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Gave up reading the board yesterday as it was full of dross, misinformation, fantasy calculations and unicorn hunters.
Reading this morning, some semblance of sanity has been restored as traders have moved on to the next 'bestest share in the whole world ever' , so i'll post in the hope it doesn't disappear in a cloud of spam.
What a number of people - mostly new posters - aren't understanding are the costs and deductions in addition to the $6.50 cash costs per barrel. You have to factor in the production sharing contract (PSC) where >50% of Gross revenue is deducted and goes to the Egyptian State via EGPC and $2-$3m pa of depreciation, local office costs and loan interest. Until you understand that, you will posting 'we should be multibags of this value' for the rest of the year until you are blue in the face.
Stop relying on this board and twitter for your [cough] 'research'. Logoff from here, do some reading, understand UOG Egypt and you'll arrive at a realistic P&L and cashflow for which to base some sensible expectation of a mcap
Gingerhippo - the additional shares were from the placing in Feb for the acquisition
trytryandagain - pretty close incl the gas
As previously advised by UOG c. 1850boepd
Oil : 4100bopd = c.900bopd net to UOG
Gas: : 18mmcf/d = c.3000boepd (gross) = 660boepd net to UOG
Potentially 80%+ increase in production if these are stabilised rates. Happy days !
Look forward to BL winding up the RNS machine..
A few thoughts on the Annual Report + supporting RNS, will have a proper read at the weekend:
- Colter written off but not Jamaica. The latter would have been a tricky conversation with the auditors given the TLW position, which suggests they can evidence progress (?). There's a big lump of spend ($2.8m) on the balance sheet for this and obviously a material amount for UOG's accounts - was expecting the accounts to only be released nearer 30/6 whilst it was resolved tbh
- Cash @ 31/12 of $1.3m, is a bit less than I'd forecast due to the increase in admin costs, AIM readmission + Egypt acquisition costs. As part of the RKH Egypt acquisition placing in Feb'20, they raised an additional $1.4m for working capital so that'll bolster this + the Egypt cash of course, which isn't disclosed in the Annual Report notes or RNS (unless i'm being very unobservant). Project spend on the remaining portfolio should be low in 2020, so even if the Crown milestone payment from Hibiscus slips into '21 there should be no issues.
- Egypt profit of $2.4m in 2019, not included in the group P&L as the deal closed post year end. Schedule of assets @ 31/12 provided as per the RKH annual report + excludes the cash position (Grrr!). Simplistically, if you take the profit, add back depreciation (c.$2m) and deduct capex (4wells c.$3m) = $1-1.5m of net cash generated in 2019 by RKH Egypt. The 'not sure' is how much of the opening Jan'19 balance of cash/debtors is 'ours' once they unwound the RKH balance sheet. Hopefully, the next ops update will address the Egypt/Group cash position as well as the El Salmiya result
- The list of >3% shareholders has grown again. Recognise some of the names from previous Annual Reports but mysteriously they disappeared off the website and readmission docs. Possibly in on the Feb'20 placing (but no TR-1s)?
Genghis - a few thoughts:
Parta - I'd move your IMIC2 start date to Sept (per ADX's last quarterly ops update), 3-4 week drill time for this well.
Also 3D/2D seismic forecast for July start. Not as exciting as well drills/tests but will inform how they develop IMIC1/2.
WN: The aborted test last year at WN-A was forecast for 4-8 weeks. Can't see anything on the recent approvals to confirm or change that. Will bow to the techies knowledge if they think this is still valid.
SGbaby - Investegate's got some gremlins today, try this one from the RBD website
https://polaris.brighterir.com/public/reabold_resources/news/rns/story/xq1mdnw/export
Notes in lieu of a proper meeting due to Cov-19
I don't think anyone has posted on this board unless im being unobservant
https://www.rathlin-energy.co.uk/wp-content/uploads/2017/06/West-Newton-Community-Liaison-Committee-Meeting-Notes-21-May-2020.pdf
Hi artyth - I assume that as work has commenced at WN-B that Rathlin will have already made a cashcall on Humber for contributing towards the access road, site prep, kit and contractors for the drill etc and have the necessary comfort that future obligations can be met (as with UJO). Humber's bunfight with Egdon over Biscathorpe isn't likely to be about their ability to pay, it'll be something in the farm in contract that Humber are disputing imo.
miker444 - hope all's well mate. Haven't posted on this board in ages as like most LTH's am quietly sat back waiting for the action to commence.
Looking at these Cali figs (cheers for the link ajb), the numbers reported from this website are pretty consistent:
Oil (bbls) - Feb'20 20,317; Nov'19 20,514; Sep'19 21,113
Gas (mcf) Feb'20 12,282; Nov'19 12,563; Sep'19 12,765
There is still the disconnect between these figures and the historic RNS' / presentations though which still are in the region of 140-150boepd net to Reabold, which I don't understand.
Fwiw, I don't try and compare WN and Parta, although both could be v large in aggregate. The latter is, subject to seismic & tech analysis, a series of small/medium size fields/targets across a number of stacked intervals. Collectively believed to add to a significant bcf size (+ oil) but there's obviously a lot of work to be done to understand and develop the acreage. A successful IM-1 test will derisk IM-2 which has the same primary interval (Pa iv) and ,touchwood, should derisk a bunch of lookalike targets in the exploration block.
Good to see the SP heading back northwards, its going to be an interesting summer here
ATB
jcookec - I'd agree with levistubbs on the group cash position excluding Egypt of being around £2m. I make it c. $2.5m-$3m, if you work through from the 30/6/19 actual ($1.8m) add the first Crown milestone and the retained Egypt acquisition placing cash and deduct 10 months (to 30/4/20) worth of G&A/project spend.
RKH Egypt had a sizeable combined cash/debtor balance at 1/1/19 which I assume all forms part of the assets acquired + the movements in cash thereafter. Annoyingly, RKH's 2019 annual report includes a schedule of assets/liabilities to be transferred as at 31/12/19 but excludes the cash. We should find out the definitive answer soon enough. I won't speculate on the $ value in case part of the RKH Egypt opening cash balance was used to settle some historic inter company liability somewhere else in the RKH group balance sheet which we aren't aware of. RKH Egypt's accounts for 2018 and H1'19 are in the UOG readmission pack on the website if you want to read them.
If you look back at old RKH RNS', Kuwait Energy tend to release periodic operational updates which comment on new infill wells started/tested/now on production etc in that period. They don't usually give a running commentary as many UK AIM Co's do on each new drill. The comms on ASH2 were a bit different as it coincided with UOG RNS' re getting the deal over the line & the local drill contractor blabbing about the exceptional result. Suspect we'll get an RNS detailing the pay across the various intervals and that its on production at x boepd weaved into a more general Egypt ops update. Personally not expecting big numbers - something similar to the first 2 wells last yr would be good. Happy to be wrong and its a whopper obviously.
Looking at the readmission docs, most of the current gas production is from the El-Salmiya field, so the infra is there to tap into without too many capex $'s if there's commercial gas levels flowing.
Just thought i'd check back in.. and wish I hadn't bothered..
Sorry levistubbs I wasn't expecting to prompt a reaction like that; PDMSPiper - you've called this one incorrectly.
A number of posts on this board (and across twitterland) imply or state that all Egyptian oil income is hedged at $60pb with cash opex at $6.50pb. This gives a massively inaccurate view of operating profit / cash to the unresearched due to the limits of the hedge and the PSC terms. The heading on this thread adds to that myth and is what levistubbs was rightly flagging in his original post, albeit with some digit trouble.
levistubbs is a LTH and has been here as long as I have (>2yrs). He calls it how he sees it, both +ve and -ve, which is what these discussion boards are for. A healthy discussion board isn't a vacuous ramp/doom fest as you know from other shares you've held/hold and commented on (RBD/UJO etc) and should never be a shouting match.. if you don't want to read someone's posts, just filter them. This is one of the few LSE boards I still bother reading and posting because it hasn't gone to the dogs and i'd like it to stay that way.
Enough of a ramble, time for yet another 'stay at home curry'.
levistubbs - I think you've tapped the wrong key? 6,600 barrels pm is hedged @$60pb = 79.2k barrels pa.
Total oil production approx. 1,500bpd = 547.5k barrels pa, so only 14-15% of total oil is hedged and over half of gross income goes back to the state via the PSC. The hedge isn't a panacea but It does however give an additional c.$1.3mpa (versus $20 oil) post PSC which helps to keep UOG Egypt operating cash +ve (by my maths) in today's climate.
All the gas c. 300-400boepd at a fixed price too which is good of course. ATB
Slightly belated thoughts on yesterdays RNS..
No huge surprises given the events in N.Italy to see the Selva production timelines move eastwards and assuming markets are in recovery later in the year, gives Po Valley (and probably PXOG) time to sort out their funding route for their share of the development costs. The former are running on fumes looking at their annual report that came out this week.
Also no surprise to see the infill well programme reduced in Egypt given the oil price. By my calcs based on the pre RNS 1760boepd, UOG Egypt generates a net profit (after PSC, cash opex, depreciation, local office costs and loan interest) down to c. $22pb and still generates operating cash of c.$2.5m pa at that low level. At $30pb, operating cash improves to c. $4m pa. Loan repayments and 4x wells would require c.$6.5m in 2020 for UOG so halving the capex programme helps to bridge some of that. Deferring capex also gives the partners more time to work on the development plan for the ASH field and possibly switch some of their focus and capex $’s there. Note – I’m assuming the ‘$6.5pb cash opex’ costs exclude the local office costs - If they include it, my figures above would be higher.
Portfolio pruning was always going to happen with or without Covid-19. None of the partners want to commit further funds to move Colter forward or are looking at divesting, Waddock X appears to be way down Egdon’s priority list for drilling and Benin was an option on a very slow burner.
It’ll leave them with 2 core producing / near producing assets in Egypt and Italy, 100% Jamaica to farm-down (assuming their discussions go to plan with the Jamaican authorities) and the North Sea blocks which should ultimately be of interest to Hibiscus/Caldera next door with their Marigold/Sunflower/Crown development programme. It'll be a leaner more focussed ship for sure.
Brian on Vox..
https://audioboom.com/posts/7547296-united-oil-gas-salt-lake-potash-frontier-ip-group-russ-mould
levistubbs - From RKH's RNS' last year generally c.60 days for well drill, test and hook-in - El Salmiya 5 was spud on 3rd Feb so must be pretty close to news + the Al Jahraa gas tie-in. Just need Putin, the House of Saud and Tangoman to end their willy waving contest