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I hope so to
Hopefully when we carry pg down the street
Agreed...
good post Keith...
very helpful explanation
I hope to meet you one day
Thanks
Regards
GRH
Quality post KeithOz at 02:40
Enjoyed that.
It is not impossible that the company may go for a placing (they did back last July).
But, given the CPR, they have a wide spectrum of financing options, many of which do not involve a placing. Effectively, they are structured finance options.
Of course, they will dilute the economics somewhat - but probably far, far less than a placing on a chronically undervalued stock.
I, for one, hope that the leadership team and its advisors have learnt some lessons from the July placing mess and will be rather more adept at raising the required funds this time round.
Because, as CPR's go (they have to be necessarily cautious), it was pretty good and gives the company lots of financing options.
I remain of the view that PRD could be a pretty spectacular play and that all the (deliberately architected, in my view) fear around financing may well not be founded (I have to be diplomatic because the botched July placing does make one wonder about management's judgement).
I remain of the view that this stock is probably a multi-bagger and I am in for the ride.
Keith / Sefton,
Many thanks for time in replying.
I think I have much research to undertake to fully understand my questions.
I should perhaps also say that I am not the “TotalTrader” on twitter, I am on Twitter and connected to a few people here under my real name.
I would also say that I am neither a ramper or deramper - I find it amusing that people believe they can affect an SP by comments on a BB, it shows a lack of knowledge in how the market works and what is required to move an Sp - up or down.
Personally, I don’t mind either side to an argument it can sometimes help me to question myself and my own research. A phrase I have modified over the years is “a thousand fools can agree on something that is wrong, but occasionally one of those fools comes up with a statement of genius so never stop listening”.
I shall continue to read this BB quietly from the sidelines and invest quietly in my research.
FWIW my view on PRD is that it has huge potential in a growing market that due to cross border politics has enhanced the position of PRD. Of course there are risks, big risks but with it comes big rewards - “that which is comfortable is rarely profitable”.
My view on will it need more money - maybe but it is in a very strong position to be self funded through an off take or royalty. To achieve the offtake and royalty it needs the answers to my original two questions however to fund $20m in the world of oil and gas is quite frankly peanuts and somebody may very well believe it is worth a very calculated punt to secure a very profitable supply - I imagine those discussions and calculations are taking place as we speak.
TotalTrader, sadly I cannot respond to your question because I have no technical expertise - but I am very glad KeithOz (who normally writes very high quality stuff) has so responded (one should be very grateful to the - quite a few - on this BB who do share so generously of their time and knowledge).
But, whilst I do not have technical O&G expertise - I am just a pricing arbitrageur, though I tend to have a longer time-frame than most arbitrageurs - I do think I have reasonable judgement about the posters on here who do know what they are talking about technically.
Hopefully, LSE will soon restore the posting histories because one will then be able to to see the realtive quality of the posts. KeithOz, GRG, Methodology, PrivateTesla, Obadhia and some others are often quite detailed in their posts (at a level that can be understood by simple investors - like me - and also by those that do understand the real technical stuff). They tend to be broadly positive about the stock's prospects.
I would observe that most of the nay-sayers seldom put up any technical detail or insights.
One can deduce from that what one will.
As an investor - who has been a long term holder and who thinks we are still way south of the summit - I find it much more comforting to see the relative quality of the posts that are broadly positive versus the FUD crowd, who generally steer very well clear of anything specific.
I remain a holder and a buyer.
And I learnt a lot from GRH's explanation of the formula between porosity, permeability, etc (when historic posts are restored, that is one I will read many times over).
TotalTrader - I apologise that no one has answered your questions, it's just that every time the share price increases, a hoard of professional derampers pops up and make lots of ambiguous statements attempting to show the company and its management in a poor light - this has happened today. Once lse has restored the facility to look at chat history, you can look back on a poster's history and make up your own mind if they are contributing anything useful or merely spreading FUD.
Now. You have read through the new CPR - great, that's more than many here. You will see that the resource has been moved from Prospective to Contingent, as a result of the actual MOU-1 drill tests (confirmed by world-class outfit NuTech) and reinterpretation of the seismic work. So what we currently have is a good idea of the area of the reservoir, its thickness, porosity, permeability, pressure, gas content and charge.
In order to move from Contingent Resources to Reserves, an extended flow test (normally at least 30 days) needs to be performed. This will confirm that the parameters already measured are correct, and that the rate of gas flow over the test period is sufficiently uniform and stable to confirm the continuity of the reservoir. The MOU-1 flow test was originally planned to have started by now, but Covid restrictions have delayed assembling the necessary equipment and personnel. Everything is already paid for or budgeted for, despite claims on here that suggest the opposite, and testing is now expected to start at the beginning of April. We will likely know results in May.
The idea is to use the MOU-1 flow rates as evidence of commercial gas in order to finalise offtake agreements. It is intended that these agreements will be adequate to fund drilling MOU-4, which because it is into the same formation as MOU-1 (the Moulouya Fan), will be classed as an Appraisal well, which is the hoped will also be used for production.
So the process here should be a lot faster and cheaper than a typical mineral resource definition. Although I am a geologist, I do not claim specific O & G expertise. There are a few posters here that are better qualified and experienced in O & G than I am, hopefully they will chime in. Hope this helps answer your questions, all the best with your decisions re investing in KAV. - Keith
Geowiz - have you read the CPR? Do you know who NuTech are? Why are you using an inappropriate Username?
Total
Digest the SPE manual: as a start point. Concurrent to that ALWAYS examine the BOD for their 'characteristics'.
Geowiz.
Sound screwed up, but what you say is a complete misrepresentation of why, and consequently the read across to the risks here is also incorrect.
TT - frankly I wouldn’t touch this until the CPR states it’s tested a connected meaningful volume of gas.
There’s nearly always some gas in Morocco wells (see Sound) but given the drilling and logging issues and ambiguous reporting, this is many miles away from proven. And as we saw with theSound Energy debacle one needs a fair bit of gas to make commercial progress. IMV this is a dud but happy to wait for CPR.
Afternoon all,
After maybe 2 years of reading this board I finally post a message actually a question or two.
1) What is required to prove up the resource?
2) What is required to prove the flow rate?
I am generally a mining investor, I class myself as pretty good which enables me to work out potential value at the early stage of a project. To answer Q1) above in mining would require a huge amount of geological work, infill drilling and step out drilling to name but a few, at a very large cost, and that would be for a resource potentially below 500m and not up to 2500m below ground. So I have a feeling it is somewhat different with gas.
I have read the CPR and appreciate that the answers are not as simple as my questions would seem, the smaller sands in MOU1 vs the larger reservoirs encountered in MOU4 an example of this.
I have used the content of this board in the past to give me some pointers at which point I then go off to try to understand the subject and make my own mind up. The fact that I have gaps in my knowledge really means this is currently a gamble for me rather than an investment and to buy more shares and turn that into an investment I have to fill those knowledge gaps.
Any pointers given would be appreciated, one way or another i will research to find the answers to my questions but I’m hopeful for a few wise words to point me in the right direction.
Thanks in advance.