Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
You are not up to date re the Sinopec connection.
Oryx is now owned & run by Barzani's dear friend Baz and his "privately owned" Zeg vehicle.
Amid all the corruption- and self-enrichment stories that generally get posted, it's good to remember that most Iraqis are just like us - trying to get on with their lives, educate their children and live long enough to put their feet up at the end of the day.
As the cradle of civilisation, the Land of the Two Rivers has a rich culture stretching back thousands of years and its good to see that, amid the poverty and challenges facing ordinary folk, an appreciation of that cultural history is being offered with this film festival - which is free and online each evening at 18:30 UK.
https://iiffestival.com/programme/
Economic meltdown threatens Europe’s war on plastic waste
https://www.arabnews.com/node/1716251/business-economy
Lower oil prices mean lower virgin plastic prices — and that spells trouble for the recycling industry
OUREM, Portugal: Giving a new life to plastic trash gets Carlos Bento out of bed every morning. But the coronavirus pandemic has seen revenues drop up to 40 percent at Micronipol, the large recycling facility he runs in central Portugal, and it faces an uncertain future.
Micronipol produces recycled polyethylene, the base for plastic bags and bottles. The product is piling up at its warehouses as clients, facing their own economic struggles, shelve their recycling goals. They are opting for cheaper alternatives: non-recycled plastics made from hydrocarbons.
As lockdowns were put in place worldwide, a drop in demand for oil pushed prices to historic lows, making virgin plastics — already becoming cheaper than the recycled equivalent — even more affordable.
“If we are no longer competitive and if we lose cash we have two options: Either someone has to subsidise us so we can keep working or we have to shut down,” said Bento, as he stood near a pile of colorful recycled plastic bales.
Lower virgin plastic prices could spell disaster for the future of European recyclers like Micronipol.
In Europe, virgin polyethylene terephthalate (PET) was over 7 percent, or €60 ($71) per ton, cheaper than the recycled equivalent last month, data from S&P Global Platts showed.
Industry group Plastic Recyclers Europe said firms in most EU member states have signalled their recycling facilities have reduced their operations or closed their lines for at least a few months.
“Without well-functioning and profitable plastics recycling there is no alternative, no environmentally sound option for plastic waste management,” said Antonino Furfari, the group’s managing director. “This waste will be incinerated or dumped.”
Piotr Barczak, senior policy officer for waste at the European Environment Bureau, called for a tax on all virgin plastics to eliminate the price gap.
The impact of the pandemic on recyclers is especially concerning at a time when consumption of plastics is expected to double to 600 million tons per year in the coming two decades, according to a report by Zero Waste Europe NGO. And as countries struggle to cope with the economic impact of the health crisis, fears abound...that environmental policies are being left behind.
HIGHLIGHTS
? Virgin plastic cheaper than recycled alternative.
? European plastic recyclers struggling to stay afloat.
? Taxing virgin plastic could help industry survive.
EU Environment Commissioner Virginijus Sinkevicius told Reuters in a written interview that while the Commission had received relatively few requests for extensions or exemptions from EU environmental rules due to the pandemic, the crisis had a “significant impact” on ...
(Continues...)
As they say, One Man's Meat is another Man's Po
There are several reasons why an updated CPR could be delayed.
One of them could be a downward revision of the Gross Field Reserves (1P/2P/3P) and the Contingent Resources (1C/2C/3C), both oil and gas.
Another could be a revised Field Development Plant incorporating revisions which would place the current business model under significant financial stress.
There are several more reasons...that you will not see.
ShaMaran Atrush June Oil Sales Payment Received
July 27, 2020
VANCOUVER, BC, July 27, 2020 /CNW/ - ShaMaran Petroleum Corp. (“ShaMaran” or the “Company”) (TSXV: SNM) (Nasdaq First North: SNM) provides the following update to stakeholders.
The Company confirms that a payment of $12.5 million ($4.5 million net to the Company) has been received from the Kurdistan Regional Government for Atrush crude oil sales during June 2020.
Slurryman / highlander
what I have posted has all been taken from the company publications.
It has nothing to do with obsessions - the posting was in response to your rubbish, which, if I understood it correctly, seemed to be saying that the company has always complied with its listing obligations (i.e. to inform shareholders as to events).
The plain fact remains that shareholders were kept in the dark for 2 years. For another 4Bn bbl of oil, the well could / should have been re-entered, re-completed to avoid the "water issues" that were encountered.
Why was that not done?
1,100 barrels of water per day says a lot.
Broker analysts use "data" given to them (to shareholders, to the general market) by the company.
If that "data" is in any way suspect then the broker's opinion, or analysis, is pretty well worthless until clarity / data integrity has been re-established.
In fact, we heard nothing about SH-6 until the ERCE CPR was published on 13th March-2014, when the following was reported:
“…The log and core data from Well Shaikan-6 indicate an OWC in the matrix at 1,975 mTVDSS. Cores above this depth show high saturations of oil and oozing of of oil upon release of pressure at surface. We have consequently used a depth of 1,975 mTVDSS for the OWC in the matrix for the low, best and high cases.
..
The OWC in the fractures (i.e. the contact between free water and the highly viscous oil in the fractures) has been estimated at 1,450 mTVDSS for the low, best and high cases. This is constrained by the results of Well Shaikan-6 DST-5A, which flowed water at a rate of 1,100 bbl/d with small amounts of heavy oil from the Sargelu formation that was perforated from 1,471 to 1,491 mTVDSS, suggesting a WUT at 1,471 mTVDSS.
Oil has been tested down to a depth estimated to be somewhere between 1,350 and 1,400 mTVDSS in the Jurassic, but no oil has been recovered in a successful flow test from the Jurassic below this. The deepest test that flowed oil at good rates from the Jurassic is DST-8 in well Shaikan-2, which was perforated in the Butmah from 1,329 to 1,345 mTVDSS and flowed 723 stb/d of oil and 38 bbl/d of water. The shallowest depth at which the transition from medium to high viscosity occurs has therefore been assumed to be 5m below this depth, at approximately 1,350 mTVDSS. We have used 1,350 mTVDSS for bot the low and best cases.”
Needless to say, the SP reflected the decrease in oil-bearing volumetrics and the price tanked immediately from 144p to 103p.
IN A NUTSHELL, IT TOOK 27 MONTHS FROM SPUDDING OF SH-6 FOR SHAREHOLDERS TO BE TOLD THERE WERE WATER ISSUES – SUCH SEVERE WATER ISSUES THAT THE EFFECTIVE OIP NUMBERS HAD TO BE REDUCED BY OVER 4BN BBL.
The scenario depicted by GKP in 2010/2011 where the OWC in the fractures was estimated to be 2,230m TVDSS was effectively destroyed by the Mar-2014 CPR.
Although the water production was known, nothing was issued to the market – despite the fact that AIM guidelines explicitly stated that all fluids produced on exploration wells must be stated.
The reason ultimately given by GKP was that water production was due to communication behind pipe with intervals below the deeper matrix OWC.
A plain case of disagreement between the operator and the consulting body charged with evaluation the results.
In view of the extremely negative implications for OIP volumes, it would have been sensible to quickly drill a new directional well from the same pad or a completely new well a few hundred metres away – nothing was done then and nothing has been done in the last 8 years either.
Draw your own conclusions about who exactly is telling the truth here.
Shaikan-6 well was spudded on 16th Dec 2011 (AR-2011, P5) with a targeted TD of 3,800m
On 30th Apr-2012, an RNS was issued that stated: “Shaikan-6 has recorded the deepest oil shows so far as indicated by both logs and core samples obtained by the Company. These oil shows have been recorded below the Company's originally prognosed Jurassic oil/water contact level for the Shaikan structure. Shaikan-6 has cored oil 150 metres below what we previously assumed to be Jurassic oil/water contact level for Shaikan. Both Shaikan-5 and Shaikan-6 continue to appraise this massive structure down the flanks and we plan to test and evaluate its deeper oil potential.”
(It should be noted that GKP did not clarify the depth for “…what we previously assumed to be Jurassic oil/water contact”, but previous presentations proudly featured pressure vs depth plots indicating a FWL of 2,230 mTVDSS – therefore leading many investors, and brokers, to conclude that SH-6 had encountered oil at a depth of approx. 2,230+150 = 2,380 mTVDSS.)
On 22nd June 2012, the 2011 Annual Report was issued, and the estimated TD date was shown as May-2012 (AR-2011, P5).
The May-2012 Investor Presentation indicated a SH-6 completion date as Q3-2012 (P11)
The 12th Sept-2012 Half-Year Report showed SH-6 as having been completed (map P6 and remarks re testing thereof P8).
The 3rd Dec-2012 Erbil Presentation again showed SH-6 as having been completed (map P6) but again showed TD as May-2012. The graphic on P9 showed SH-6 being connected as a producer to PF-2.
The 22nd March-2013 Natural Resources Forum again showed SH-6 as having been completed (map P7) and again stated that “no OWC seen” (P9).
The Shaikan Development overview, however, shown on P11, indicated that SH-6 would no longer be connected to PF-2; no clarifying information regarding this was given.
The 2012 Annual Results published 20th June-2013 gave the following hint that all was not well (P3) with this well:
“While solid results obtained with Shaikan-5 confirmed the extremely prolific nature of the Jurassic interval of the structure, we decided to suspend Shaikan-6, which may require a re-test, while we evaluate results obtained with this well in more detail.”
This indicates that May-2012 date was indeed the completion date.
The 4th July 2013 Investor Day seemed to confirm that SH-6 was a bad one. The spudding was again shown as Dec-2011 (P14) but there was no mention at all of the well TD on the 2012 overview (P15). No further comments whatsoever were made about SH-6.
The 2013 Half Year Report published on 19th September 2013 made no mention whatsoever about SH-6 – it had been completely airbrushed away.
In fact, we heard nothing about SH-6 until the ERCE CPR was published on 13th March-2014, when the following was reported:
You mean like the drilling results for Shaikan-6 well?
Lots of water...
Enormous reduction in claimed oil-bearing formation volumes...
Much shallower OWC depth than had been widely claimed...
Laugh out loud.
Good morning CCC - or Cookie as I sometimes called you when responding...
We don't always see eye to eye on GKP matters but I've always respected your views and your desire to more fully understand just what's going on.
I believe I know what has caused your (generally positive) views to alter but, as you can see from the current spat, the true frauds and spinners of lies are very keen to ascribe to others what they themselves practice on a daily basis.
Warped minds indeed...
Today 09:05
" Ferrier has been paid more yet the city says nothing"
What utter nonsense you spout!
CCC,
you are correct IMO.
April-20 was a terrible month for crude (Av f month $18.38/bbl), and payment was Zero – but the PSC terms indicate that it should have been approx. -$741,000. Since pipeline fees, quality discounts, etc have to be honoured, this “minus” will have to be carried forward.
May was somewhat better (Av f month $29.38/bbl), and the PSC terms indicate a payment due of approx. $2.57M – but only $2.1M was received; a shortfall of approx. $470,000.
June was better (Av f month say $40.2/bbl?), and the PSC terms indicate a payment due of approx. $7.85M.
If, as seems likely, the MNR and GKP agreed an adjustment over say the next 3 months, then perhaps we can expect the June payment to be approx: $7.85M - $0.741M + $0.47M
or approx. $7.6M?
I have to make an apology...
In my post yesterday, in which I laid out the Investor Cash Consumed over the years, I omitted to include the $250M Bond Issue of 17th April 2014.
This was actually recognized in the 2014 Accounts $217,952,000 - as the $22M Warrants which were issued were also treated by the Co as part of the issue costs.
The correct total of incoming funds therefore increases and is now approx. $1,593,688,000
The Oil Sales Revenues remain at approx. $1,002,745,000.
So total monies consumed during the period were approx. $2.6Bn.
Pay no attention to those on the chat boards that keep repeating the mantra “it’s all about the barrels” and be warned of those pushing the message that “SH has a column of oil 950m thick”.
A perusal of the SH Block Stratigraphic Images will show that it’s less like a rectangular layer cake and more like a series of interconnected humps or -domes. It might well be 950m at the thickest part but it’s certainly not a nice, slab-like 280km² of oil-bearing formations 950m thick.
15 Years on, $2.37Bn cash consumed so far – and $50M given back as a little “thank You”.
The company has just been a well-stocked feeding trough for mediocre managers, entrusted with shareholder funds. That might soon be brought to an end.
There is some bad news heading this way, and smaller retail investors should be careful about letting their enthusiasm run away with them.
Qualifications:
I have not bothered to include all of the “Warrants Exercised” sums received, nor have I bothered to include all of the “Bank Interest” received, and there are various other small “incoming” sums that I have omitted: in the greater scheme of things these are miniscule and do not change the overall picture.
If I have omitted any significant items I’ll gladly review and amend.
GKP was admitted to AIM on 8th Sept-2004, having raised $107,880,000 in the process (the 2004 Accounts also show what money the original partners / founders brought into the business).
Checking thru the Annual Results from 2004 onwards, the total amount of money that various investors have put into GKP can readily be found.
Over the years there have been many share issues, and a couple of major bond issues, to fund operations, and we should take a moment to consider the total historical funding picture.
The total investor funds raised from 2004 to the present are approx. $1,375,736,000.
In addition, of course, we also have Oil Sales Revenues that were earned – and consumed – in normal operations. Total Oil Sales Revenues for the same period were approx. $1,002,745,000.
In total, therefore, we can see that from Sept-2004 thru June-2020, GKP had incoming funds totalling approx. $2,378,481,000.
After 15.5 years that figure should give “loyal and long-term holders” quite some pause for thought.
The current cash holdings are approx. $142M ($5M coupon will be paid on 25th July and, assuming June’s sales are paid by then, that sum should be down to ca $139M by month’s end.
$73M or so is still owed for Nov-19 thru Feb-20 sales.
We also know that currently invested, but still-to-be returned Capex (to be paid over many, many years in accordance with the PSC Cost Oil terms), is somewhere in the region of $400 - $450M.
A Dividend of $49.1M has been paid and some shares have been repurchased, at a cost of $50M (money down the drain IMO).
Current bond debt is ca $100M (repayment is due latest 25th July 2023) with a further $200M being available (rate static, but issue price to be determined) as and when required.
So, summa sumarrum, what sort of picture does this paint?
Yes, of course on the positive side the company has a licence to exploit a heavy oil discovery with X barrels, proven and projected, and the licence still has N years to run.
But, all that money has been spent and the field output is still a tad less than 40,000bopd. The two production facilities are not getting any younger, and further substantial sums will need spending on these and on the older wells.
Major, unresolved issues remain to be dealt with – in the next couple of years mainly Gas Production, Sour Gas Disposal & Water Production, and these will cost a LOT more money. Don’t forget also that any future FDP that is written to include the Triassic will need well-filled pockets – and very competent drilling- and subsurface management teams.
So, let us be honest about it all: GKP management has not proven to be the best.
The shares have not been good for LTHs – but they have been particularly good, and continue to be good, for those who trade on the naive optimism of smaller, retail holders. Here I include those Institutions, who trade the pants of it within the notification limits but who are portrayed by some as wiser and more constant “good g
polarityMan,
- the KRI oilfields are Landlocked
- the SH wells are approx 1,000km from the Export Docks (Ceyhan)
- the main Export Pipeline (Faysh-Khabur - Ceyhan) is owned by another party (Turkish company BOTAS) and fees are charged
- the main Export Pipeline is subject to a Sovereign Agreement between Turkey and Iraq - strictly speaking the KRI should not be using this pipeline, and should not be managing the monies gained by utilising it; these should be managed by the appropriate Iraq Ministry (MOO, SOCO, NOCO, etc). This is a major bone of contention between KRI and the Centre.
- the secondary pipeline (SH - Kurdish Pipeline) is owned by another party and fees are charged
- the third pipeline (Kurdish Pipeline from Khurmala - Faysh-Khabur) is owned by another party and fees are charged
- the quality of SH crude is lower than that of Brent (much higher %S, more viscous) so $/bbl price is much lower
- the Forward Financing deals set up with some major crude trading houses by the KRG-MNR involves yet another discount (to take into account of the fact that the KRG , strictly speaking, is not authorised to sell Iraq oil. Think Distressed Seller!).
- the fees currently being charged by BOTAS for use of the Faysh-Khabur - Ceyhan pipeline are regulated and the document is in the public domain; these $/bbl fees are not very high and there are some who ascertain that the ruling Barzani group are profiting too from inflating these.
Of course it's not a level playing field. When the outlook for crude was $100 or more, all of these issues were put to one side as the expected revenues "made beasts of us all".
At $40 Brent there would be no-one queuing up to develop oilfields in the Kurdish Semi-Autonomous Region of Iraq.
Everywhere you look there is a complete lack of transparency.
Caveat Emptor
...now being transferred to a "privately-owned, Kurdistan company" - Zeg Oil & Gas.
LOL
The current discount applied to Atrush crude (quality, pipeline fees, storage at Ceyhan, loading and presumably insurance too) is $15.43/bbl.
For Shaikan crude it is $21/bbl.
DNO said a few words more, including:
"In Kurdistan, DNO has reduced the number of rigs deployed in drilling, testing and workovers from five in 2019 and early 2020 to two; THESE TWO RIGS ARE BELIEVED TO BE THE ONLY ONES CURRENTLY ACTIVE IN KURDISTAN, down from an overall count approaching 20 last summer."
(CAPS are mine)
The translation is misleading: : only the principles behind the proposals have been agreed.
Neither the detail nor the scope have yet been agreed.