We would love to hear your thoughts about our site and services, please take our survey here.
Fund
I think you are wrong. Am hearing the word on the street is that they are waiting for Governmental approval in regards to the award.
Remembering we are talking about a contract which I am sure is a sub-contract to the main one with China Petroleum.
Just what I hear from local feedback, that said DYOR.
But to me we are very close to an award!
ATB
Good morning!
Interesting - no visible RNS and I suspect a quiet day of trading, maybe a slight rise.
Have to admit I an fairly convinced that nothing will come until next week although there have been later RNS issues very few if any covering Operational updates.
Hope everyone enjoys a happy and sunny weekend!
ATB!
Good morning all,
One interesting comment I missed first time through in the Edison report is this:
..." We estimate development project IRRs in the 50-120% range depending on discovery size, which we believe should attract farminee interest considering the exploration running room."
I think this takes us back to the question of a Farminee involved before the results of SL or possibly in spite of the results.
Edison above this comment :
"Our valuation is based on the expected monetary value (EMV) of five independent prospects:
Snow Leopard;
Wild Horse;
Gazelle;
Fox;
Red Deer. "
Of note here we are missing the 2nd well in Block XX. They then go on to say :......
"The combined mid-case, unrisked prospective volume stands at over 831mmbo which we value at 265p/share in the unrisked exploration success case.................. (we caveat that completely unrisked valuations do not take into account our view of geological, technical, commercial or political risks and should be used for indicative purposes only)."
They then go on
" Applying suitable risking, we reach a risked valuation of 62.1p/share (prior to 50% value dilution through farm-out) at $70/bbl long term (NPV12.5) .
Obviously I like to GBP 2.65/share but also the risked 62.1P/share is not too shabby either. Whilst they go on to say their conservative farm-in dilution takes the 62.P down to 30.8P.
I think reality is somewhere in between those two figures once the dust settles I would think a valuation of around 45p to 50P should be easily achievable in the short term (meaning by year end.) That said I also think next years two wells have the potential to take the price nearer to 70P.
Yes agree a lot of guess work - but I also think worth stating as the current numbers are crazy.
All IMO - ATB !
Good to hear from Big B again, Ham, OJ, Manro, Mikey - good posts thank you! Ronin - great charts thanks for them! Mr P agree with your comment re-NASDAQ but sadly wont happen I dont think. Paul sail safe my friend! Mannnan, Bucc, Loz DG1. D1nger missed your posts!
GLA
Captain - I hate to admit it but you may have a point. The rigs on Block XIX may well be acceptable to the the Chinese as they are but they may need an upgrade for PM. That being the case, although it wont be anything like the upgrade needed for SL/WH although it may take a few weeks.
That said if you read RNS 3298S dated 25/06/18 is says "The selected rig is in country, is operating close to Block XX and is available from Q3 2018. Permitting for drilling is progressing and the first well, on the Gazelle prospect, is planned to spud in late Q3 or early Q4 2018. "
To me late Q3 is end of September and early Q4 is October so I dont think the rig contract is so important as such as to me they potentially can run for another to 7 weeks and still meet their target.
Possibly waiting for permitting to be completed and then we get a single announcement confirming pud date.
MB seems to dislike interim PR releases and so I suspect we may get one only on SL and one at the start of Gazelle.
All IMO admittedly. !
GLA
Good morning all
Some really nice posts from many yesterday. Just catching up. In short agree patience agree is the word. Very hard at times.
Best of luck to all thanks to Terryali, Manro, Ham, OJ, Loz, Bucc, D1nger , JND, Mannan,MR P, Paul and everyone I have missed! keep the posts coming great to hear positive views!
ATB
Fund
Whilst I share your frustration the man is renowned for not being one to keep the market updated on every twist and turn.
I suspect there maybe a delay in dealing with the Chinese. They have a history of elongating negotiations and I suspect there is maybe some discussion ongoing about the production costs they want to charge PM, and they may have linked it to the rig charter in some weird way.
That said the construction of WH should be underway by now, I dont see this as a major event as it has already been announced so possibly we will get an RNS covering the completion of SL, start of testing hopefully and the potential rig move date.
As far as block XX the only other issue I can see is the choice of the 2nd well. Not sure why they have delayed announcing where it will be drilled.
So yes agree very frustrating but I dont necessarily think it is time to panic yet.
That said as always DYOR, whic I am sure you will!
ATB - D1nger, OJ, M P, Ham, Manro, Loz, Bucc, JND and all!
Morning all
Well must be close to the next RNS for block X.
Based on the two sets of numbers from the last presentation I get the following:
1) Assume discounted rate of Brent to PM is US$65/BOE (ie 31/05/18 price of US$76.45/BOE discounted by 15%).
2) Assume 15MMBO case in Block XX and 50MMBO case in Block IV/V
3) Assume increase in price of Brent to US$84/BOE rate to PM is US$71.50/BOE.
a. Increase in NPV goes to $91M based on block XX
b. Increase in NPV goes to $525M based on block IV/V
4) For the purposes of these numbers I am ignoring the 50MMBO and 150MMBO for blocks XX and Blocks IV/V.
To me I cannot see a down side to this share. Maybe I am biased having been here a few years but lets do the reality
Management have quoted better than a 50% chance of success in block XX. Likely that the actual recoverable will be at least 50MMBO. So the numbers we are talking about – (low case) are in the region of US$450MM to US$550MM – based on 632M share this gives share price of around 71p low oil price and 87P high oil price.
SOOOOOOOOOOO - What the fXXX are we doing with a price of 8.9P!!!!!!!!!!!!!!!
(NB this assumes there is nothing in SL, WH, Red Deer and Fox)
To me every which way you cut this share I cannot see a downside! Someone tell me I am wrong please!!
Yes we could still miss in two wells in block XX this year but at a better than 50% chance of success it is likely at least on well will hit.
How much, I agree is the question not if.
ATB o D1nger (always like your posts - they make me laugh firsth thing in the morning), Ham, Manro, Mannan, Mr P, Fund Captain, Paul (safe sailing) , OJ (its coming!), Mikey, Loz, Bucc, JNDavid et al ! Apologies to those regulars I have missed.
As always DYOR but really this is a no brainer and it drives me crazy when I hear the doom and gloom merchants.
To my knowledge in nearly 40 years of investing I have never come across an investment with this chance of success PM has.
Yes a ramp but a ramp to me with good cause!!
Guys
Most drill sits now have security. I very much doubt you would get anywhere near the drill site. More to the point even if you got close all you would see and hear is a rig in operation.
In addition not sure you would get a permit to start trecking around in the middle of the Mongolian outback.
All IMO but feel free!
Good morning all!
Guys
Step by step but some good information of how long it takes to get things done and what has to be done.
Just an FYI
To drill a new hole the process covers the following - (This comes from an article on the web-51 Steps to find oil - Zion Oil & Gas In):
1. Build a new road to access the rig location.
2. Clear the area for the new rig.
3. Build infrastructure for water and electricity around the rig site.
4. Dig an earthen pit to prevent soil or water table contamination.
5. Dig a pilot hole at the precise location marked by the survey crew.
6. Dig two other holes (the “mouse” hole and the “rat” hole) nearby to hold pieces of equipment and pipe during drilling.
7. A rig that can dig a 10,000 ft. well requires 50-75 people and 35-45 semi-trucks to move and assemble the rig.
8. Assembly of the rig takes around 3 and a half days.
9. A strict inspection of the rig must take place once built.
10. Operations of the rig go on 24/7, typically ceasing only one day each year for Christmas.
11. Two shifts of two complete crews must work the rig every day.
12. There are two stages of drilling: 1. running and cementing of cases and 2. drilling until the bit reaches the depth of the targeted zone.
13. Each drill bit typically lasts 4,500 – 6,500 feet of drilling.
14.Replacing the bit requires the removal of the entire string of drill pipe in a process called “tripping out”.
“Tripping out” takes several hours and requires crews to cool the bit and keep the soil and hole intact.
15.To help keep cuttings from plugging the hole, the mud must be sent through shakers to send the cuttings into a separated area.
16.Additional mug system equipment: de-sanders, de-silters and de-gassers, remove smaller particles and gas from the mud.
17.Clean mud is then recirculated back down into the hole.
Might be of interest as it gives one an idea of what needs to be done.
ATB everyone and GLA)
Good morning al!l
Just a quick thought for today. If you count from 9th July to end of August you get 54 days. My bet is on an RNS around 3rd September on SL and details of the rig move to WH.
In between agree a notice on Block XX is likely. Morning Bucc - how are things? Assume Spanish is still causing mischief from your post.
GLA and have a great weekend.
Guys
These are worth a read!
https://www.shell.com/energy-and-innovation/natural-gas.html
https://inhabitat.com › News
https://www.ft.com/content/6c9a9626-ad82-3ca5-854c-424ddd187be2
Shell canvasses industrial gas buyers in new east coast push | afr.com
All indicate a move away from oil and more specifically a move into electricity!
That said DYOR.
Guys
The reason Shell pulled out was due to a stated aim to concentrate on Gas. It was the reason they brought BG as they had large gas reserves.
If you look also at the places they are steadily pulling out of Nigeria also is a case in question. Most of their onshore oil fields have been sold to local Companies.
I doubt very much that Shell would want to come back into Mongolia unless there were significant gas shows.
Just an FYI but DYOR.
ATB everyone and good luck all.
Hawk
Interesting great minds think a like (I hope). Have been watching BPC for a year or two. Sad to say took my eye off BPC just as it jumped. That said happy to be in. Have to admit to wanting BPC to move so I can by more MATD then sell later and by more BPC.
Apologies to all BPC LTH!
Agree with all the potential here is massive. Timing not sure about as I suspect the major will want some more 3D if it buys in.
ALL IMO !
ATB and GLA!
Guys
https://en.wikipedia.org/wiki/Well_test_(oil_and_gas) -
worth reading to understand what needs to be done in terms of testing during exploration and why. <br /><br />Easy to understand and I think makes things clear for all.
As I said earlier the information gleaned from the well may in itself be more valuable than whether there is oil or gas and what flow rates.
GLA all and have a great weekend.
Good morning all
Who started this duster Cxxp? Honestly at times i give up. Yes SL may not have hydrocarbons, but it will also assist in their knowledge of the surrounding geology.
But to be clear no one right this second can say one way or another what is down the hole. I have no issue with someone saying that it may be a duster, just it would be nice to balance it by saying it also maybe a producer.
To me most of the utra negative/utra positive views have no place on the board.
Lets try and keep our feet on the ground. Agree there is between a 10% and 25% Chance of hitting oil. Odds are not great but the largest fields in history have been found when it is least likely.
Example Cairn Energy who drilled three dusters and then the fourth is history! (may have been two) . Point being is that to buy or not buy because it might be a duster to me makes no sense.
The process should be you DYOR, you look at the upside,you look at the down side, look at what you can afford to loose then you take a punt (or not)
Further you read the WoodMac'c of this world and add them into the mix.
ATB and have a great weekend!
Guys
Just a thought. The BG has already approved development of a refinery back in April from memory. Why would they then delay the agreement to an EA., (agreed many people have signed petitions.) but to me it is unlikely. They need the funds to cover their pension debt and create their Sovereign Fund.
AIMO but to me it is a no brainer.
BG need the development of the fields assuming the news is positive and the way to go has to be a major. Not least of which is the fact that worst case their is a spill then at least they have someone to go after who can afford to pay. What they dont want is a minnow drilling and causing major Env damage .
Good day to all!
Back to PM.
GLA.