Mime website (news tab) - with update on Balder X project and most recent presentation (May 22)
https://www.mime-petroleum.com/2022/09/update-on-the-balder-x-project/
Mk111,
I daren't now actually attend the meeting... I just can't trust myself not to be persuaded by the smooth-talking Eytan, sell all my PRD and pile back into CEG!! (...then you really might have to call for the men in white coats to save me!).
The interaction between Paul and Eytan at the event could be very interesting. As well as CM, I'd still like to see PRD/CEG work together on I-T. Clearly Paul previously thought this licence was an ideal candidate for EOR so let's hope they can do a deal that's good for both companies.
I see LSE has **** the genus of our own species :-))
Hi Androcles,
I know exactly where you’re coming from, and the fibre issue was certainly a concern of mine before transitioning to carnivore.
A couple of books that I found really helpful:
• The Carnivore Diet by Dr Shawn Baker, and
• The Carnivore Code by Dr Paul Saladino
The former is a great ‘starter’ book. However, Paul Saladino’s book is more scientifically detailed and explains the evolutionary and biochemical principles behind carnivore and I certainly found the arguments to be compelling and intuitive. (I should also mention that my own background is in medicine.)
I’m also very focused on the gut microbiome and it’s clearly key to health - as Hippocrates said: “All disease begins in the gut”! But it appears likely that, despite what we’ve been told, fibre is not actually necessary for optimising microbiome diversity, In addition, plants also contain compounds (e.g. lectins, phytates, oxalates, protease inhibitors etc) that are damaging to human digestion and gut integrity. I’ve been convinced in both theory and, more importantly, practice of the merits of keto and keto-carnivore.
Many nutritional programmes that differ from current guidelines (which are clearly wrong, btw) are considered ‘fads’. But if you consider the whole of human existence (i.e. **** sapiens and our human ancestors) it’s been estimated that we’ve actually eaten a keto diet for about 99.7% of our existence and predominantly carnivore for much of that time - hence they’ve been described as being ‘evolutionary correct’ diets. So I consider that it’s actually our current eating habits that are the ‘fad’ / ‘extreme’ diets (and society is suffering greatly as a result).
(We are straying way beyond PRD here… so apologies)
Morning Nico and all,
Absolutely agree with you about the pernicious nature of sugar. (Actually, as GRH suggests, all carbohydrates, even natural sugars like in honey and fruits.)
Though the overall negative effect on society from sugar (carbs) is far, far greater (orders of magnitude) than from smoking. Simply because practically everyone eats carbs all day, every day.
I mentioned this a while back, but this is why I’ve been on a ketogenic diet (very low carb, high fat, moderate protein) for the last 9 years. In fact, about 6 months ago I changed to a carnivore diet (zero carb, still ketogenic) and the transition (~48hrs) felt like I was coming off heroin! Which just highlights the extremely powerful effect even small amounts of carbs can have on brain biochemistry.
Something to ponder…
If everyone ate a ketogenic diet, my (likely conservative) estimate is that the demand on the NHS would be reduced by at least 50% and over a very short period of time (a few months, certainly within a year) as metabolic syndrome would be eliminated from the population, so driving down rates of heart disease, strokes, diabetes, cancer etc. Imagine, for example, a world without obesity… it’s actually much easier to achieve than many people imagine.
Of course, this may seem like it’s O/T from PRD… but if we’re all to enjoy for many years the benefits of PRD’s success (hopefully) then a focus on optimising healthspan and lifespan via low (or zero) carb nutrition is a good place to start IMO.
Live long and prosper... :-)
Cheers
BRV
Thanks to all for your input.
A measure of sanity has returned and my small CEG holding has now gone. And with the funds, I’ve added a few more PRD – which was really the obvious choice all along, of course…!
One of Charlie Munger’s mantras is to ‘avoid standard stupidities’…. for some reason I seem incapable of actually sticking to this! At least, on this occasion, my mistake wasn’t very costly.
Charlie also recommends ‘rubbing your nose in your mistakes’… and I certainly give myself plenty of opportunities to do just that! One of these days, I’ll actually learn from them… ;-)
Seriously, thanks all for knocking some sense into me…
And GRH, in particular, thanks for taking the time to post yesterday and to highlight the error of my ways, much appreciated.
ATB
BRV
Just been perusing the satellite images, and there's a new addition (small dark square) just south of the area that Keith highlighted the other day that could be the drill pad. It's about 2.5km west (and down a bit) from the MOU-2 location, and about 700m north of the highway, and is a clear change between the images of 8th and 13th April.
Considering we're expecting construction to have started by now and the distance from MOU-2 is about right, I think Keith was right that this looks like the spot for MOU-3.
It's fairly clear to see when the scale is either 300m or 500m.
https://apps.sentinel-hub.com/sentinel-playground/?source=S2&lat=34.32139680116137&lng=-3.3988480571861146&zoom=16&preset=1-NATURAL-COLOR&layers=B01,B02,B03&maxcc=20&gain=1.0&gamma=1.0&time=2022-10-01%7C2023-04-08&atmFilter=&showDates=false
Afternoon GRH
Considering my earlier admission re buying a few shares in CEG, I found your comments of great interest and certainly thought-provoking – thanks (as ever).
I actually posted on the CEG board a few days ago with the concluding comment:
“Fool me once, shame on you. Fool me twice, shame on me.”
Having been a BPC shareholder and lost on the P1 duster (~78% of my stake) I have a nagging feeling that I’m about to be made a fool of twice!
If I was truly making a rational decision I know that I shouldn’t be holding CEG (even if it is, in the grand scheme of things, a very insignificant holding).
Thanks for the wake-up call… I needed it! :-)
Cheers
BRV
Tritoretire, it sounds like we’ve both gone ‘all in’ on PRD! I’m like you, I can’t find a stock that has a better risk/reward profile than Predator.
Saying that, I’ve mentioned before that I manage my Dad’s SIPP and I run that as a ‘focused’ portfolio, currently holding six stocks. This is also ‘overweight’ in PRD (~50% - increased after our nice little run up over the past couple of weeks or so) but the other holdings are still relatively meaningful. (Though I’m slightly embarrassed to admit that I’ve been building a position in CEG mainly due to the Uruguay assets which look interesting but, due to management’s somewhat dubious track record (with BPC), this is a small % of the overall portfolio only. So, in reality, the SIPP is only 5 stocks… and a small ‘punt’ on CEG.)
I mentioned Robert Hagstrom’s books the other day and “Warren Buffett - Inside the Ultimate Money Mind” contains an excellent discussion on Buffett’s views on modern portfolio theory, specifically in relation to risk, diversification, and efficient market hypothesis. In essence, Buffet dislikes diversification and espouses focused portfolios, and is quoted as saying:
“Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”
Now, I’ll admit that I’m not entirely convinced that I actually know what I’m doing! At best, I’m still learning my way around investing (aided, in no small part, by many of the excellent posters on this bb). But holding a focused portfolio (<10 stocks) allows me to ‘know’ each of them to a decent level and to be able to keep properly up to date with newsflow etc. so such a portfolio works for me (hopefully).
BlueGlow, Stiffy, really appreciate your input and info – the decommissioning report makes for interesting reading. It’s good to hear from people in the industry who have experience with such things and what you say is reassuring with regard to Mag Mell.
As Nico says, things in Ireland appear to be moving in the right direction, hopefully pragmatism will prevail.
Thanks again
BRV
Jimmy, Nico, thanks.
It had briefly crossed my mind that the giant Atlantic waves may make it tricky for a FSRU and why, therefore, the more benign Celtic Sea is currently the preferred option. But maybe LNG imports could occur in the calmer summer months only and be stored in the Corrib South reservoirs for use in the winter?
Hopefully it won’t come to that and common sense will prevail. (Sorry, I realise ‘common sense’ doesn’t often come into it when we’re talking about politicians!) Retaining the Kinsale pipeline and having MM in the Celtic Sea sounds like the best solution for all parties, but it’d be nice to have some alternative options just in case Eamon gets excited about decommissioning an old pipeline that I suspect no one else really cares about.
Madmaxium,
As mentioned, I’m all for balanced discussion (i.e. pros AND cons) but JohnBriggs' posts are solely negative (for every stock he posts on) and often excessively so, and are therefore, in my view, of no value, hence I’m ‘glad’ he’s now on filter.
I never take a position in any share without also considering (and writing down) the negatives, and neither should anyone. As per my previous post, my concern with CEG is management’s track record (and high salaries) but I’m prepared to give Eytan the benefit of the doubt (for now) mainly due to the quality, and industry interest, of the assets in Uruguay. But also due to the fact that his recent deals in T&T suggest a more pragmatic approach to running the business compared to what happened on P1 where BPC failed to secure a farm-out and so undertook the drill with far too much risk left on the table. Lessons have hopefully been learnt.
So there are positive here, but certainly some negatives, hence why I’ve only taken a very small position and, depending on newsflow, will likely look to de-risk before any drill.
But I don’t need an excessively negative (paid de-ramper?) droning on about potential risks (which I’m already aware of) to help me decide whether I consider an investment to be worthwhile or not. Equally, I’m not concerned about sentiment-driven share price movements – I base my analysis on fundamentals and, should the price drop whilst the fundamentals remain (generally) positive, then I’d consider that a top-up opportunity.
Each to their own of course.
Afternoon all,
After this morning's posts, I’ve been wondering whether the potential decommissioning of the Kinsale pipeline would actually be terminal for our Mag Mell project?
Or, in fact, could the concept of MM be quite easily be transferred to the Corrib South field instead?
Perhaps those on here more au fait with our Irish assets may have some thoughts (and thanks in advance if so).
From the PRD presentation, July 2020: (slides 26-36 for Ireland)
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2020/07/19204714/Corporate-Presentation-29-July-2020_FINAL-DRAFT-1.pdf
See slides 32-34 relating to Corrib South, and slide 34 in particular:
“Corrib South – suitable as a gas storage facility”
• Reservoirs ideal for gas storage
• Valuable asset in terms of commercial discussions with LNG suppliers & gas buyers
• Potential farmin partners are those interested in infrastructure & storing regasified LNG in summer months to increase LNG market share
Of note, many of these features that make Corrib South a candidate for LNG storage are then repeated on slide 36 for Ram Head, suggesting that both licences share similar characteristics making them BOTH suitable for a FSRU facility.
As we know, the MM white paper suggests that Paul was primarily focused on a floating LNG facility in the Celtic Sea. But maybe Corrib South is just as viable an option for LNG and gas storage?
Then, from the RNS of 24/11/22:
“In the context of Ireland's requirement for security of energy supply given the current global energy crisis and the publicity surrounding the Company's Mag Mell Project, there has been renewed industry interest in the Company's application for a successor authorisation for Corrib South.”
So the MM publicity (based around Ram Head) led to Paul opening a data room... for Corrib South (!). This seems a bit counter-intuitive to me… unless the ‘renewed industry interest’ (Vermilion?) considered that the MM concept may also be applicable to Corrib?
Hence my thinking that even if the Kinsale pipeline is ultimately decommissioned it’s feasible that the MM project could still proceed, but simply at a different location?
JohnBriggs,
Constantly negative posters like yourself always give me a good chuckle…
Your always negative posting history says it all and simply confirms that your comments are of zero value - you’re clearly incapable of providing any form of balanced argument (on any stock).
Do you honestly think that Shell, APA and YPF have committed to spending in excess of $230M on their Uruguay offshore work programmes without having done their due diligence on the environmental issues and been given assurances by the government that drilling can go ahead?
No need to reply… you’re filtered.
Regarding the potential for a cash raise, a reminder of Eytan's interview from 2nd March:
https://youtu.be/XxRXk-dqEI0
“DEFINITELY within 12 months we’ll have farmed-out the current area we have, the area OFF-1 and we will be seeing that go forward rapidly towards 3D seismic and other work…” (from 4m 50s)
“We’re in a very good place, we have cash [so] WE DON'T NEED TO RAISE MONEY… we’re very excited about the asset we have in Uruguay…” (from 5m 34s)
[my emphasis]
As for the environmental issue, this paragraph from the report suggests the MPAs will not be a problem. If such concerns were genuinely an issue, then the Uruguay government simply wouldn't be issuing licences, IMO.
"Alicia Torres, an environmental advisor to the National Energy Directorate of the Ministry of Industry, Energy and Mining, told China Dialogue Ocean that the situation need not be a case of either/or. She said oil exploration and the creation of new MPAs “can coexist”, and claimed that the government’s offshore intentions “do not contradict” its policies to promote green energy."
Thanks Keith,
Am now really looking forward – even more so than I was before – to that MOU-NE CPR!
Whatever value Paul assigns to the oil (and I’m sure he already has a figure in mind) dare I suggest that a sp of 8p is looking silly in the extreme…
Cheers
BRV
Hi Keith,
Brilliant posts, thank you as ever.
With such incredible oil potential, but with the likelihood that PRD itself won’t fully explore and develop for oil, I suppose my question would be how much value could you assign to the oil potential in the Guercif licences at this stage?
Or, put more simply, how much would a major / super-major be willing to pay just for the oil potential based on the information available TODAY?
(And soon to be more formally defined by the upcoming MOU-NE CPR.)
Going back to thinking about the downside risk in PRD, could there be an argument that much (or at least a significant part) of the company’s current Mcap would be covered simply by the value of this very significant oil potential in Morocco?
Also, we know that the EIA has been granted for a well at the MOU-NE location (from 12/5/22 RNS). So, prior to selling on and even without any 3D, might Paul still fancy sticking a hole in MOU-NE considering it’s only around $3M to do so? (I understand the current rig is capable of drilling to the required depth at the proposed location.) Should that well alone come in and prove oil, and so de-risk the other oil prospects, what then might be the value of the licence? (The mind boggles...)
I appreciate that this is all a bit speculative but I’m intrigued to learn how Paul will play his hand with regards to the oil potential and how it might be currently valued, particularly as in the Feb IMC presentation he talked about not leaving too much value on the table before any asset sale.
Cheers
BRV
We know AA is always looking to add assets via M&A.
But at the current Mcap of £233M...
And EV of around £100-110M...
(based on YE net cash of €129M + Q1 23 additional revenues)
And likely to have significantly reduced, or even eliminated, debt on the balance sheet...
And with the Orion oil field going to concept select phase (net 2P 42mmbbls as a “good place to start from” according to AA in one of his chats with Malcy, which flowed @ 3200b/d)...
And with Benriach currently being drilled, targeting 160Bcf net to KIST (for a minimum post-tax cost on a dry hole basis)...
I suspect other companies might already be looking at KIST as a target at these prices?
I hope not, as I’d prefer to see what AA and his team can do over the medium/long term to add shareholder value. But I wouldn’t rule it out as a possibility.
A few of my thoughts (FWIW)...
As an ex-BPC shareholder (I lost ~78% of my holding value after the P1 duster), I remain extremely sceptical of management (and their high salaries), hence why I currently only have a very small holding in CEG.
But the reasons I have re-taken a position over the past few months are:
There’s clearly lots of interest in Uruguay (for good reason) and Eytan stated that they’ve already has unsolicited offers for farming-out OFF-1.
T&T is currently operating at around break even so it’s no longer a drain on resources. Eytan appears to now have a more pragmatic approach to conducting business, by disposing of non-core assets but with sensible back-in options. Relations with PRD, in particular, now appear to be ‘cordial’ after the Innis-Trinity fallout and I can see decent increases in production rates via a collaboration on CCS EOR.
I’m hoping this more pragmatic approach to deals, learnt from the failures in the Bahamas, will extend to Uruguay (100% WI in OFF-1). So, with regard to farm-outs, I’m hoping for a two-staged process:
> Firstly, a fully-carried deal for 3D seismic, say for 25% of the licence.
> Then a second deal for a fully-carried well and payment of past costs for a well (likely on Lenteja), giving up perhaps another 25-50% of the licence.
So CEG will end up with 25%-50% of OFF-1, and probably relinquish operator-ship to a major, for a fully-carried 3D seismic and drilling programme.
As I say, I’m hoping lessons have been learnt from the Bahamas campaign, principally that management needs to be much more realistic in doing farm-out deals. Eytan’s decent shareholding (~5.7%) suggests he may have more of an ‘owner’s eye’ than previously, though I still think his salary is far too high for a small cap E&P company (hence the accusations of CEG being a ‘lifestyle’ company).
CEG is still a ‘punt’, IMO. But I think CEG did well (or were just lucky?!) to pick up OFF-1 during the pandemic, and the significant industry interest in Uruguay means we should get farm-out deals over the line.
If not, then it’ll be completely my own fault for being duped (again!) and this saying comes to mind:
“Fool me once, shame on you. Fool me twice, shame on me.”
Let’s hope I’m not fooled twice.
I had a quick look at the director shareholdings and options.
Direct share holdings: taken from the 2021 Annual report (published in June 22), p55.
PG 46.9M
LB 0.56M
SS 0.67
RP 2.5 ( though I’m not sure we can count on Ron voting with the board!)
TOTAL 50.63M
Options and Warrants: taken from recent RNS dated 29/3/23
In total, the board (+ ex-directors + advisors) holds 47.6M in options and warrants
(I’m assuming our advisors would vote with board?)
So that’s an effective control from the board of 98.2M shares and options.
However, including options and warrants means that the fully diluted shares in issue will be ~486M.
(by my calcs, including all the shares still owed to Paul).
Meaning the board actually control (only) ~20% of the fully-diluted share issuance.
I’m assuming a hostile take-over would require a 51% controlling stake?
There will be quite a few LT holders (PI’s) unwilling to sell in a hostile situation (myself included) but would we have enough votes to reach 51% and resist a determined buyer?