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Just following closely every word from Paul Baay and from XM. This is all very public. In fact they have even labelled chinook an oil discovery and they have planned two up dip wells and marked them on their most recent corporate presentation.
Margin321 in Canada posted this Re Chinoook:
“The Chinook story is not finished. First there is the Cruse - 30 feet of gas but over huge area. Maybe can be drained with horizontal wells but NO fracking and those wells will produce for years.
Second they did misread the increased reflectivity on the wireline logs.
That is because Cascadura 1 and Cascadura ST blew out under very high pressures and they almost lost both wells.
So they used very heavy mud which kept what they though was gas from flowing freely. Turns out it was water. But that story also not done. There was light oil present and there are up dip areas under the same sealing structure that are 1200 feet high. If there is light oil and water 1200 feet from the top of reservoir, there may well be commercial degree of light oil at apex of reservoir.”
Almost as if he has been talking to someone who has a clue!
I agree but unfortunately share buybacks have a sneaky way of funding share grants to company principals - rather than company owners (shareholders). Of course they deserve to be rewarded as well if this all plays out, as do employees. So it is good to have a balance with part of compensation tied to share price in some way.
Dividend yield is a pretty good way to push the share price up to the higher P/E’s where it belongs though as it suddenly becomes very attractive to own. So a combination of buyback at low P/E and increasing dividends over time.
TXP should throwing off cash for the next couple decades, that works for me.
As an investor, dividends means the company decides when you'll pay taxes. With share buybacks it's up to you to sell and be taxed. As a foreign investor you might also have trouble with withheld dividend tax and getting that refunded. At the bare minimum the company (IMO) should cover all warrants through buybacks, or retail investors will be diluted.
Of course if the company is trading at a P/E >20 with no growth expected, share buybacks makes little sense. In a company at a P/E of 1 dvidend doesn't make sense. (Imagine TXP doing full share buyback and you were the only investor not to sell AND the share price was unaffected - then you would own TXP 100% in 5 years time maybe). So of course share price increases as shares are bought back since 1 share means a larger ownership.
So for tax reasons i prefer share buyback, at least to the point where a high forward P/E makes the company "expensive".
**Let's get Coho online before we get carried away with dividends and (better still) share buybacks.**
I would personally not prefer share buybacks over dividends. From what I know, not that much perhaps, share buybacks usually only reward the BOD. They seldom benefit the smaller shareholders. Please correct me if mistaken, but there has been a lot of discussion about this point on the BB's of various companies over the years and that is the predominant conclusion that I have seen reached.
Of course, when we are in a position to discuss this down the line it will be even better as the share price will no doubt be somewhat higher than it is now! TXP is my largest holding by number and value. Hence, any dividend will be warmly received!
I must again note the quality and depth of the posts here, so many thanks to all.
My own knowledge of the island cluster is poor by comparison.
As for Chinook:
1. We do have gas in Cruse, enough to flare. We know nothing about flow rates or pressure testing or whether it is commercial or has bookable reserves. Paul has implied that it likely is commercial and production will be piped to cascadura site only 1.3 km away - but of course that site has to be hooked into central gas pipeline first.
2. We do have TRACES of light oil in water in the lower sands at Chinook. There are several other locations in the formation that are up dip by hundreds of feet (was it 900 feet?) and the assumption is there may be oil (and or gas) at those high points in the formation. That has yet to be proved. On up dip drill would tell a lot.
Did we not have high gas pressure on drill, now flare, so some decent gas on top levels and oil below, everything looking good for dreaming. Just another tip bit Kraken looking good same as Suriname finds and Cretaceous very stable on our plot, what's not to dream about.
Let's get Coho online before we get carried away with dividends and (better still) share buybacks.
How much info is obtained when drilling compared to the seismic? Let's say they'll have 3 - 4 production drills in an area. Is that enough to obtain a fairly accurate "picture" of the ressources. Or what's the best foundation for production wells?
My hypothesis was there is oil and gas in quantity under this whole area like a sponge filled with water and air.
The sponge is the turbidite sands, so far especially the miocene Herrera. I got really interested when I heard a recording of a Xavier Moonan presentation (at scientific conference) about the turbidite sands on shore Trinidad rather than deep water off shore, and why there might be such a system in Ortoire block. Then Paul started talking about that in many of his older presentations. And they have proven it! Coho was a hint. Cascadura was a flat out homerun. and really proved the concept. More to come. Royston is super big piece of the puzzle, but it is much more likely to yield a discovery now than before, given the results of their first four exploration wells and proof of the overall concept.
Highland Matt - just think when we get two rigs drilling production wells 24/7/365 .....
You’re going to need a bigger spreadsheet, and you’ll have the answers for all the untested zones.
I went in heavy heavy here when I saw the fairway on the map and old logs and production. My hypothesis was there is oil and gas in quantity under this whole area like a sponge filled with water and air. So far this has turned out to be correct. Sometimes the risk reward is just so good you have to jump on it hard.
Hi everyone. I was just updating my well spreadsheet for the Cruse test at Chinook. Interestingly, that was announced as Oil. However, there is a flare, so I'm thinking it's possibly gas with liquids? I then looked across where else we had declared findings in the Cruse = Cascadura, 80ft. Now, Cascadura was declared as oil all the way down (Cruse, Upper, Middle, Lower Herrera). Only Middle and Lower Herrera have been tested, and they were liquid rich gas.
Soooo......if TXP was wrong about the 'oil' in the middle and lower Herrera, and in the Cruse at Chinook, does that mean the Cruse and Upper Herrera at Casca could be gas as well? Upper Herrera is 180ft. Another 260ft of gas pay? In strata not tested yet? Makes you think, doesn't it?!