The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
The salary issue is very visible and aggravating but I would prefer to know what probability JP is willing to provide for the sale of the company within the next 12mths. I don’t mind if he defers the salaries until we exit but the inability to meet timelines is putting pressure on everyone B4
This has been a bad day but I have had worse and look forward to what JP has to say about the strategy going forward and I would appreciate something better on timelines than the often repeated 12-18mths. This is really too big a game for an AIM explorer which JP acknowledged with his 3 wells and sell strategy. The issue I am concerned about most is how well he has stress tested our cash flow. The involvement of schlum gives us tech support and the ownership of sound shares by OGIF is supportive but the team has to close a sale with 2019. I am disappointed for all fellow shareholders particularly those who bought in on the golden ticket hype etc it influenced my decision about how much to hold let’s see what the AGM brings... B4
Snaffleman you are correct PW is a decent CEO and a nice guy but sometimes his optimism gets a little ahead of the reality of the situation. I enjoyed the Chariot ride from 25p to 300p and made some cash but his decision to drill a $75m well without a partner was rash and the trip back to 2.7p has been painful. His $1bn company comments are interesting but he needs to keep his feet on the ground this time around.
Our market is dictated by the market for our shares which is mainly PIs and with 2-4m traded a day there is little to deduce from the volume other than we are not in the target zone for any IIs . Almost all small E&P stocks are unloved at the moment so we must trudge on hoping for a successful drill which will cheer us up and improve sentiment. IMHO the ultimate LE value will be impacted by energy market factors rather than AIM sentiment. One matter I would like to understand a bit more about is the connectivity across wells drilled - in earlier presentations Luca had provided some good information but it would be nice to see this updated for TE-7.
Prudent your view of things is very accurate in my opinion. When I spoke with James 18mths ago we discussed how many wells a major would include in an Exploration and appraisal programme across Tendara and settled on 10-12. Each well will provide something in the appraisal process and it does add value. The TE5 Horst project demonstrates flow and in many ways is an experimental project which could be replicated across the licenses for a wider full field development - this groundwork is valuable and the fact it has been undertaken by recognisable companies is excellent. I look forward to the GSA & FEED outcome.
speculater - sorry missed your post. I have 20 wells c15bcf per well and 15-20mmscf/day at $12.5m each which includes drilling and production infrastructure at each cluster plus interfield lines. I have no idea re depletion rates but I have scheduled the wells in a logical manner.
SO I have looked at the FEED award where they have mentioned $184m of development capital I have used $200m and considered the not to exceed fee of $45m using a variable tariff on production to calculate the IRR; there is a tax holiday for 10yrs which would suggest best to front load production but I have kept it constant. Post tax holiday we have 5% royalty and 31% CT I have made some allowances for this, it works out at about 8-10% across the whole revenue stream. 70 scuffs moves things up 10-15% based on how you view additional well costs and the BOOT fee. It sounds an exacting process but I only did it to check how JJs comments about GSA price stacks up and they do. If I was being critical I would say CAPEX will be higher than the FEED RNS and so BOOT fee will increase but the cap of $45m should support c$300mm CAPEX @ IRR of 12%. I am fairly satisfied that 60-70 scuffs provides a NPV of 25p+ have a good weekend B4N
rather than work on price per Tcf I have run a model using 60scuffs/day @ $8 with $200mm of Capex for the facilities which will be paid to the BOOT contractor using a tarriff generating an IRR of c12%. Drilling will be operator cost and over 15year production I expect about 20 wells. The NPV10 value per share @$8 is 25.9p; @$7 is 21.1p; @$9 is 30.6p....what does it mean??..well the project looks economic but it is very sensitive to the GSA and what the CAPEX will be for the CPF and the pipeline. Over the lifetime the project will produce c300bcf and use a bunch of fuel gas. Even a 10scuffs/day upside really pushes the economics along. Anyway FEED (with CAPEX) and GSA needed.
dodge_meister good bit of rough counting...@ an export rate of 60mmscf/day we will produce about 200bcf over 10 years but will use a bit of fuel gas for our compressors so plenty of upside before considering prospectivity.
Eric there seems to have been a big early morning selloff but it seems to have held at 17p. How big were the early trades? I wonder who is buying up 3m shares...perhaps JJ & Brian ....sorry I did not want to start that discussion again but I couldn't resist it making a comment. :-)
I took from the comments yesterday that it would cost as much to wait around as it does to drill. The final processed data may not provide any better answers than we have with the fast tracked data and porosity is our key risk which is not going to reduce significantly. My view is get on with the drilling and if the final processed data turns out to be much better we may need to drill again. Worst case we have a 650bcf project (60mmmscf/day) and a bunch of exploration back costs. I would like to get the GSA signed off.
one of our problems is that once you remove the cornerstone investors and OGIF our market is made up of small PIs and we are very sensitive to sentiment. This has been a weakness which has not been able to be fixed. If we had experienced IIs onboard then their internal evaluation expertise would assist with establishing core NAV etc, in addition our overall liquidity would be improved.
Yes we would all love some TO action but with OGIF having exchanged their licence share at 81p for Sou stock it is unlikely there are many suitors out there willing to meet OGIF experience expectations! Plus we no GSA and/or FID BOOT deal. I have a few questions for JJ
Hi Andytr sorry to be pedantic Butas I mentioned below the fact we don’t have a GSA means our gas resources are not technically reserves and therefore cannot be fully valued. This is very important and JP & JJ know this ...if we had to raise debt forthrdevelopment lenders would insist on seeing the GSA without this we have cash & intangibles on our balance sheet. Time for JJ to earn his corn.