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Cluelesstim - are you 90% derisked yet?
Seems a very peculiar time to do so considering the strength of the share recently.
Perhaps you're really looking to increase and attempting to create doubt amongst others?
Good luck with that.
My ISA shuffle cost me 0.3%, so I’m inclined to think something else was occurring.
@tim I think it does matter. Given a fixed ammount of capital to invest,
At 10p I get x number of shares.
At 20p I get x/2 number of shares.
At 30p I get x/3 number of shares.
So if I bought at 10p I get a 3 x larger dividend than if I'd bought at 30p.
Like Rob said the sector has been on an uptrend. Imo go with the flow. It's not solely down to isa reshuffling as that applies to all stocks.
Last weeks rise was certainly not down to isa "reshuffling".
It may of helped, certainly not to the tune of 35%.
Obviously TW and Zak had a part to play with there valuations.
Their is a huge amount of interest in oil/gas plays at the moment, 88e, ukog, echo, matd have all seen good rises.
Cheers all for your views.
mossma/muckle - I was under the same impression that Trin CO2 EOR project can be valued based on oil bopd revenues. But rereading RNS of 20th Jan. 2021 PRD seems to have clarified that valuation for Trin CO2 EOR segment is on a wide range of metrics rather than standard potential revs/cash flow/EBITDA etc.?!
RNS states "The successful development of the CO2 EOR business in Trinidad allows the business to be valued on the basis of its assets, invested project costs, existing contracts, goodwill and CO2 EOR operational experience. " This might make sense as i think PG suggested in a recent interview to not focus much on bopd production? So that made me reconsider my EBITDA estimated value that I had assigned to Co2 EOR segment, and hence my margin of safety at the back of the business segment reduced. So am not sure what sort of dividend return to estimate at the back of CO2 EOR monetisation, if its not based on mainly oil bopd revenues, but service model?
Cheers Sefton. PRD has great potential, we all know that but point was that market expectation seem to say that PRD is a derisked play, as we compared PRD with TXP. But when I looked back at TXPs production, sp & its mcap pre drill and post drill results in 2020, we seem to have outperformed TXP in terms of mcap, before we've drilled our first well. Our mcap is also higher than SDX & INFA, closest peers I can think of, which goes to show the confidence the market has in PG & team. But given that 60% CoS is management estimate and not 3rd party SLR CPR number, & that my margin of safety Trin segment value estimation based on oil revenues was potentially flawed, and my fair value pre spud has reached, I came to the conclusion to book profit mostly pre drill (don't want exposure to exploration risk as imo market has derisked it without us even drilling). So might be out for a while until assessment of drill results & testing for commerciality has been concluded at Morrocco.
We all know the potential size of prize but have personally realised that, as Sefton refers to psychology, that we tend to think of markets in a linear way which might not be right, to say the least - i.e. draw a straight line from 10p to £1, etc. Inertia/FOMO has cost me previously(who remembers COVID in Jan/early Feb2020?) so might take my rough pre spud fair value target and pay up more and get back in PRD post successful drill/test results. Want PRD to drill and test successfully the commerciality because the size of prize from that point onwards might be massive and so can increase exposure to PRD a lot more than currently.
Zebra - My guess of last weeks c.30% jump was due to ISA reshuffling and MMsgetting people to pay up more for less shares in return. But overall point was that if we estimate, in success case PRDs value is in pounds than in pence, does it matter if someone gets in at 10p, 20p,30p,etc.?
All imo and could all be wrong, and no advice given. So always dyor.
Paul Griffiths to use his own words `very, very, very confident`, and given his confidence in the Morocco prospect probably massively undervalued.
Investing is actually much more psychology than actuarial sicence.
Sir Clive Woodward famously used the Kenny Rogers song The Gambler to get the great England rugby team that won the 2007 World Cup very focused on what really matters.
And, specifically, the line in that song "you gottta know when to hold, you gotta know when to fold".
There has been some very high quality debate on this BB and that will surely have sparked some thought.
For the record, my position is to hold. And, indeed, advance.
I think PRD is well set with limited downside and very considerable upside.
And the corporate equivalent of Johnny Wilkinson at flyhalf.....(PG)
Tim, I share your concerns, particularly the 'round trips' scenario of rags to riches to rags and so I should having been involved with BPC and losing £80K (now all retrieved thanks to PRD performance). Potter was totally convinced commercial quantities of oil existed off Bahamas, maybe they do but yet to be found. Equally PG is totally convinced our Morocco field has the best chance he's seen in 40 years odd of a successful find and, not to labour the point, my respect for his leadership far outweighs that of Potter.
Any investment, of course, is a gamble of varying degrees, I take heart in the fact that there are two hefty backstops present in the possibility of Moroccan disappointment and we all know the potential of the other two projects.
I will remain invested until the whole PRD story unfolds, I reckon MEM is not far off with his 18 months forecast.
GL with whatever you decide.
Hi Tim,
Thank you for that very well reasoned post. As ever with your posts, it was really rational, well argued and, in my view, very helpful to the discourse on the BB.
I fully understand your logic and think all shareholders should read through it and put the views in to the mix of information/insights before they make an investment decision (buy more/sell/hold, whatever).
I think your logic and reasoning path is extremely well put together.
But I myself came to a different outcome and will be buying some more.
As you say, DYOR and this is most definitely not investment advice. And I am most definitely not sentimental about stocks - if it is a lemon, I will bullet it.
But, for my Dollar, I believe PRD to be significantly undervalued (probably significantly undervalued) and will be staying on the ship.
But I really do believe that quality arguments to the contrary - such as yours - add value to the whole BB, rather than hysterical outpourings from those who lost money on some other stock(s) that are not PRD.
Hi clue, I have followed your posts with great interest and value your opinions most highly ,and regarding your recent big picture post I was myself thinking along similar lines, although reading prd prospectus implying there could be a special dividend on trinadad was persuading myself to hold off, your opinion on this would be much appreciated.
Fair point Tim, I tend to agree that a drill will always have an element of risk, the recent BPC drill serving as an example.
I am sure others will also seek to de-risk their investment prior to the commencement of the drill.
The point you make regarding T&T is also relevant, I would like to see oil flowing at somewhere near the predicted rates shown in the RNS, those flow rates would definitely prove the point that CO2 EOR is a commercial success.
Regarding the point, you make about the service contracts rather than oil-producing revenue, I have to disagree with that assumption, as they say, the devil is in the detail and so far to my knowledge there are no contracts with any future partners for EOR that I am aware of.
However, I do feel that PRD are on to something that could potentially turn this into a very exciting and profitable investment.
All in my opinion.
MEM - Have decided to go other way and reduce my PRD holdings going into spud to 10% of the original level, mainly because its hit my target fair value pre-spud market cap of mid £40 mns.
I was always in for Morocco and we know the size of the prize with PRD but IMO market has derisked PRD via the FOMO factor, before PRD has actually done so by drilling and testing a well. With IE, my valuation estimates for these two segments seem too rosy without any actual derisking taking place other than timelines and plans. For Trin assets, my valuation estimate seemed to have a flaw i.e. it can't be valued at EBITDA multiples as suggested in an RNS by PRD, and new contracts have a service value rather than oil producer revenue value.
Most importantly, based on what I've seen multiple times with E&Ps going to drill and awaiting drill results, holding through for drill results have not been as rewarding i.e. the risk-reward has been quite poor. Whenever there has been a successfull drill outcome with a commercial oil or gas discovery from an E&P, the sp has opend up maximum 30% in most cases(depending obviosuly on whether its a very small sub £15mn mcap or a mid cap), while if there has been no commerical discovery, sp has opened down more than 60%+ on average.
Its simple stats I've observed. So would rather pay 30%+ more on the market open, for a successful oil/gas drill result than hold it through to the drill results irrespective of the CoS i.e. that is still a probability thats conditional on a lot of things going right. Plus a successful drill and testing result at PRD derisks a wider acreage so will be happy to pay more than what I'll be selling pre spud for a derisked discovery.
Plus have experienced multiple times with micro caps these round trips from loss to big profit to back to loss, hence trying to avoid it if I can. Of course, PRD is different but my margin of safety was big at c. 15-20mn market cap levels with other two business segments covering a good part of that mcap, but can't say that with confidence at mid £40mn levels, unless a lot more derisking news comes out at all 3 segments. A 100% rise from current c.£42mn mcap levels will take us to c.£90mn mcap which would IMO definitely would need drill result derisking news. Btw comparison with 88e is strange, as 88E might very well have a oil discovery with PANR prospects extending into their acreage, aside their current drill program.
The fact is, can always buy back if a significant derisking event takes place given all the research done.
All imo and could be wrong and no advice given. So always dyor. Reasoned counter opinions welcome from all?
Andro - fair point
Indeed, but ramping for nefarious reasons on a Saturday is a bit of a waste of time, so I’m cutting MEM considerable slack, and enjoying the pleasant picture painted!
MEM - that’s one hell of a ramp there!
Yes, we should be optimistic, else why would we invest, but not get carried away.
I was at the Shard, when Sound announced the Tendrara discovery. Unless they were Oscar level actors, Mary Hood and Parsons were genuinely blown away by it. I think they were then very naive, to which arrogance and greed kicked in., supported by that awful bunch of greedy investors, as evidenced at the Gherkin. In the end Parsons was pretty cynical.
From what I’ve seen, PRG is way more experienced, and cautious, so I remain optimistic.
grear should of course read great
Good morning MEM
I too have grear expectations of PRD..... But steady on there. :-)
Good morning fellow SH.
We have a large number of new names arriving on the BB, which is very good news, however I wonder if new hands fully appreciate the enormity of exactly what PG has put together and how that will translate in to M/Cap vs Time.
For me it is now obvious to join the dots and see how massive PRD could become, other parties have completed extensive research re likely value creation for each part of the businesses - the word Massive will become an understatement as we unlock each part of the business.
The imponderable is the T factor ie TIME element, we are lucky in having PG as CEO, he is a man on a mission, he wants to maximize SH Value over the shortest possible timeframe.
PRD is his last Company before retirement, he will want to go out on a high, both money wise and reputation wise. PG is not getting any younger, he is lining everything up for an explosive finale.
I look at all the moving parts, different regions, Cultures and differing requirements...... PG is orchestrating all of this to create huge Value, I fully expect everything will be completed within 18 months.
So now if you look at Value creation vs Time, you have an explosion of M/Cap over a relatively short timescale, EXACTLY the DNA that Investors wish to see.
As our M/Cap increases prior to our Morocco spud, I expect to see a steady increase in share volume, on successful completion of our first drill, the SP will really start to jump, 5p probably 10p per trading session, because the metrics will improve dramatically, then Morocco will be seen as unlocking future potential across our other high probability targets PLUS other area’s in our Morocco 7000 sq km license area.
18 months to watch the SP rise, Morocco sold off by Auction, Special Divi, all the while, Ireland bubbling away, this Autumn will see Ireland ‘bend the knee’ and T&T will slowly take shape with news flow steadily building a head of steam.
Sept 2022 will see PRD sold, latest.
This leaves a massive opportunity as a PRD investment, Value creation vs Timescale.
Be ready for a 100 bagger over 18 months, quite extraordinary investment opportunity is sitting here, ready for people to grasp and have the ride of their investment lives.
It will not be a steady increase of 5 fold pm, it will be a brutal swing upwards, news flow driven. I am aware many SH here have 7 figure holdings, be prepared for 10p rises per session, or £100,000 jumps in your holdings per day, one or 2 people will see £250,000 per day.
Let PG and his team create many Millionaires, DO NOT SELL TOO EARLY.
I ask myself every day, do I own enough PRD ? and as timescales compress, the answer becomes more obvious and urgent, and I buy more and more :)
DYOR