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Any idea why?
"CEG shares are up very modestly on this deal, done at a 20% premium as I said but if ever there was a ten-bagger staring you in the face then this is it, ignore taking shares at 0.14p at your peril, it could well be a eureka moment right in front of your very eyes…"
https://www.malcysblog.com/2024/04/oil-price-challenger-petrofac-i3-and-finally/
Should we be worried about this?
Just listening to Malky’s blog interview with a CEG.
Interesting bit for me was that, in terms of Off-3, he says they're going to do the same process as they did for Off-1 one, in terms of reprocessing the seismic etc. which could take another year. But he also something like: “but who is to say someone might just swoop in and make us an offer for Off-3 pre-seismic reprocessing. There is a lot of FOMO out there in oil companies who missed out on Uruguay”.
Fingers crossed!
CEG's potential reserves in Uraquay are so great - will they attract a soverign wealth fund (even wealthy individuals) to invest?
Here are a few instances of sovereign wealth funds investing in oil companies with unproven reserves:
Abu Dhabi Investment Authority (ADIA) and Encino Acquisition Partners: In 2018, the Abu Dhabi Investment Authority (ADIA) announced a significant investment in Encino Acquisition Partners, a U.S.-based oil and gas company. Encino focused on acquiring and developing oil and gas properties, including those with potential reserves that were yet to be fully proven.
China Investment Corporation (CIC) and Energy Exploration & Exploitation: In 2017, China Investment Corporation (CIC) acquired a 45% stake in Energy Exploration & Exploitation (E2), an Australian company engaged in oil and gas exploration. E2 focused on developing assets with significant resource potential, including those with unproven reserves.
GIC Private Limited and Sanchez Energy Corporation: In 2014, GIC Private Limited, Singapore's sovereign wealth fund, invested in Sanchez Energy Corporation, a U.S.-based oil and gas company. Sanchez Energy focused on the exploration and development of unconventional oil resources, which often involve unproven reserves
Trying to get an actual share value given the size of the prospects as detailed in the March presentation.
I have calculated the total value of the oil in the ground to be worth $45.6 billion.
Obviously we cannot get it all out of the ground in a year - lets assume it will take 20 years to extract all of the oil.
Now, we'll calculate the annual extraction rate:
Total oil in the ground = $45.6 billion
Years to extract = 20
Annual extraction = Total oil / Years to extract
= $45.6 billion / 20
= $2.28 billion per year
Next, we divide the annual extraction by the number of shares to find the value per share:
Number of shares = 10,000,000,000
Value per share = Annual extraction / Number of shares
= $2.28 billion / 10,000,000,000
= $0.228 per share
= £0.18 per share
So combined with CEGs estimate of 0.59p per share
Share value should be 0.77p
Lets assume PE ration of 10 - then share price, once production gets going = 7.7p
Any thoughts?
Hiere's an updated calculation of what share price could be if they get the same terms for Area Off-3 as they did for Area Off-1:
Area Off-1
Prospect Teru Teru Gross resource estimate: P10/50/90 1,647/547/158
Propect Anapero Gross resource estimate: P10/50/90 1,627/445/88
Propect Lenteia Gross resource estimate: P10/50/90 1,666/198/17
Gross Total P50 = 1,190 million barrels = $95 billion
AREA OFF-3 bloc
Prospect Amalia, comes with a gross resource estimate: P10/50/90 (ANCAP) of 2,189, 980, and 392 - 25% of this prospect in in Area Off-3
Prospect Morpheus entails a gross resource estimate: P10/50/90 (ANCAP) of 8.96, 2.69, and 0.84, respectively. This prospect is entirely contained with AREA OFF-3.
Gross Total P50 = Amalia (at 25%) 245 + Morpheus 2.69 = 247.69 million barrels = $19 billion
Two Block Overall Total = $114 billion
Apply 40% share of profits = $45.6 billion
Value per share = $4.56 = £3.58
Https://cegplc.com/wp-content/uploads/2024/03/CEG-Uruguay-Deck-March-2024-FINAL60.pdf
Hi bilbobagholder,
Buy that do you mean the MMs have a large order to fill?
Hiere's an updated calculation of what share price could be if they get the same terms for Area Off-3 as they did for Area Off-1:
Area Off-1
Prospect Teru Teru Gross resource estimate: P10/50/90 1,647/547/158
Propect Anapero Gross resource estimate: P10/50/90 1,627/445/88
Propect Lenteia Gross resource estimate: P10/50/90 1,666/198/17
Gross Total P50 = 1,190 million barrels = $95 billion
AREA OFF-3 bloc
Prospect Amalia, comes with a gross resource estimate: P10/50/90 (ANCAP) of 2,189, 980, and 392 - 25% of this prospect in in Area Off-3
Prospect Morpheus entails a gross resource estimate: P10/50/90 (ANCAP) of 8.96, 2.69, and 0.84, respectively. This prospect is entirely contained with AREA OFF-3.
Gross Total P50 = Amalia (at 25%) 245 + Morpheus 2.69 = 247.69 million barrels = $19 billion
Two Block Overall Total = $114 billion
Apply 40% share of profits = $45.6 billion
Value per share = $4.56 = £3.58
Or 1,790 times the current share value...
Not quite better than Bitcoin, but not bad!
As a poster on another board has observed, the 'free carry' of 40% that Chevron has given to CEG is (possiblly) unprecedented. I was expecting 10 to 20%. This shows that they were desparate to get it.
Which also suggests we should be expecting some similar news for OFF-Area3 where we have (P50 estimates, which are mid-range, most realistic estimate) another 500,000,000 barrels of oil :
AREA OFF-3 bloc
Amalia, comes with a gross resource estimate: P10/50/90 (ANCAP) of 2,189, 980, and 392 - 25% of this prospect in in Area Off-3
Morpheus entails a gross resource estimate: P10/50/90 (ANCAP) of 8.96, 2.69, and 0.84, respectively. This prospect is entirely contained with AREA OFF-3.
Total P50 = Amalia (at 25%) 245 + Morpheus 2.69 = 247.69 million barrels = $19 billion x 40% = $7.6 BILLION!
Incredible furture share price potential for anyone who loads up in the next few days!
From the RNS:
Chevron will acquire a 60% participating interest in the AREA OFF-1 block, and will assume operatorship of the block.
CEG Uruguay will retain a 40% non-operating interest in the block.
All estimates below are EUR mmbbl, gross (millions of barrels)
Using the P50 estimate in my figures as this represents the best estimate or the most likely scenario for the amount of recoverable oil or gas.
Current price of oil is $80 per barrel
Area Off-1
Prospect Teru Teru Gross resource estimate: P10/50/90 1,647/547/158
Propect Anapero Gross resource estimate: P10/50/90 1,627/445/88
Propect Lenteia Gross resource estimate: P10/50/90 1,666/198/17
Total P50 = 1,190 million barrels = $95 billion
40% of $95 billion = $38 billion
So each share = $3.8 or £3
Yes, you read that right - each CEG share has a potential value of £3!!!
I am guessing it was a buy
35,000,000 in last hour or so...
Https://ukinvestormagazine.co.uk/3-ftse-aim-oil-shares-to-watch-in-q3-2023-ceg-boil-angs/
Quite a few buys suddenly coming in - similar to last Friday.
Presumably FOMOs.
Estimates of recoverable resource
Note:
All estimates are EUR mmbbl, gross (millions of barrels)
Using the P50 estimate in my figures as this represents the best estimate or the most likely scenario for the amount of recoverable oil or gas.
Current price of oil is $80 per barrel
Area Off-1
Prospect Teru Teru Gross resource estimate: P10/50/90 1,647/547/158
Propect Anapero Gross resource estimate: P10/50/90 1,627/445/88
Propect Lenteia Gross resource estimate: P10/50/90 1,666/198/17
Total P50 = 1,190 million barrels = $95 billion (had to double-check this figure!)
AREA OFF-3 bloc
Amalia, comes with a gross resource estimate: P10/50/90 (ANCAP) of 2,189, 980, and 392 - 25% of this prospect in in Area Off-3
Morpheus entails a gross resource estimate: P10/50/90 (ANCAP) of 8.96, 2.69, and 0.84, respectively. This prospect is entirely contained with AREA OFF-3.
Total P50 = Amalia (at 25%) 245 + Morpheus 2.69 = 247.69 million barrels = $19 billion
Grand total = $114 billion dollars...
I know that if we got a farm in, we would only receive maybe 10 to 20% of this figure, but that still is in the range $11 to $22 BILLION....
If we go for a mid range figure of $15 billion, that would make the current share price = $1.5 or £1.20...
Note: This assumes all of $15 billon is profit.
Mind blowing figures!!!
Https://www.reuters.com/business/energy/energy-giants-place-tentative-bets-oil-finds-wildcat-uruguay-2023-09-19/
Note this extract:
"Shell, Argentina's YPF (YPFD.BA), and Houston-based APA Corp (APA.O), are among the companies awarded licenses. Ancap estimates the potential oil and gas in place is around 20 billion barrels."
"TotalEnergies and Shell’s 2022 discovery of 11 billion barrels’ worth of oil off the coast of Namibia was a “plot twist” for Uruguay, says Santiago Ferro, energy transition manager at state-owned energy company Ancap. Millions of years ago the two countries were connected, and their basins have similar geological characteristics which increases the likelihood of deposits in the Latin American country."