My take19 Nov 2018 21:31
Looked at the RNS first thing - thoroughly disappointed obviously - and didn’t look at this board or the SP at all, still no idea what it ended up at (& don’t want to, tho’ may have a peak tomorrow) but this is my take - apologies if it repeats what may have been said by others.
- everyone (apart from the shorters/trolls etc.) must be devastated, morale in Sevenoaks must be on the floor.
- we all know, or should know, that O&G is high risk/high reward. For whatever reason this one didn’t work, but, that said, TE-9 was apparently was the least risky of the 3 back-to-back drills announced (a year ago that took a year to commence).
- ignoring the Sidi drill, which was an obligation & proved nothing beyond an large expense for licensing obligations for no other seemingly worthwhile reasons, we’ve unfortunately now had 3 failures in row. It happens.
- got loads of seismic which is presumably OK, what are lessons from the interpretation?
- 30% (?) COS on TE-9 which is “as good as it gets” (BM), which, in fairness, means more chance of the failure.
- what does this say about the seismic interpretation & the modelling of the rest of the area? was it worth all the drilling inactivity?
- I took a pretty laissez faire attitude of JP’s trading plan - now wish i’d done the same - but, with the benefit of hindsight (being then unaware of the lack of drilling activity for months thereafter).
- Was heartened by BM’s quote on the boat in Oct 2017 - I can’t remember the exact words but is was something along the lines of - I hope to be standing here in a year’s time with 6 tcf.
I am still broadly supportive of the Sound management (& obviously personally gutted) but there is one thing that they seemingly need to sort out: the decline in the share price during the drill (ok, markets generally did & oil stocks in particular) suggest that word got out to the select few.
In that regard I am concerned by the timing of last week’s RNS about drilling depth during market hours & I do remember JP saying shareholders will be the last to know in future. Some, including me, bought more on the SP weakness, whilst others seemingly had advance info that the drill was a duster. Seriously unimpressed by that.
Also, and I hate to say this, but, from a PI perspective, when the 2018 accounts come out there had better not be any bonuses/share options given/granted.
I am genuinely sorry for the Sound team about TE-9, & here’s hoping that TE-10 & 11 do the business.
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