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I wouldnt expect anything great from Q3 production numbers
Red flags
Strikes in the period
No Tajikistan revenue
Placing to cover costs
For the mine to be profitable , its already been mentioned working 24hrs 7 days a week , I would be cautious that the above suggests nothing to get exexcited about for Q3
Recap on valuation
Sale of assets
WWG $2.8m
Mambare $4.1m
Mt weld $1m (partial)
Total $7.9m
c£6.4m
Crcl mkt cap £6m
Angola
REM
Lithium
All in for free
Add in funding of £10m @ .80p, 100% premium now to current sp
Brazil onshore oil and gas assets underreview
Angola onshoreand offshore assets under review
Current Angola apraisal drilling
The first drill is an appraisal well, of which Corcel has 11.7mmbbls contingent resources
As a current valuation per bbl we are valued at just £0.51 per bbl
£6 mkt cap / 11.7mmbbls = £0.51 per bbl
3 different value creation events on an oil discovery
a) in the ground value $3 per bbl
11.7mmbbls x $3 = $35.1m mkt cap / £28m mkt cap
b) on discovery $6 per bbl
11.7mmbbls x $6 = $70.2m mkt cap / £56m mktcap
c) on successful flowtest $10 per bbl
11.7mmbbl x $10 = $117m mkt cap / £93m mkt cap
The current drill is a well into a proven oil field , the tobias oil field
current estimate is 65mmbbls of recoverable oil remains ,the current recovery factor used is 31%,so suggest the oil in place is around 200mmbbls
There has been 12wells drilled historically, the area of closure is mapped and the 4previous wells that failed were outside the closure
The current drill is drilling through the proven reservoir, which is upto 100m thick
Info on the below link
https://www.corcelplc.com/project/onshore-kwanza-basin/
Once confirmed and as per July presentation, drilling to continue with one or more wells , expectation is for horizontal drilling from this first vertical wellbore.
Horizontal drilling will access more of the reservoir , we know the reservoir is upto 100m thick but the area of closure has been mapped to 3400 acres , so if Google is correct this is an area of 3709m x 3709m
https://www.propertycalcs.com/area/acres/3400
Please review the following link ,item C , increase the length of payzone
https://geology.com/articles/horizontal-drilling/#b
This will ramp up production, multiple times that of vertical well produces
As per timeframes , first oil is a quick turnaround expected in 6- 9months from now
Once into production, we will be cash generating !
No more dilution to shareholders
from the current mkt cap £6m there is huge upside to the forecasted aggressive production numbers , the plan looks to quickly drain the reservoir by production from horizontal drilling...
Item B on the below link
https://geology.com/articles/horizontal-drilling/#b
buying now and holding for a few years ..
multiples in value
Then any other success in Angola especially from KON16 where our share is 300mmbbls ,although this is exploration there was 12m oil found in previous well, so not your wildcat licence area
Current sale of assets covers mktcap
Lots of upside from current £6m mkt cap
AK interview
Translate into English
https://www.expansao.co.ao/grande-entrevista/interior/estamos-a-negociar-a-aquisicao-de-mais-blocos-de-petroleo-e-gas-em-angola-115129.html
If TRP actually get this signed off, they will have to farm down the equity
NPV10 was $305m based on 24.9mmbbls / 100% basis
page 11
$88 per bbl used for 2024
https://www.towerresources.co.uk/wp-content/uploads/2022/07/Thali-Offshore-Cameroon-presentation-29-June-2022.pdf
net equity down to 25% to TRP ?
so $305 / 24.9 x 35.4 x 25%
$109m NPV10
Corcel are currently waiting on appraisal drilling results for 11.7mmbbls net, with further 300mmbbls net upside , their mkt cap is £6m
Sale of assets
WWG $2.8m
Mambare $4.1m
Mt weld $1m (partial)
Total $7.9m
c£6.4m
Crcl mkt cap £6m
Angola
REM
Lithium
All in for free
Add in funding of £10m @ .80p, 100% premium now to current sp
Brazil onshore oil and gas assets next?
Great opportunity now
To clarify my cost estimates are gross not net
to drill 1 well onshore to a TD of just 850m will not cost $10m
ROP should be 150m per day
Reservoir is expected to be 100m thick of the 850m, so you'll have a drilling break and be a lot quicker drilling through the 100m reservoir, in theory 750m of rock to drill at around 150m per day , 5 days , plus downtime for changing casings etc , 10 days total
10 days x $150 = $1.5m plus testing , say ballpark all in $2.5m per well
As per my previous post
$10m might be 3 wells , costs c$3.33m (allowing for a further 30% contingency on the above costs) per well or 4 @ $2.5m per well
Unless of course they are drilling deeper to test underlying salt seal or the flanks and TD isn't 850m , then costs to increase accordingly
GLA
Thanks Nige.
so update potentially next week and currently still drilling, day 37 today for drill to total depth around 850m, which should take 10days allowing for downtime changing casings etc, as PI we are always the last to know but piecing it all together, means possible outcome from vertical drill was positive and could be drilling additional wells now maybe by horizontal drilling now at day 37 days
Remember the investment required was gross $10m ,corcel 18% of this but onshore drilling costs are prob $150k per day so at 10 days is $1.5m per well plus testing , at $10m maybe is for 3 or 4 wells overall to ramp up production for first oil next year
GLA
Https://x.com/CorcelPlc/status/1711358388058099771?t=8yCVF6GkZjTsv2LqBH47Yg&s=35
Angola recap posted today by corcel 1.30pm
Wink wink 😉
Https://youtu.be/FM9EKyQ6UBY?si=8JucddmCpyqITCX_
4mins 50 seconds
CRCL
.80p short term target
Joe that decision is up to you,but if I held 5m at 2.1p average, I would average down based on recent events and future plans
We are on the cusp of a re rate ,
drilling our first well in Angola,results due in October .
The first drill is an appraisal well, of which Corcel has 11.7mmbbls contingent resources
As a current valuation per bbl we are valued at just £0.64 per bbl
£7.5m mkt cap / 11.7mmbbls = £0.64 per bbl
As my previous post, 3 different value creation events on an oil discovery
a) in the ground value $3 per bbl
b) on discovery $6 per bbl
c) on successful flowtest $10 per bbl
The current drill is a well into a proven oil field , the tobias oil field
current estimate is 65mmbbls of recoverable oil remains ,the current recovery factor used is 31%,so suggest the oil in place is around 200mmbbls
There has been 12wells drilled historically, the area of closure is mapped and the 4previous wells that failed were outside the closure
The current drill is drilling through the proven reservoir, which is upto 100m thick
Info on the below link
https://www.corcelplc.com/project/onshore-kwanza-basin/
Once confirmed and as per July presentation, drilling to continue with one or more wells , expectation is for horizontal drilling from this first vertical wellbore.
Horizontal drilling will access more of the reservoir , wekniw the reservoir is upto 100m thick but the area of closure has been mapped to 3400 acres , so if Google is correct this is an area of 3709m x 3709m
https://www.propertycalcs.com/area/acres/3400
Please review the following link ,item C , increase the length of payzone
https://geology.com/articles/horizontal-drilling/#b
This will ramp up production, multiple times that of vertical well produces
Asper timeframes , first oil is a quick turnaround expected in 6- 9months from now
Once into production, we will be cash generating !
No more dilution to shareholders
from the current mkt cap £7.5m there is huge upside to the forecasted aggressive production numbers , the plan looks to quickly drain the reservoir by production from horizontal drilling...
Item B on the below link
https://geology.com/articles/horizontal-drilling/#b
buying now and holding for a few years ..
multiples in value
Then any other success in Angola especially from KON16 where our share is 300mmbbls ,although this is exploration there was 12m oil found in previous well, so not to your wildcat licence area
On top of Angola we also await news on Brazil, where multiple opportunities have been under review , expected to be oil and gas onshore from historic production fields to quickly drill and get back into production
We also wait news on selling off Mambare should add a few million overtime and prob less of a side show now REM & Lithium
The future looks exciting
Joe
we are currently drilling 11.7mmbbls net to the company, although they are hoping to increase the oil in place numbers
there is 3 valuations to look at
1) in the ground value, this is used at exploration stage $3 per barrel
11.7mmbbls x $3.7 = $43.29m mkt cap / £35m
currently £7m mkt cap
2) on announcement of discovery
$6 per bbl
11.7mmbbls x $6 = $70.2m mkt cap / £56m
currently £7m mkt cap
3) successflow flow test
$10 per bbl
11.7mmbbl x $10 = $117m mkt cap / £93m mkt cap
currently £7m
now we are drilling into a historic oil field, so its not exploration ... more appraisal well
TD est around 850m, thats where the OWC is.
based on the timelines to date, one can speculate the well is being drilled and tested before any news (shouldnt take very long to drill to 850m onshore)
We are not the operator so our hands are tied, but maybe an update next week
according to CRCL website, results in October from this initial well
https://www.corcelplc.com/project/onshore-kwanza-basin/
Also July presentation, timeline suggest drilling through to year end, we know there are further wells planned, probably horizontal drilling, to ramp up production again referring to timeline, first oil Q2 next year
https://www.corcelplc.com/wp-content/uploads/2023/07/20230706_CRCL_PPT_FIN.pdf
In Angola alone, we have c315mmbbls net resources to explore
that's before we here on Brazil, lots of opportunities under review