forecasting the 34,000 exit rate that we ended up over 10% below)
Now even with those projects factored (and not reached peak production yet) in Capricorn are indicating that production for 2024 is likely to decline by 20 - 30%.
That's 20-30% on 30,222 boepd not the original range they expected but missed considerably & its also after taking into account "flush" production from the recently added wells.
Pretty scary stuff when you think about the company's future & how quickly production might fall in 2025 also & how they turn things around on the development side.
As I said not getting that November Presentation really does mean Shareholders are in the dark & not in a good way.
They have a lot of explaining to do.
LOTM
FPSO started moving again about 07:00 GMT today Sunday 28/01 & is heading towards Senegal.
LOTM
After reflecting overnight on the update, the biggest thing that is missing is an actual update on what was achieved in Egypt in 2023.
The postponement of the Egypt presentation at the end of November is in reality a major blow to investors, because we have no idea of what was achieved for the roughly $93M of Capex spent in Egypt in 2023.
There has been no drilling updates or detailed reports giving the licence name, the well, what was found, if so the flow test results & if its on production yet or not & one of the most important parts new reserve numbers
Yes there has been some snippets given to us, but not a real in depth insight into it all. Without that investors have no real idea if the money has been well spent or not.
From what I've read, it doesn't look like we've found that much in the way of new reserves. The more wildcat drilling side of things seems to have just turned up dry holes even with 3D seismic.
The only successes seem to have been step out wells from existing producing wells.
The long & short of it is this, if we don't have a baseline telling us what we have then its impossible to tell if we're actually making progress or not. Or if we are simply sending good money after bad & would be better off just producing what we've got (other than in-fill locations) & taking the money & running rather than spending it on Capex where we're losing it & getting no real return on it.
LOTM
Looking at the actual numbers,
Amount outstanding from Egypt $173M compared to $170M end Oct with $139M overdue at that point.
$190M in cash & loan debt of $114M compared to $158M with loan debt of $113M in Oct. So that's a gain of $32M in cash but when you take into account the Waldorf payment of $48M it means a spend of $16M in just 2 months ! plus another $1M loan increase. The buy-back would account for roughly $2M of that $17M spend.
Also Capex is meant to be around $120M which is in the bottom half of the $117M - $127M range from October (there wasn't a published Capex spend number to the end of October).
Not as rosy a picture as you might think.
LOTM
Hi Tenapenny,
If you add in the $28.5M that's to come from Waldorf over the next year & then payout the $37M still due to Shell over the same time period, You'll still come to roughly the same number.
Problem is Egypt lost money last year & still isn't break-even. There talking of possible production declines as high as 25% which certainly isn't good.
Its just as well they've cut G&A by $50M a year to just $20M now, but that is still going to eat into the cash pile, as is the Reserve based loan that needs to be paid off & if reserves are dropping the payments will jump considerably. Yes they have the cash set-aside to cover the capital costs, but you get into an ever decreasing circle.
As for payments from Egypt that outstanding number has grown considerably each quarter, this quarter's will see less growth only because production & thus revenue dropped a lot in Q4.
There are a lot of moving parts to the equation.
The fact there is still no new date for the investor update on Egypt isn't exactly a good sign.
Good luck
LOTM
Current MCAP at 140p is around £130M.
If the amount currently owed by Egypt is $170M that is also around £130M. So if they pay the everything else is priced at zero. How long can Egypt not pay?
Hmm not the best of updates from Capricorn.
They are clearly trying to delay so many things to buy themselves time for hopefully the government to finally start paying off the massive arrears.
They deliberately didn't say how much of the $173M is overdue.
Looks like there trying not to pay-off the debt as quickly as would otherwise be the case, or the next payment & interest didn't arise until 1st Jan 2024.
As for the FPSO well it hasn't moved in 5 days now !
So either there is a problem with the vessel or they were ahead of schedule & are just passing time, not Capricorn's cost but the tugs with it will be costing a pretty penny every day to hire. So I'd have thought they would have wanted to get the journey done ASAP.
GLA
LOTM
Many thanks LOTM
Hi Tren,
There isn't an incentive in any normal form.
However they have a massive amount of money tied-up in the project including the development wells that its currently drilling etc. It will have PSV's signed up to ferry supplies to the vessel etc & so will be paying for those whether it starts on time or not !
So in that regard it really is in there interest to get it up & running as quickly as it can to start paying back all those billions of capital investment in the project.
Its worth noting the following ..........
There could be a problem with the FPSO.
I wondered why it was hugging the coast after passing Cape Town & not going with the normal traffic flow up towards Senegal, (which it would have reached in just 1 week if it had carried on)
Its at Walvis Bay Anch Namibia !
Maybe its sheltering from a storm or problems with one of the tugs or its engine etc but it would appear to be an unexpected stop on the journey.
Hopefully it gets moving again soon as each passing day is vital for qualifying for that $25M or 50M payment or not at all.
GLA
LOTM
PS its still there 2 days later
LOTM
What incentive does Woodside have to get Sangomar up and running before the deadline.
Regards
Apparently the Egyptians have not been paying promptly for their gas. Well color me surprised! Investing in Egypt was an obvious risk. Is it fair to assume someone was bribed into recommending it?
Capricorn got a massive downgrade yesterday, very surprised the share price didn't react more.
Jefferies cuts Capricorn Energy to 'hold' (buy) - price target 160 (225) pence
GLA
LOTM
Hi Gruyere,
Mommur is quite right, this is from the Serica half year report
"Columbus had good initial test rates and started production in November 2021. Flow
rates then declined during the first few months of production and average Columbus
production in 2022 was around 3,800 boe/d gross.
During the first half of 2023, Columbus production has been steady despite some shortterm Shearwater offtake facility outages.
Average net Columbus production of gas and condensate in 1H 2023 for Serica’s
combined 75% interest was 2,300 boe/d (1H 2022: 1,970 boe/d for a 50% interest).
Average net production for the Group’s combined 75% interest in the post-acquisition
period from 23 March to 30 June 2023 was 2,250 boe/d.
The latest independent report of reserves, compiled by RISC Advisory, estimated 2P
reserves of 1.1 million boe net to Serica’s 50% equity interest as at 1 January 2023
(2022: 4.9 million boe) after allowing for production of 0.6 million boe during 2022. An
additional 25% field equity interest was acquired as part of the Tailwind transaction in
March 2023."
In other words its turned out to be a bit of a dud performing much worse than expected & thus its had its reserves revised downwards substantially (like 66% downwards).
600 boepd isn't really going to do much for Capricorn.
GLA
LOTM
"peak production and with a field life of many years"
You maybe want to read Serica's Annual Financial Results which defines Columbus oip and life of field - you may want to amend !
On balance I think its a good deal, not least because 25% of Colombus comes just as its forcast to reach peak production and with a field life of many years. It is a bit of a volt-face as they were intent on exiting everywhere but Egypt including the North Sea. However this is not exploration but firm established production. How the peroceeds get used is another matter.