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Fantastic. Company-maker!!!
Oil is falling and who can predict the oil price? Truth is... The big oil players are still on the sideline. Still no interest in spending cash on finding new fields. The industry are protecting capital. No interest from western politicians in facilitating a predictable future for the industry. Windfall tax? Offshore windmills? Jeeze... It's an energy crisis.
"Oil & gas discoveries in 2021 to hit lowest level in 75 years" according to Rystad energy.
We have not seen the big sector rotation yet. Maybe will never will? People are stilling buying the dip and chasing the P/E 50+ companies.
Bottom line. We just recieved the February payment of $44 mill when Brent was $97 dollars.
March: avg. $117
April: avg. $104
May: avg. $110
Today: $113
We're in a good spot.
Q1 results this week? May 26th last year. Some updates on the wells I guess!
Results must very close now. With Henry Hub at current price, SOUC mcap, development wells... Things are lining up nicely!
Henry Hub now $7.22......
Henry Hub has now crossed US$6. Great stuff!!!
So, you assume no updates until late April?
I'm not too familiar with US plays, but done some research on earlier Selma Chalk drills. Ranger Oil did a lot of them in the late 2000's. Looks like they had 95%> success on the horizontals they did.
Henry Hub is working with us.
Sentiment is looking really favourable for the whole sector. Just need a few more days until we get the Royston numbers. If this turn out the way we believe and the way it's communicated... With 50 - 100 mill bbls that can be lifted with (hopefully) cheap onshore wells that can be drilled "tomorrow". At some point in the near future we can be looking at a total of 100-150 mill bbl/boe 2p reserve that can get lifted at a low price. At this MCAP in a "safe" jurisdiction.
Cascadura-1 was 45 mboe 2p reserves. We must be looking at a total of 60-70+ mboe from Cascadura after Deep. And we have not reached the bottom......
And then Royston.
We will get some insight March 14. Fingers crossed!
TXP has a"high" MCAP compared to peers when it comes to oil production. TXP is producing ~1700 bbls of oil. TXP is priced on future income from a giant gas field (Cascadura) and sone fantastic oil prospects. A lot of drilling to do at Royston and they need to prove the production/cashflow numbers.
On a 2p reserves basis TXP is extremely cheap and probably even cheaper during March with massive updates.
Looking back. They got a "terrible" deal on the gas price with the NGC. Henry Hub is now 4.50-ish for a MCF. Europe is 20+. Going to be worse with sanctions on Russia and their crazy leader. But, downside protected and pipeline on NGC. That's something.
In 2018 with oil @ $80 they had netback (after royalties and operating costs) @ $37 dollar. We must be looking at $40+ now and $ 2 mill a month in revenues with 1700 bopd production.
End of 2022 with 90000 mcf production for Cascadura = $ 60 mill (free) cashflow. After 12.5% royalties and 30% corporate tax. $30 dollar netback on the condensates and $2 per mcf.
Then, why this is a good investment in my opinion:
Full field development at Cascadura - another 2-4 wells. Capex of $20 mill(?). This field will produce for decades with minimal OPEX and CAPEX after the field is developed. Look at the central block after 20 years. Still producing at good rates.
At peak production Cascadura will generate (free) cashflow of $120 mill @ 180000 mcf and 5000 barrels of condensates.
If they stop drilling new wells. Just operating Cascadura. At peak production and a dividend payout ratio of 50%. We're looking at a 25% dividend from todays mcap.
This is the "Wall of cash".
Probably known to some here, but just underpins the ridiculous valuation here.
BHPs (68%) Ruby field offshore Trinidad with 2C resources of 13 mill bbl of oil and 274 bcf of natural gas. Peak production of 80 mmscf and 16000 barrels of oil.
They signed a deal with NGC in 2020. Probably same terms as TXP+/-?
Total investment for the project is US$ 500 mill. To get it started..... They discovered the field in 2006. Started up in 2021.
CAS-1 with 400 bcf as a best estimate.
Total investment before a fart of gas from Ruby is twice TXP's market cap. GLJ has estimated the Cascadura area to be "in excess of 500 bcf" -> could be twice as big as Ruby gas. The oil/condensate at Cas-1 is estimated to be 10 mmbls 3p reserves.
This is simplified, but still. Says something.