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One thing I have been wondering is Graham’s view on this partial sale with unnamed company. There’s barely any mention of it coming from Sound so is it off the table?
To be honest I’d hope so or expect terms to be renegotiated in our favour considering how much further forward we are.
Lets hope for no more dilution to achieve that......
I think when we get to 1st gas in 12-18 months the market will already reflect the achievement in the SP
Gas will flow in approximately 12-18 months.
HI fishboy for what it’s worth I don’t think the share price will drop much lower. Hopefully there will be a sustained rise from here on in but it will get boosts like positive a RNS or announcements such as agreed tenders for the supply of the micro LNG plant. The real boost in my opinion is when the gas starts flowing and generating revenue which hopefully will be completed in the very near future.
Think the gas will flow sooner than expected as we have quality partners with connections in country
I also think a few were watching and waiting for us to go belly up, so a cheap offer could be made , but now we have a plan that may bring some offers to the table ?
I would love to know what repaol/ shell are doing or have done so far
Although positive RNS will make the share price move , we can see that despite the very good news this week that we are still struggling to get over 4p. As soon as the gas is flowing from Te5 horst and revenue is being generated then that's when a sustained shareprice push will come. The question for me is when will, this gas start to flow ?
ps’s maths seems to make a lot of sense at 8.5p current value. There must be upside on top of this though as that’s based on the 23.3% sound stake. Any deal which provides a better ownership stake changes this for the better and potentially woukd up the share value.
Once LNG production has been agreed then this with the scope of the further exploration potential here must make this a far more attractive share to many. I suspect Sound may then also attract a buyer for the asset. IMO - interesting and exciting times ahead for those who wait.
PS , I agree with estimation of your figures but as tincan has stated we also need to factor in all the other potential assets in the region and the future potential they hold. One thing I am confident of and that is the company will be taken far more seriously in the market when they actually start delivering what's in the ground.
I’m thinking that 7.5 p may be cheap , as were not completely sure of the gas structure size around the Horst and what it’s connected with .
7.5p is to cheap!
Yeah, it's based on the value retained by SOU under the abortive farmdown from last year. As such, it's just a finger in the air, and would be nice if it was too pessimistic based on SOU bootstrapping itself via mLNG.
I’ve completely lost track of all these different figures. Where did the 22% come from? I assume it’s if the partial sale goes through?
ShareTrader123: "Remember that the Te5 Horst will soon start producing and that according to Malcy every trillion cubic foot of gas has the ability to add 1 pound to the share price."
... which confirms the broker note with less complicated sums. TE-5 = 0.377 Tcf recoverable x 23.3% SOU share x £1 = 8.8p. Using the broker's own figures for horst value at NPV10% and 47% IRR, I got 8.5p. I believe they included some tax and debt considerations to arrive at 7.5p. If SOU retains a greater share or further appraisal indicates the mid-case is too pessimistic, that number goes up.
ericnat17: "Also the research note is based on sound have 22% of the Horst, so you can double the 7.5. It also clear the the does not include any exploration upside at eastern Morocco and does not add any value to sidi."
Correct. It is quite conservative. It assumes SOU will retain only 23.3% of Tendrara, and not receive any financial compensation in return. The LNG project (imho) provides the potential to part fund the pipeline and/or further exploration, without SOU getting excessively diluted. However, that's a trade off of more value retained vs. pushing the realisation of that value further into the future.
Pontcanna: "You actually believe broker notes ?"
No, I actually READ them. And understand them. Did you do either? And if so, what part of it did you disagree with?
One thing is for sure eastern Morocco and sidi will be explored sooner rather than later.
We are now on the brink of signing a deal that will fund exploration.
The real question is will it be sound who drills these holes. My guess we will be bought out before we even get close.
I was under the impression that JJ quoted a value of the Horst being 27p a share, we are going to have about 10% dilution with the LNG deal but we will go again with exploring hopefully high cos targets and if the pipeline deal proceeds, sky is the limit.
Also the research note is based on sound have 22% of the Horst, so you can double the 7.5.
It also clear the the does not include any exploration upside at eastern Morocco and does not add any value to sidi.
If we get sidi news of a farm in then 6p will be reached quickly
Remember that the Te5 Horst will soon start producing and that according to Malcy every trillion cubic foot of gas has the ability to add 1 pound to the share price.
Indeep71 been frequenting these boards for almost as long as I've been invested in Sound, but only signed up to post/give my opinions on things during the 'pause' JP had for marketing purposes. I was convinced at that point that no matter what I stood to make profit with my relatively low average coupled with the inherent value of the horst. The scenario I did not foresee was a deal being agreed with an anonymous bidder with no money while also abandoning the 3rd well commitment. Many people have posted over the years, people with whom I've strongly disagreed such as mickytentoes among others. When he predicted single a digit value (think we were 25p+ at the time) I thought he was either crazy, had a deramping agenda, or was just plain stupid. Yet less than a year later we were sat at sub 1p. He may have just been lucky, or he might just have far better insight than me. But this is what I mean, the ultra negative posters have been annoyingly correct. The more positive posters only fleetingly so.
But having said all that I am optimistic that I'll make a decent/modest profit in the end. I like the new management set up and the plan they have decided to pursue. The strongest possible indicator that now is a great time to buy is that for the first time in about 8 years I have no spare money available due to moving house. Therefore it is a virtual certainty that now is the optimal time for newcomers to invest or holders to average down.
I am not sure how much you can read into the research note. If you read the LNG section it does not make sense.....
Did anyone actually read the broker note? Under their modelling, SOU's share of TE-5 gas production is worth 7.5p / share. I checked the numbers and it looks about right. Could work out better if the modelling assumptions are too pessimistic. But anyone wishing for 15p / share or more has to hope that either there is additional successful exploration, or a mad rush on the share by speculators who are equally uninterested as themselves in the cold hard facts. Given the focus is on monetising the existing assets, any new exploration must be at least two or three years away.
That is not being negative, them is the facts. It's the people waffling about 20p by Christmas (for no reason other than it sounds good) who are blowing hot air.
WoundLick what name have you gone by before, 10 years and only on here since June........ Pumper n Dumper perhaps???
15p would be nice......