Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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Didnt realise Selene was being classed almost as an appraisal well. Shell have COS as higher than 70%. Incredible!!
Dana farm in deal when the approval rns lands this will be 60p minium I guess
Excellent interview, thanks OP
Also, don't forget that this farmout is not just Deltic centric.
Dana has come in as a new major partner, buying in to the previous agreement & obviously with the full agreement of Shell. If successful, this will open & expand the possibilities of future partnerships.
Also, with the Selene project etc, Shell will have kept a "Risks Log" with any key changes likely going up to main board level. Several of the risks will have related to Deltic financing their side of the agreement, and no doubt the mitigating action necessary if Deltic say went into liquidation, or was say taken over, along with the achievement of progressive milestones.
These risks will have changed considerably with the Selene deal - even those flashing red (red, amber, green) will have likely changed status, and will be much less likely to become issues. Risks tend to become issues when they bite you hard on the a..se!
The Selene deal is a massive boost to how Deltic is seen as a prospective Partner & itsoverall status in the exploration arena.
Status after Selene farm down (this is obviously a 2 step process now):
(all in pence)
boom.boom 35/15 (20 if partial)
Glide 40/5
InsideLeft 104/6
SouthEast18 60/18
No.2 105/12
Butcher-boy 120/19
Titmnttm 90/12
MarineConsult 55/10
Purdey1 80/15
Dr Patience 71/13
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The simple question was: what happens, on close, to the Delt share price on the day of a confirmed funding deal (the expected outcome) or a message saying funding attempts through monetisation/ farm down have failed (ie placing process must be initiated)? Prize: the honour and glory!😀
No more entries obviously...
GGG, probably depends on the deal to an extent, but what you are saying makes perfect sense. I have actually been advocating for some time that fundraises would have been better for both assets, but if you see the widespread fear and the associated depressed share price, mainly because of that possibility, then it is also obvious why the CEO is pursuing the strategy of monetisation/farm down.
In any case, Pensacola is already far more derisked (as also kindly highlighted by SE18, JD and getafgrip) so a decent deal ought be very feasible. It could come within a few days up to max. 3 months from now, I think
If not a good deal, GS should just walk away and do a fund raise.
Selene f/o is smart. Good deal by the looks of things. Even smarter would be to raise £10m for drilling Penascola. This is a discovery and they shouldn't give away any more of it for a relatively small outlay on an appraisal well. Expecting a raise to come once the sp has kicked up a touch more. GLA
I also agree on this. Selene isn't yet a discovery so potentially more of a risk compared to Pensacola, so any deal for Selene would have to be pretty generous to the other party to persuade them to take the risk, plus funding for Selene is a touch more urgent than for Pensacola. So when it comes to an actual Discovery like Pensacola, I would expect Deltic should be able to strike an even better deal
Exactly right Jack - Selene is almost a future sacrificial lamb - it gives Deltic 2 x big partners & shows the ballpark negotiating figures, this really pressurises a better deal faster for Pensacola, and several interested investing parties in the Southern North Sea have already missed out on the Selene deal, so they might come up with a better deal.
I think Delt have played a blinder in releasing today's news on the Selene prospect, attracting an established operator like Dana.
Remember they still have the Pensacola Discovery in their back pocket, and any news on this potential farm down would logically be on much better terms.
Jack
It will drop back down though
as news is a long way off re drilling
SB - Deltic Energy retains a 25% non-operational stake in Selene. As it stands, at no further cost to them, and if nothing else changes Deltic is destined to be a producer of 25% of the oil from Selene, albeit non-operationally - Deltic has a choice whether it becomes a producer or not.
I’m just waiting for BCE and PRD to drop good RNS’s and then I’d very much like to increase my holdings here substantially.
Personally I think it’s a great long term hold and could very well.
Starbright, you are spot on, GS a smooth operator!!
Yes, that's also my interpretation, but as things are further derisked, loans will start being an option (especially with two solid partners) or simply sell or farm down at a higher valuation.
@Chambery - yes, I think so. But it's somewhat irrelevant as DELT is never going to be a producer itself. It just has to advance its prospects far enough along the value curve to realise a profitable exit. This point will come long before production prep costs materialise.
*results in Deltic retaining a 25% non-operated interest in Licence P2437 and having no exposure to 2024 drilling and testing costs up to a cap in excess of current success case well cost estimates provided by the Operator."
Does this mean that Deltic pays its future 25% costs to take it to a production well?
So....
Rig contracts for both prospects announced on Monday. A farm-out for one of the two announced today.
I can't help but wonder if this is all part of a wider negotiation with Shell. And that GS has just played one of his cards, proving that he and DELT can get deals done. To some extent the shape of the deal (specifically the absence of up-front cash) confirms that DELT has enough cash in the kitty to see it through to drilling results.
I don't think we'll have long to wait for an announcement on Pensacola. Perhaps on similar terms now that some price discovery has taken place.
The announcements this week represent a significant de-risking in my view. They address directly some of the questions about short-term funding, operational timetables and dealmaking ability. It's easy to see how far a re-rate could take this if drilling/geological risk becomes the principal concern.
I am happy to hold and watch.
With Selene virtually all costs are covered whilst Deltic Energy retains a 25% non-operational stake. Even a sizeable $500,000 cash upfront payment. Nothing short of brilliant!
You can see how share consolidation also serves to temper expectations, as a 2p share price would have some screaming 4-5p, easily.
Another leg up to 40p from here is 'only' another half penny in old money.
Not knocking it, just saying.
40p is 2p before the share consolidation...still outrageously cheap (even vs the last low ball fundraise) given we are in a much much stronger position now!
Great deal for Deltic. Should see a steady increase in the sp to at least 40p on the back of this excellent news. Lots more to come from Deltic this year also! A good share to hold with a solid partner in Shell.
I am sort of pleased with the deal, but doesn't it value the farm out at around £20 million for the 25% but Deltics cost of £10 Million is covered 4 pieces of the pie and we have a quarter and its cost us nothing, one way to look at it and Dana has the same for £20 million, hopefully we get a great result, i think the value is in Pensacola hopefully the smaller % player One Dyas makes a great offer. This is going to be a bumpy but fantastic year good luck. Rot.