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Wet gas from Alen is produced via a fixed platform to the Aseng FPSO, where it is lifted periodically. Dry gas is sent via a new 24-inch 950 mmscf/d capacity export pipeline to the Alba LNG plant on Bioko Island. Since these facilities are available, with ullage, only around 10km away, production from EG-08 could potentially be tied back to the Alen platform, with a tariff being paid to Chevron for the use of the infrastructure. The LNG terminal on Bioko Island was recently upgraded, with the hope that new finds in the area can backfill supply as Alba, Aseng and Alen naturally decline.
Near term activity EG-08 is covered with modern 3D seismic which will allow Antler and Europa to rapidly work up drilling targets and start a formal farmout process in early 2024. It is clear that the regional productive reservoirs have a strong AVO anomaly response, and it is on this basis that all existing discoveries to date have been drilled. With the “A”, “B” and “C” prospects all displaying ‘classic type 2 anomalies’ (see Figure 2, above), the EG-08 partners are carrying high geological chances of success (in the region of 60-70%). The estimated volumetrics for the three prospects is summarised in Figure 3, below. These numbers are on the basis of a gas condensate find, which is considered the most likely phase, however we understand that an oil case is also being considered a possibility.
Licence EG-08 EG-08 was originally part of a larger permit, Blocks O&I, originally awarded to Noble Energy and later acquired by Chevron following its takeover in 2020. EG-08 was carved out as part of a mandatory relinquishment following the commercial development of the Alen and Aseng fields in the other half of the licence. Current operator Antler acquired the new PSC earlier this year, with state ratification in October. Antler has two years to secure funding and commit to drilling (i.e. farm down the licence), at which point it moves into the second exploration sub period which will see drilling activity. Antler has a 80% interest in the PSC with the state company GEPetrol having a 20% stake. The neighbouring Chevron licence contains two producing fields – Alen and Aseng – which contain around 700 bcfe of recoverable reserves and has produced just shy of 100,000 boepd (combined) at peak production but is now well into the decline phase. The Aseng field was discovered in 2007 and achieved first production in 2011. Alen followed shortly after, with production beginning in mid-2013. There are also the currently undeveloped discoveries Diega, Yoyo-Yolanda and Carla North, which have tested oil, gas and condensate. A total of 17 wells (exploration, appraisal and development) have been drilled in the area, the gas wells proving flow potential of over 30 mmscf/d gas and 1,500 boepd condensate, and oil wells over 6,000 bopd. Only one well was drilled into EG-08. The O2 well was drilled downdip of prospect “C” (see Figure 2, below), and while it was technically dry, it did prove a thick (55m) porous reservoir with some condensate recovered at the top of the section. This provides optimism for updip potential.
Europa Oil & Gas
MAKING MOVES
Europa Oil & Gas (EOG LN) has announced that it has secured a new investment in private E&P Antler Global, including an 80% operated stake in the low risk/high impact EG-08 exploration licence, offshore Equatorial Guinea. Europa has invested US$3m in new equity into Antler, securing a 42.9% stake in the company and providing funds to prepare the asset for farm out. The licence contains substantial lookalike structures to commercial developments, less than 10km away, with P50 prospective resources of 206 mmboe (gas condensate expected) across three prospects. Importantly, of the 17 wells that have been drilled in the immediate area, only one was found dry, illustrating the low regional geological risks – with the chance of success estimated by Europa at 60-70% for each individual prospect. With infrastructure nearby available for tiebacks, the economic threshold is relatively low (estimated at 38 mmboe). As such, the chance of an economic development from at least one prospect is as high as 91%. Applying substantial discounts to reflect the risks and dilutive effect of farming down the asset in return for drilling and development finance, we calculate a risked NPV10 of the EG assets of US$70m net to EOG, equivalent to 5.67p/shr. Illustrating the scale of the upside unrisked this rises above US$350m (28p/shr). Aside from the value implications, we see this move as a statement of intent from Europa, shrewdly deploying its cash at an opportunistic time, where equity finance for small projects is hard to find but the industry starting to show signs of renewed appetite for reserve replacement opportunities. We have updated our NAV table, calculating a sum of parts derived risked Core NAV of 3.76p/shr (discovered resources only) and a risked Total NAV 15.83p/shr. Our updated Target price of 4.97p/shr offers almost 5x upside from the current share price.
Term good luck
Market likes the news and it’s something that I’ve previously mentioned the company was crying out for, allowing a new change in direction than the previous assets.
There is no dilution required and creatively acquired using a Subscription payment plan, absolutely huge rewards at stake if they can land a quick partner to drill.
I’m a buyer here
Can anyone let me have these details ?
I know, part of me hopes they read this stuff and the like of oddie feel an iota of guilt at their poor performance. I know at heart they don’t give a f***.
We will know if the other directors, ie AS, BOC and SAR buy shares. They need to show support of their strategy.
G - lovely idea, but as he is no longer a Director we will never know!
Come on Oddie give a bit back as well by buying a few shares proving to the peasants at Christmas you believed in the mess you left behind . It won’t hurt you.
He last bought two months ago end of October, so probably more relevant to look at what he accumulates over the year if comparing to annual salary.
Will Holland's recent share purchase would have cost him about £8,665 before commission etc. While it's very welcome, i wonder what fairly minimal percent of his annual summary it comes to.
Well, we now see why the share price went up. I will be impressed when he buys 10 times that. Where are the rest of the director's buys
Interesting holding
Uropa Oil and Gas
@Europaoilandgas
·
1h
This adds a new geography to #EOG’s existing asset portfolio, and one which the Board believes has enormous near-term, infrastructure-led, near-field exploration potential.
🔗Full announcement: https://londonstockexchange.com/news-article/EOG/acquisition-of-interest-in-eg-08-licence/16261470
#equatorialguinea #westafrica #energy #africa #exploration
maybe they find some oompa loompas and steal their chocolates, who knows.
Well he gave a commitment that he would buy when he could in a recent interview and I guess he's out of a closed period now that the deal is announced.
Will holland buying... To quote Tommy Cooper " JUST LIKE THAT ' More to follow
"it has acquired a 42.9% equity interest in Antler Global Limited ("Antler") via a US$3 million cash subscription for new ordinary shares in Antler"
I suspect EOG has acquired 429k new shares, which means it actually owns exactly 30% of the 1.429m shares now in issue valuing AG at $10m - if I'm right, it's odd that it wasn't mentioned in the RNS
And look where the share price is now, it is the sentiment that they will be reducing the number of shares and yes they need to buy shares all of the BOD. WA bought 150,000 pounds worth, that is a chunk but didn't have any lasting effects. The BOD need to step up to the plate and buy at least that many between them. If they believe in this project they will.
I’m not convinced that share buybacks really work for companies like this (they haven’t with UJO). But I would love them all - including the new non-exec - to start buying more shares themselves. Look what happened when WA bought a decent chunk last April. The SP was at 1.6 in no time - so I don’t think number of shares is a real hurdle if there is significant buying going on.
Serif and Bobbybee,
The problem they have is the number of shares issued at a low price. Everytime the share price goes up you will have sellers making 10% return at 1.3 p. They really should instigate a share but back program and drop their salaries so shareholders see they care about them and not just themselves. It is an uphill struggle with a billion shares many bought at low price
Heidi. Not following can you expand, who are our new friends?
Well if newsflow drives SP January will be a busy month. EG presentation on 3rd - Inishkea licence technical ends on 31st. In between we should have update on improved Wressle flowrates, the Wressle CPR, submission of Pstones planning application and an update on Cloughton drilling location and next steps there.
If ive read it right, one of our new friends over there might be able to help it along where otheres will struggle