If the Innis situation continues at 50-50 what can Cerp expect
Recoverable reserves of around 8.9m less the 10% of the pilot, on today's price of $26.79 would give around $11 per barrel after costs and taxes.
Overall there would be $88m in revenues less 10% untrievable would leave approx $80m divided by 2 =$40m each.
A $4.2m cost to buy for a potential $40 seems fair to me even at these low oil prices.
At Saffron the potential revenues at $26.79 of 11.5m recoverable reserves is $253,000,000 after costs and taxes :)))))
I hope Prd do buy it even on reduced sums $2-3m at Saffron will make far more than at Innis.
I think Prd will do ok at Innis overall but not with the pilot, the recoverable barrels in the Herarra 2 pilot zone will only just cover the initial set up costs let alone the buying costs.
Will be interesting to see a new CPR report on what recoverable barrels are still there.
Could a deal be a possibility with a lure of joint venture on Saffron? Who knows, we don't get told anything
The clause in the agreement is $4.2m , Cerp do not have to accept a lower figure.
The way it is at the moment the revenues after taxes, costs etc are too small to share 50/50.
Even at the $60 WTI levels revenues were only $30 and then less $10 per barrel.
Again I would ask what benefit is it to Cerp?
The CO2 project might be good for PRD.
What are your thoughts on what good is it for Cerp?
If you have read my posts recently you most know I don't think it is especially at these low prices
The only benefit to Cerp would be a sell but not sure where they going to get $4.2m from.
I see LLL trying to discredit this but he can't tell me that the lenders didn't know of this clause, another pointless post from him
I've seen that the professor is probably right , test everybody every week and isolate those positive results and their contacts. Sounds like what S Korea trying to do.
I don't know where all the tests are going to come from though, Ncyt :))
I'm not surprised by this new extension with all that's going on lately.
I would have thought Heritage would be having trouble negotiating with the government to finalise any deal.
If they change the IPSC terms for Cerp then all the others will need to be looked at.
Agree with LGO that the Bod are light years from shareholders they're lucky they have any left.
Very poor at communicating anything
I just read in the Times that Schroders have sent a letter of support to all the Ftse 350 companies but warned against issuing new shares before cancelling dividends, bonus and executive salaries.
The Government have relaxed the rules on companies raising cash from share issues and don't have to offer them to existing holders.
That seems a bit one sided and fair play to Schroders for doing what the government should have done
Getting out of Barclays was a nightmare for me and one stock went under in the process still charging me account fee for that 2.5 years later. If I did it now in hindsight I would sell everything and just transfer the cash and take a hit with the fees.
Very optimistic with this sp holding my account up at the moment.
Good luck all for next week
Hi Obadhia, mossma
I appreciate the original economics were probably worked out at a higher WTI but from the Cerp presentation Innis would produce revenues of only $30 due to spt etc so there is not much wriggle room.
The original estimate for the pilot was $800,000 and a 30% saving has brought it down to $600k.
If the Herarra 2 zone is at my low estimate of reserves then the recoverable reserves will only just cover the $600k costs
Cerp will only gain if they buy it from us even at a lower sum, then that money used on Saffron where the fiscal regime will make us more profit than Innis.
Thechancer asked about a merger, I hope not, the Moroccan venture with Sound cost me, the sandstones can get very tight with a Darcy less than 1 and I would exit here if they did merge.
If there is a merger- I'm just throwing in for discussion "Echo" just a thought, that looks more Leo than Prd.
Today's oil price is $25.49
From Prd website Innis has 89m barrels of reserves they are saying that CO2 could retrieve 17%, so that's 15,130,000 barrels on the whole of Innis. The pilot area is targeting 10% of that =1,513,000 recoverable barrels less 10% that will not be retrieved = 1,361,700
This was from 5 zones in the Herarra sands, it was decided that Herarra 2 zone was the best for the injection of CO2, I have not found how much they are targeting.
I have in my notes the original pilot would have 90,000 recoverable barrels less 10% not retrievable but it looks like it maybe more than that from the above figures.
On today's price to get back their costs of $600,000 they would need $7.4 per barrel if there are 81,000 recoverable barrels or at a higher figure of say 200,000 they would need $3
$10 lifting costs and 22.5% taxes @ $5.74
At 81,000 barrels costs =$21.14
At200,000 barrels costs =$18.74
At the higher level there is only $6.65 per barrel profit to go towards the full pilot and if they have to pay Cerp 50%= $3.32
Is it viable I'm not convinced yet
My view on the lockdown is it came in too late and should have been stricter with more rigorous testing to trace and isolate people.
The testing issue is complex, we have some of the best scientists but the industry is more geared to making drugs than test labs and kits and has been the governments Achilles heel.
Am I concerned about taking the risk of catching the virus, well at the moment yes. After hearing what those poor people have gone through the lockdown will prevent most of us catching it at this time.
Most viruses weaken over time and the longer it takes to catch it the better.
Not having a lockdown of any sort they have predicted 500,000 would lose their lives.
I doubt the housing industry would have had any chance of survival with those sorts of figures
Hearing the stories of people who have had the virus and are now recovering, your remark "not worried about getting it" I feel is a little naive and insensitive .
As far as global warming is concerned the virus has stopped it instantly, the air outside smells so much fresher.
I've reading Prd web site apparently if they start phase 2 the period when they can acquire Innis can be extended to September . I would expect the time will be lengthened anyway.
They do mention in an Rns that they're on the look out for an acquisition, are they going to offer less than the $4.2m, I would expect so.
I am unable to disagree with what you're saying but all the reading I've done lately on the vaccine is that the Australian trials really inconclusive and in the scientific world that's no good. The only drug that seems to be working is rendesvir, the one developed for Ebola, but it's not the vaccine it's helps the people infected to recover, unfortunately it is in short supply.
The vaccine is not a drug if you read N4pharma Rns they've developed a partial skin cell of the virus and sending it to labs for them to produce a vaccine .
Jennie Harries on the Daily briefing was asked about the Australian project and dismissed it and confirmed a vaccine would not be available this year
Any vaccine produced is not expected to work well on the older generation anyway as our immune systems get weaker with age
The directors must think this is serious 30% reduction in salary, bonus cancelled, pay rise and pension rise cancelled.
Hsbc cancelled divi
From what I've heard about Sweden I believe they're in for an awful shock, they're trying something different.
Our method is to protect all ages, it doesn't just protect the old, look at those 2 young lads yesterday it's awful for everyone.
I've done a lot of reading lately on the tests, the main one here from Novacyt is claiming to be 100% successful in testing for over 1700 different types of coronavirus. There are 2 in the US that are reported to be only 90% successful, scientists are saying that isn't good enough and orders are now coming in to NCYT from the US. The chemicals involved are in huge demand and can't be made fast enough.
That is the antigen test , the antibody test to see if we've had it is still new and not 100% reliable yet but is very close to approval.
The vaccine in Australia has not been proven and is unreliable. There are scientists all over the world involved with producing a vaccine they are saying it will take 12-18 months to get in production.
The worry with the vaccine is , if the virus weakens over the Summer the financial pressures will turn elsewhere and the vaccine will not be produced as what happened with the SARS epidemic in 2003/4.
As for share investing it's very tough time, the HSBC cancelled divi is a blow to me, I need to sit down and decide is it worth continuing with divi shares and invest more into testing companies and gold while this crisis remains maybe 6-9 months.
All the best whatever you decide to do