Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
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I'll be interested to see the trading update in the New Year. It is likely to be the most relevant one for some years, given that the usual uncontrollable factors (such as oil price volatility) have had much less impact in the last half-year than some recent periods.
I'll be particularly interested in any pre-results steer on the planned dividend quantum and the 125 plans.
No steer, of course, on dividend quantum - beyond the minimum of 10% of operating cashflow. I’ve leave an accountant to guess what that might be, but I’m guessing 1.5p per share.
Intriguing comments on 125, which imply to me that the deepwater prospect size is substantial and may not have been covered fully by the grid of the 3D seismic. More on that in March no doubt.
It would be nice if Egypt could settle a chunk of dollar debt in H1.
Steady away as always. At least this time next year maybe close to debt free.
Re 125 the statement concludes:
“the opportunity which we have in our Exploration Block in Vietnam is unique and significant effort will be spent this year in concluding the analysis, planning the well and bringing in the right partner.”
My question is: how many billion barrels of prospective resources does it take to have a “unique” opportunity?
As at the date of the interims, Lead A was looking to be about 400 square kilometres with 2-3 strata of interest at various points within that. That would potentially be a bigger field in terms of area than Bach Ho. And we’ve seen TGT wells producing net pay of 30 to 120 metre thickness.
Intriguing - and probably worth the wait to get the right group of partners together…..
If memory serves - Ed described 125 as potentially 'a company maker'
mind you he also bought Egypt!
as you say - probably worth the wait - especially with buybacks and dividends to support value in interim
Fair point.
I always thought Ed was persuaded rather than an evangelist for Egypt, but they needed a deal at that point, having binned their Kuwait discussions. I thought Egypt OK too, but was looking mainly at the explo upside and the apparent existence of a higher bid.
But 125 has been the main reason I stayed in. I think there is proper company-making potential.
https://www.upstreamonline.com/exploration/vietnam-operator-on-the-hunt-for-drillship-for-big-exploration-target/2-1-1387318
Just on the points I raised after the RNS, it is worth going back to eg the October 2019 presentation in the context of Lead A on 125:
* Sediment thickness up to 8km in the main basin depocenter
• By analogy with the Cuu Long Basin, the Phu Khanh Basin has the potential for Billion Barrel Hydrocarbon Fields
……so if the thickest sediment is under the massive structure of Lead A, how much oil could that hold? My guess is about 2.5bn bbls. Of course, that is all it is: a guess. But when the data is published later this year, and the farm-in partner announced (summer?), we should get a very much better idea.
Note that they are very clearly “not saying anything” at this point……just continuing to buy back stock….
I’d say today’s presentation largely confirms this. I’d guess that 125 may soon have prospects totalling c.5bn bbl of potential prospective resources.
Note that the licence extension sounds likely to come over the summer, and a farm-in partner may well be confirmed at the same time? Should trigger something of a rerating when that happens (though probably unlikely to happen before then?)
Hi EE. I think you're probably way more up to speed on PHAR than I am and trying to reacquaint myself. I see pretty much the same assets as old SIA. Is there a farm-out process in place as far as you know for Blk 125 or still reinterpreting the 3D ? Just trying to get an idea of possible time lines.
Yes there is. Preferred partner.
Decks now cleared....
Last year July’s Trading and Ops update was on 20th July…..
….and we’ve been told “ In addition, an independent assessment by ERCE for Block 125 has commenced, evaluating prospect sizes with encouraging initial results. We look forward to update the market at the July Trading & Operations Update”
And only 5 weeks ago we had news of the licence extension on 125.
Not impossible that we get news tomorrow of a substantial prospective (multi-billion gross) resources update AND a farm-in agreement for drilling next year.
At the minimum, we should get a resources update by the end of next week.
Also worth noting that an updated and rather interesting Corporate Presentation was slid out on 27th June. We’ll soon see what numbers can be attached to the pretty 125/6 pictures - and perhaps learn who is the drilling partner.
BLIMEY:
“ An independent assessment by ERCE for Block 125 confirms a range of gross unrisked prospective oil resources of between 1,178 MMstb (1U) and 29,785 MMstb (3U) with a Mean value of 13,328 MMstb for the Prospects in the North West area of Block 125 currently covered fully or partially by 3D seismic. These resources do not include Leads already identified in Blocks 125 & 126 but not yet covered by 3D seismic”
Obviously OIP numbers need a big discount and risking, but those are some pretty impressive mean/3P numbers……especially as they only cover the area over which 3D has already been shot!
….typo….3U not 3P…..but the point holds.