Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Does anybody know how much it costs to release an RNS? With so many tiny share purchases, all accompanied with an RNS, the admin costs could be significant for WEN... Or is this a free service? (given the annual fees)
Anybody knows?
Exxon back at 10% per annum??? Really.... Exxon's dividend yield is approx. 4.5%. Stop the nonsense Geo.
Damofari, I don't really follow M&P, but it certainly would have been a better investment than WEN. I like the exposure to oil. I like Pertamina's ownership less; same for the amount of debt that the company carries. Two years ago or so M&P was really fighting for survival I would say, but right now they are obviously doing great.
CPerkin: good question. I actually hate my own cynical view on this (and I would love to be proven wrong on this), but I fear that Aaron is doing very little indeed. Please drop Katherine an email and ask her why they need a chief operating officer, given that they are not an operator, and what he is in fact dong on a day-to-day basis. I expect you'll get a reply with the usual repetitive waffle about being a “pseudo-operator” and “helping M&P”, but it’s always good to check. In case you manage to have a longer conversation ask what the “helping” means given that M&P doesn’t do very much either, and if M&P pays WEN for these services. You won't get a reply on that last question I suspect.
Ticking up slowly or at a standstill
It’s not as risky as some on AIM but I can’t see any point in increasing holding unless they are willing to actually do something?
Who needs dividends from a rinky dink one horse AIM oily when EXXON are back to 10pct per annum. And there is always a risk production starts to go down forcing a big spend.
Could be worse I suppose but no ambition.
geowiz/mick2020; some good contributions there; thanks.
I think we all agree it's a bit of a money train for the BODs; my view on excess wages (syphoning off of profits), has always been if you are going to do it, at least take your shareholders with you. If you are delivering to me, i don't care what you are delivering yourself. When you are delivering only to yourself I do care. And i agree change is needed, either in the people or the attitude.
Couple of thoughts....why does this seem to be ticking up slowly? Can't see any obvious catalyst...
I've been looking at M&P (MAU), and as a holder in Seplat too, of which they own 20% amongst other assets, wondered whether it could be a (better) value way to benefit from this field, whilst also diversifying whilst gaining exposure to Seplat which, i believe, is on the cusp of good things. I feel MAU is undervalued, but then i note it doesn't really yield dividends (despite profiting from Mnazi and receiving high dividends from Seplat). Be interested on your thoughts on this - i think it's a cheap way into both Mnazi and Seplat but the controlling govt holding does suggest MAU's benefit isn't for the wider shareholding base but the Govt, hence interested in your views.
I still can't get my head around why Mr Aaron LeBlanc was appointed as Chief Operating Officer of the Company back on November the 4th 2021, what is there for him to do all day?
Yes I agree
But they won’t need an extension if they let the existing wells decline to zero.. As far as I understand much of the potential 2P volume is offshore or on the margin so I expect it is near certain they will need a new drilling campaign. The developed ..80 bcf to the 2P number isnt going to come from work overs or new perfs. All of AIM oil is like this, the BODs are in a coma, I have no idea what any of them do on a daily basis.
Geo,
Nope. It is not true that 2P volumes can only be produced with drilling new wells. Mnazi Bay is not a mature north sea oil field with a typical bow-wave production forecast, all depending on the succes of future sidetracks and exploration/appraisal wells. Mnazi Bay is a greenfield producing a simple, lean gas, with an easy to predict behaviour. The last well was drilled many years ago. Yes, my background is in oil and gas, and I do not agree with your statements regarding the reserves.
I do agree with your comments regarding the BOD. WEN's management doesn't do anything at all, and after burning ~100 mln or so, shareholders are silenced with a small dividend. Unless somebody forces managment to change, nothing with happen. And why would they change anyway as long as they get away with it? Salaries are sky high; G&A spending is outragious. All this stuff about being a "pseudo operator" is a fabrication. M&P is the operator, they invoice WEN for their work. WEN’s team in Tanzania doesn't even employ any engineers/geoscientist. When Bob finally retires for real (in 2023?) things may change, but personally, I doubt it. They only care about a licence extension, nothing else. Shareholders must unite and force change at an AGM. This has become a money grab issue unfortunatley. Comparable, indeed, with many other AIM listed companies…..
Mick you seem knowledgeable about the oil field so you will well know that 2P volumes ain’t going to be achieved by a couple of work overs and compression. They will need additional development wells and crossed fingers. We do agree on the BOD abject laziness and lack of ambition which seems endemic across AIM. If they drill a couple of wells and prove up more gas this may be good I admit or maybe expand somewhere else. However presently they are edging toward a production cliff edge be it at 30 or 40 bcf/yr makes little difference. If this hits decline before they have a plan it’ll be v ugly.
I thought its still CSI.
Agd50,
The Kinyerezi extension will actually add 185 MW capacity in total, which is 35-40 mmscf/d. Saying that, I think you need to assume a 50/50 split between Songo Songo and Mnazi Bay, so it should add 17-20 mmscf/d to production, when running at full capacity. Best chance of that is in the dry season (second half of the year).
But very positive news that the commissioning seems to be really happening now. We've been waiting ~5 years or so! Does anybody know who is doing the commissioning?
yes, an 130 MW added for Kinyerezi later on, (about 22 mmscf/d)
70 MW should requre approx. 12 mmscf/d.
More capacity (70MW) coming in april it seems , good news (let us hope demand increases also) :
https://dailynews.co.tz/news/2022-02-116206638a55350.aspx
Geo,
In the real world, 1P and 2P volumes are defined by international standards, and in the case of WEN, the 1P reserves are 221.7 BCF and the 2P reserves are 423.3 BCF (100%). If you don’t believe or understand these numbers (independently verified, annually) then then that is your problem. Annual production is also not 40 Bcf but 30 Bcf, but that aside. WEN will invest in the compression project to unlock the 2P reserves. Reserves are not a problem for the company. A much bigger issue is that after compression is installed, management can continue do nothing at all (while pretending to be busy), as they will never recover the 2P volumes before the end of the current licence….
I know 80 divided by nearly 40 ( the annual production) equals 2. What does it equal in your world?
Why would you not want them to invest in future production?
Do you need the dividend? Not sure what the BOD are doing here but they need a plan before decline sets in or this will tank.
Geowiz,
You surely must be glad to have seen that the PD (and PDP) volumes are significantly higher than 2 years ago: 82 vs 70 bcf (PD) and 82 vs 58 Bcf (PDP). And you know what? No new drills, no new hook-ups, no compresson, no 3D seismic..... nothing at all. J
Must surely be a very bad reserves report therefore, even though it is prepared by some independant experts, no?
Amazing how clueless you really are. You know absolutely nothing about petroleum engineering or reserves accounting. Go away.
Solid or boring depending on point of view..
Key here is still the Shrinking Proven Developed ( PD ) which is 2 years production, 1P and 2P numbers are pie in the sky until they raise cash to drill up and develop them.
What’s the plan? Are they going to sit around and wait for the existing wells to water out? Shrinking via production year after year is not a forward plan imo.
I like the increase in cash reserves with little to no borrowings we must be considering a further acquisition.
Very solid report, I like it a lot. 1P, 2P and 3P reserves all dropped less than expected (3P showing a big increase in fact!). If I look at the P/z plot for the upper MB (figure 4-28) then I wonder if there could not be a lot more in the ground.... MB-2, MB-3 and MB-4 all start to deviate from the decline curve, in a very positive way..
Also, very important, compression costs have come down, from 44 mln to 20 mln. Wow, that's 24 mln more cash (100%).
Mnazi Bay clearly continues to perform better than expected, and it would not surprise me to see even bigger positive adjustments in future. Could the Upper Mnazi Bay be connected to a larger volume offshore?
All in all, an excellent report in my view, it basically saves the company. Te dividend looks absolutely secure for the next 9 years..... Not sure if it is enough to convince more investors, but time will tell.
Highyield,
Thanks for posting!
hmm....
Using the averaged out CPI for 2021 is fine of course (is indeed 4.7%, see link below), but was the gas price in 2021 3.2825 $/mmBTU (as in her email to you) or was it $3.35/MMbtu (as per the RNS)?
The Opex estimate of $0.54/Mscf was for the whole of 2022 (see RNS), so what has any cost-backloading to do with it? Why is it higher
It remains vague and disconnected.... as so often before. Ultimately, it's all about how much you trust WEN's management and unfortunately, I don't.
https://cpiinflationcalculator.com/2021-cpi-and-inflation-rate-for-the-united-states/
Hope all is well with you.
Apologies for the delay in responding to you; I have been travelling this week.
In relation to you questions below:
1. The gas price indexation is calculated based on the formula within the GSA and the CPI Index workings are taken from the average monthly CPI data for the US over 12 months as per the below:
Index for CPI 1.04698
Gas Price 2021 ($/mmBTU) 3.2825
Gas Price 2022 ($/mmBTU 3.4367
In summary, this indexation is not the same as current inflation.
2. Opex. The reason for the increase is that we typically see operations costs back-loaded and coming through towards the end of the year. There are no fundamental changes impacting opex/Mscf.
3. 2022 Capex guidance. Field operating costs are typical on-going costs as usual. Field development costs include the FEED / compression budget.
Hope that helps.
All the best
Katherine
On 31/12/2021, based on the M&P estimate, 1P reserves are 221.9 Bcf or 7 years of production at the current flow rate (so until mid 2029). 2P reserves are 425,1 Bcf, or 14 years' production (until 2036). The only big CAPEX investment required for either case cases is the inlet compression project that is currently in de FEED phase. MB-5 will add even more volumes (~200 BCF), which is the 3P scenario.
Stop twisting my words Geo. I said that you can consider the reserves as essentially infinite FOR THE CURRENT LICENCE PERIOD, so until 2031. The company can bring forward MB-5 if demand is permanently increased and produce at 130 MMscf/d (or higher even) until 2031. We are demand constraint, for years to come.
It looks as if you don't understand the CPR Geo (or can't be bothered to read it properly), yet you continue to post repetitive and false comments. So that's not trolling?
reserves were infinite - they weren't initially and couldn't be unless untapped; no one could ever think that, just as i can't think they will be exhausted, without 'spending' imminently; maybe there should be more than the current ongoing spending, but without an increase in such this has more than 18 months at current. With, considerably more.
Idiotic trolling..
Initially the reserves were ‘infinite’ now 1p lasts until 2027
However 1P is not what they can produce from existing wells so they will need lots of new investment to get there.
The 100 bcf is what in theory they can get by managing existing wells which doesn’t get you much further than late next year. For sure they need to get on spending or the gas production will collapse.
I don't see WEN splashing all their cash on SCIR's 25% either, it's out of their current price range based on the Zubair transaction anyway although it might be possible for WEN to be involved with another additional partner regarding Ruvuma & or Kiliwani .