Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Why would Parkmead and its three partners apply for an extension to Skerryvore iIf there was no intention to drill it .Current prices make it a certainty.
Plus the infrastructure is all there for tie in (pity about Edinburgh)
Parkmead aren't picking up the full tab for the appraisal drill so why would they look for someone to pay for there drill ?
The argument is Skerryvore has producing areas either side of it meaning the oil is migrating across it .
It depends if company B used the debt to buy an asset. That is really my point. Sitting on cash for 8 years is a great way to erode value.
I don’t think skerryvore will be drilled unless PMG can convince someone to pay for it.
The cash is waiting for a GPA partner and FID. Zero may well be fair value for that given the history of that field and the uncertain future.
I agree it’s pretty good value at the moment, but there are a lot of bargains out there at the moment!
Well, if company A and B both have market cap of 53 million and A has debt of 20 million and B has net cash of 20 million, clearly B is better off assuming everything else is equal.
No one is saying drilling is not risky because it is. You only need to look at ADV which drilled an appraisal well, and the bad results- didnt follow it too closely, but I think the find wasnt commercial rather than a duster. It tanked 90 percent. Then on the other hand, look at CHAR and it 3-4 bags on good results.
Best option is a farmout for GPA, reduces risk at cost of smaller WI, which is fair. Can't have it all. The global conditions, price of oil and risk to energy secuity, provides the perfect conditions for a successful farmout. I would say GPA is price at nil, so upside will be massive when and if it comes.
Also the risk to that cash if it is spent drilling a dry well…
Marine - OK fair enough…so essentially you are saying that everything but the cash is valued at £29m.
It’s up to people to decide if that is expensive for discounted cash flow from NL, renewables business, land, and all the speculative stuff.
We must also consider whether we trust the company to spend the cash wisely, and the erosion over time with inflation if it isn’t put to work.
....basically, it cheap as cheaps.
I'm using cash balance as at December 2021, so EV will actually be lower as it doesnt include profits since then.
EV = Market cap + net debt. In PMG's case, net debt is negative, i.e it is net cash.
EV is more useful than market cap in evaluating companies size, when it has large debt, or net cash.
Not sure how you have arrived at £29 million EV. It is significantly more than that.
The RNS rallied the Share price 25 percent on the day, sure it pulled back, but in the last few days sees the price approaching back up again. Clearly it generated interest.
The WI interest is what it is, whether its 2, 5 15, 50, 75 percent....... What matters is the income generated relative to market cap or better enterprise valuation. 100 percent WI in 0, is 0. For a small company, the revenues generated from that "small" WI is large relative to the size of the company. If PMG was a large cap, it would be peanuts, but who laughs at £12.5 million revenues, when the enterprise value of the PMG is currently only £29 million.
Not to mention GPA valued at nil atm.
Bob
I keep asking you how much has the turbine made this year....You keep going on about the gas as though we don't have any. Tom is letting the shareholders know it's our drilling campaign because that's what he wants to give is maximum shareholder value.
12.5 million not to be scoffed at is it !
Agree with your take on it Robs - the gross production figures really annoy me. Seems aimed at fooling naïve PIs.
My thoughts on the RNS FWIW...
This was a very unusual RNS for PMG. I cannot remember the last time they issued an 'trading update' RNS...if they ever have? Usually we get the financials twice a year and anything (rarely!) inbetween is news of a deal done. The fact they feel the need to issue an RNS with no real news suggests they either have some concerns over the shareprice and somebody taking a tilt at them, or as mentioned earlier, they want it up for a cash raise. I strongly doubt they have just hired someone new in teh marketing department!
Good for them to reinforce the high gas price and associated revenues, but it's hardly news.
Once again they highlight the benefits of the royalty buyout last year, but fail to mention that the royalty had been hidden from shareholders since they acquired the stakes and they had repeatedly stated that they had a 15% WI in those three fields....just omitting that they were only getting 7.5% of the revenue.
More smioke and mirrors once again using the gross production figures for the NL gas. 80%+ of PMG's gas comes from Diever, where they hold only 7.5%. The other three wells/fields are 15%, but don't contribute much. The last several months production has been les than 300 boepd net to PMG.
Accelerating the two new wells is good news, but again they don't make clear that they only have a 7.5% stake in them, so the headline gas in place figure will be massively reduced when it comes to PMG's net - assuming the wells are successful (Cos 40-50%).
And I do wsh they would would stop saying things like 'our drilling campaign' when they actually should be saying Vermillion's drilling campaign. PMG will have next to nothing, if anything, to do with it. More smoke and mirrors.
Anyway, interesting that they felt the need to issue an RNS about the fact they are making money...
Aye looks like Skerryvore have to be tied back to the Clyde
Platform or an FPSO....
Edinburgh dry
You with the wrong bank mate !
Banks will not fund an appraisal well either.
They might chip in some RBL for Perth but I think even that is unlikely in the current climate.
Skerryvore already have partners and the drill is not exploration it's an appraisal well
GPA was always going to be developed with farm ins and collaboration and its drill ready !
PMG has zero chance of securing Debt finance for a drill.
Even Perth is a high risk development and debt finance is very unlikely unless the project is derisked by farming out a large percentage.
It works the same way as Cross secured finance for Dana
Boris has even spoken out encouraging banks to lend to oil and gas companies !
It appears Parkmead have the best of both worlds.....
News can't be far away on Shells Edinburgh exploration well let's hope it's a giant which would give Skerryvore a increased chance for a tie in
Using loans to generate cash?
How does that work then SotB?
I have no issue with placing to fund development, but would much prefer a farm out to share the risk.
If we get a placing it's not to the keep the lights turned on, it's to get the jackpot..
Bing it on Tom...
The company is making money
That all that matters, the ducks are been lined up for GPA or Skerryvore
Cross specified he would be maximising share holder value by using loans to generate cash.
Certainly never used the word placing at the 2021 AGM
I for one would be very happy with a placing if it is a catalyst to major development.
I might have been a bit over zealous with my estimations for 2 land wells but as others have said, it’s not new news and I would be happy to bail once B/E after all this years!!