Member Info for Exploration

According to reports, JJ Traynor started work at Wintershall Dea in June last year. This is Europe’s biggest privately held energy company. His role is Investor Relations and ESG advisor ahead of the potential IPO - see below. No wonder he lost interest in Morocco. ESG is environmental and social governance.

“Newly created oil and gas group Wintershall DEA plans to hold an initial public offering in the second half of the next year, its chief executive told Reuters, in a deal that could become one of the largest European listings in 2020. Sources said in April that Wintershall DEA had picked the banks to arrange its stock market flotation.
Mario Mehren, the CEO of the company, confirmed the plans.

“We are preparing ourselves for the potential IPO of the company, we want to be IPO-ready by the mid of next year and then if the market’s circumstances are good, in the second half of next year our shareholders would intend to float the company,” he told Reuters on the sidelines of a conference in Russia.

German chemicals group BASF and LetterOne, a vehicle of Russian billionaire Mikhail Fridman which owns DEA, in 2017 agreed on a merger that closed recently.

Jacklevi - that’s right - here’s a link to the deed which states that if Sound Energy South - the collateral - has no assets the charge comes from Sound Energy East - i.e. Tendrara

https://s3.eu-west-2.amazonaws.com/document-api-images-live.ch.gov.uk/docs/fWYaZmPGbk4jiToLLHrL-aivexT8wcHcRhNdYaobBtk/application-pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Credential=ASIAWRGBDBV3BYGI4IWJ%2F20200224%2Feu-west-2%2Fs3%2Faws4_request&X-Amz-Date=20200224T143903Z&X-Amz-Expires=60&X-Amz-Security-Token=IQoJb3JpZ2luX2VjEKv%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCWV1LXdlc3QtMiJIMEYCIQCzFVqBRARxng4Uj8yijSYaoQsatC3NJqvb3AiZUedLbwIhAPGckAbsS74JOSzI5WRKlAlBaLBbFBDeg5K%2FG4clLu5NKrQDCHMQAhoMNDQ5MjI5MDMyODIyIgxsJZ0vqXDubQHNaKcqkQNhlk0Lr5MJOqOpeNci%2BUnKvy8gzxKRxchcSk3zw5MPLWPbEITSyJ84merAdkhcHmMEYdkvnbQa77Gsgb3Tgi1OAVXcEdXQon1jq7qvh8AjwOg51szSAgsQXyrd5NNuNm2K2IOGu%2B43MGIC9uiFh%2B8fbFPGZai4LXIW%2ByRmU1X3bywBXJhc6zQdSSxQcgaZtryg%2F4PztLR0PBNEarhhQLh16UtDAoUtWsbRnODvObZRbrGQ%2Bntz9Zu7tQJZeqh4%2FXhErW%2BC8ngfD66je5rhlq7ycg7nDDYzZw%2BG3m8O5x6Ir4dqMD%2BrVw%2B7uaZjdnZ7GDk%2FYEq0P%2BDfM9tZEa7gTERfM%2B1AAGCKfsx8vXAAnk%2B70NFN3aABCO6mnly3Jn8Yw5VkTCXVcFPr7zdlr7n%2Fo2JALlIbgQb6WgFTV%2BWK8OJdbF039cFNckTodIXdFusl%2F77%2Fn%2FnXx%2BJqwnaG2E63djWKBn%2Fr%2FaQWzQxLipJNakxmIDkX6OkRcWKeYoVF2dJyOEuCZnTGqaB2SNm3ryfqI5qTFzCLzc7yBTrqAZbK9Z2pDruG2jSsVW8L77Gaa4Np2b3euW4sBu%2BvELmL7iGBHiAxkQVi36JVF2gNgTb%2FDb3Sj0g1UlQqVvOhY0nyeU4o3HVjpomx9GzPZYaKmL2aTCg2GRdHBU5VSCRxpBTMjzVcvFBqNvlAyJc9AOXwU9AuK5AMJVdmxD9FMQciMlQLBl7QX%2BKViCO5xVt%2BU%2BSWgxjqQ7%2F6lcUuhyPP3bdC806nCXvdwvQwGcukti2zS3Ua97t1eDiup55F%2FEZ7DvqTYZT%2F2eRlInm2fpRXPn15tsbkrleRy3pDGaZx2YepTpmOJq0qxVGsGQ%3D%3D&X-Amz-SignedHeaders=host&X-Amz-Signature=c93e48e559ee39cc443d853a93d5c9b5a154c5a8791fbb42fa0f6bf57b5bbf9a

Initial period on Sidi Moktar expires August 2020 - so no chance of acquiring new seismic by then.

The whole Tagi play there is very poor - much worse than Tendrara. More than (Dry)50 wells have been drilled on the contract area. Sound did no work - just trotted out figures guesstimated by Lasmo 20 years ago.

Maldini

The geology is fine, but Sound made a complete mess of exploring Tendrara. AGIP and, later Maghreb did a better job before them without all the hullabaloo.

There is a cluster of structures with gas discoveries to the immediate southeast of the TE-5 gas field - within 4 km from TE-5.

TE-1 has GOIP of 620 bcf with resource estimates of 97-312-690 (low-med-high) bcf recoverable.

TE-4 has GOIP of 655 bcf with resource estimates of 92-262-891 bcf

With nearly 1 tcf of gas resources right under their noses - covered by 3D seismic - Sound’s approach never made much sense. They ignored SBK and other nearby, low-risk prospects too, and drilled 8,9 and 10 in areas with no 3D where it was likely the Tagi was a carp reservoir.

Ducati

I think you’re right about formation damage.

TE-5 was discovered by Maghreb (now OGIF) in 2006 at a location defined by 3D seismic. The well was tested in 2008 and subject to a 3 month EWT. There was no pressure depletion in TAGI Formation over a 3m net pay section with porosity of 15% to define cut off. The stabilised rate 1.5 mmscfd. After the test Maghreb reviewed TE-1 and TE-2 and believed both wells might produce gas, although neither they nor Sound followed up.

Although Algeria has a lot of gas, increasing domestic consumption and declining production means their export capacity is a concern + subsidised domestic gas prices aren’t helping. So Morocco must think ahead in terms of energy strategy.

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/10/Algerian-Gas-in-Transition-NG-151.pdf?v=79cba1185463

Using your example; 4000 gallons/day = 0.35 mmscfd

One tanker = 15,000 gallons - so roughly 1 taker every 4 days

No debt because plant is leased.

Gross revenue at wellhead $3150/day or $1.15 million/year

Maldini

You’re right. Depends on coal vs gas price I suppose. But since the LNG thing is ‘scaleable’ why not do both. A 45MW ccgt generator comes on a trailer.

Testpack

I’m sure you’d do a great job truckin.

Simple route - turn left on the N17 and follow signs to Oujda. Then, when you see the enormous heap of mine waste, two chimneys belching out grey smoke, turn right at the mosque and you’re there. Welcome to Jerada - Morocco’s filthiest power plant.

https://www.adgeco.com/new-coal-fired-power-plant-jerada-requires-dh2-5-billion-fractional-construction/

Testpack, Daveyboy

Thanks. The gas is still there, two wells are ready to produce and Wacky Races has prepared the site and access road at TE5, 6 & 7. With sudden departure of 3 directors in 24 hours last November I think PIs May now realise that our Moroccan investors ‘ran them off’ the job (as ddboy would say to lazy roughnecks) after the no-hope offer following years of non-delivery in exploration. I suspect BM was out of the loop.

OGIF has been involved in this for 3 decades and I’m hoping they can succeed in moving the project to a successful and prosperous stage. Proven producing gas reserves with a sales contract, even via LNG, are much more valuable than any other category. MS deserves all our support because it’s the only way to recover our investment.

Maldini

The LNG option is real and comparatively cheap.

The nearest big ONEE power plant is at Jerada - 140km/2 hour drive away. It burns coal imported by rail to a steam turbine and has total capacity of 515 MW, of which 138MW is a new coal plant financed and built by Chinese. The coal arrives at the port of Nador on the Med coast and is shipped 200km by road/rail to Jerada. The Jerada plant is a legacy from the time the area had a big coal-mining industry.

If Sound delivers 10 mmscfd of LNG that would back out 50MW of dirty coal at Jerada and reduce fly ash management etc.

10 mmscfd can be converted to LNG and deliver 125,000 gallons/day of LNG. That’s about 8 road tankers per day.

That’s 1200 MW/day when converted to electricity. Adding gas-burners to to a coal plant is established, cheap technology.

At $200/MWH that’s $240000/day or $90 million/year for the whole value chain.

If the gas producer receives 25%, the micro LNG-plant/truckers gets 25% and ONEE gets 50%, that’s $21 million/yr gross to Sound/Schlumberger/Onhym, pre-tax/pre-royalty.

Pasty

I’m glad you started this thread. I’ve held BP for 20 years and been happy to collect the SCRIP shares to the extent the value has increased to over £200,000. A sort of ‘invest and forget’ strategy. Prompted by your question and other incoming posts I will split this to 50/50, BP/Shell.

I looked at the recent stuff on BP’s website and found it quite difficult to understand who is accountable, what it will cost and when it will be delivered. Fuzzy and vague. For example, in the group below, who is accountable for finding costs, allocation of project investment and so on? No geoscientists in sight.

https://www.bp.com/en/global/corporate/who-we-are/reimagining-energy/reinventing-bp.html

Oil and Gas is quite a simple business and Shell and ExxonMobil know that. In fact these two companies rely less on ‘celebrity’ leaders and more on established systems and procedures developed over more than a century. Investors are backing a reliable brand like Mercedes or Audi rather than a new fangled BP jalopy - a rundown, beat-up, falling apart car that needs to be replaced.

Only a year ago Looney put his name to the BHP deal;

HOUSTON – BP has completed the $10.5 billion acquisition of BHP’s U.S. unconventional assets in a landmark deal that will significantly upgrade BP’s U.S. onshore oil and gas portfolio and help drive long-term growth.
The acquisition – which was announced in July and closed as scheduled on October 31– adds oil and gas production of 190,000 barrels of oil equivalent per day (boe/d) and 4.6 billion oil equivalent barrels (boe) of discovered resources in the liquids-rich regions of the Permian and Eagle Ford basins in Texas and in the Haynesville natural gas basin in East Texas and Louisiana.

Following integration, the transaction will be accretive to earnings, is estimated to generate more than $350 million of annual pre-tax synergies and is expected to boost Upstream pre-tax free cash flow by $1 billion, to $14-15 billion in 2021.

“By every measure, this is a transformational deal for our Lower 48 business. It is an important step in our strategy of growing value in Upstream and a world-class addition to BP’s global portfolio,” said Bernard Looney, BP’s Upstream chief executive. “We look forward now to safely integrating these great assets into our business and are excited about the potential they have for delivering growth well into the next decade.”

Ericnat17

Not really. I agree the ‘industrial customers’ bit is unrealistic, as is transport fuel. But for power, mobile 45 MW CCGT plants come on road trailers ‘ready to run’ with no Capex other than a few cubic yards of concrete to provide somewhere to put them with LNG storage tanks. The Tendrara area already has its own power plant and there are two others within 30km all using diesel for peak shaving when the 60 KV transmission system nears overload. It’s very similar to UK ‘STOR’ system which balances the National Grid using local gas turbines. Such an arrangement would generate revenue until a full field development comes along.

Paradoxically, Parsnips is planning a 5 MW STOR plant in Lancashire via Regency Mines.

Ericnat

Producing LNG is only a small part of the challenge. Finding the market is the other.

LNG for transport fuel is expanding rapidly around the world and virtually every country has evaluated it. LNG competes against diesel but it’s energy density is much lower and requires larger fuel tanks which can handle cryogenic fuels. In Morocco, truck and bus transport dominates, but there is no supply network nor LNG fleet.

See link below from Canada.

https://www.aga.org/sites/default/files/legacy-assets/our-issues/natural-gas-vehicles/Documents/TIAX%20LNG%20Full%20Report.pdf

In USA BP has teamed up with Clean Energy, but it’s taken nearly 20 years to develop the business. See link below.

https://www.cleanenergyfuels.com/press-room/clean-energy-bp-expand-renewable-natural-gas-supply-agreement-growing-number-fleets-asking-clean-fuel

In Morocco the best option would be to team up with ONEE and install a distributed power network using their grid to supply the immediate area. 1 mmscfd of gas is sufficient to generate 5 MW/d. At $0.21 cents/KWh (the power price for domestic consumers) a 10 mmscfd gas field delivering 50 MW via leased gas engines from, say, Aggreko and leased micro LNG will make money for the gas producer, ONEE and equipment suppliers.

Oh yes, both Blue Origin and SpaceX use super-cooled LNG for their rocket fuel - but I doubt there is much of a market for that in Morocco!

http://www.ecns.cn/cns-wire/2015/06-25/170668.shtml

I posted the LNG option two years ago - it is widely used to generate early cash flow from new/existing small gas fields.

https://new.siemens.com/global/en/markets/oil-gas/midstream/lngo-micro-scale-lng-production-system.html

Sound could do this themselves because equipment is rented/leased from manufacturer and two wells are ready to produce.

If you don’t need the cash dividend there is another advantage to holding Shell.

BP recently terminated its SCRIP scheme where you receive new shares instead of cash. These new shares are issued and no brokerage or stamp duty is payable. The alternative is a DRIP option allowing shareholders to buy new shares by re-investing their cash dividend. These shares are usually purchased at a very competitive commission rate. Stamp duty is payable on the purchase.

Shell has retained their SCRIP scheme.

In general Shell has always been a few steps ahead of BP, especially when BP’s interests in Iraq, Iran and Nigeria were ‘nationalised’ in the 1960s/1970s. Had it not been for the discovery of Forties and Prudhoe Bay BP might have vanished in the early 1970s.

Also, Shell is bigger than BP and more diversified geographically so resistant to ‘local’ political problems. Shell’s ‘energy transition’ plans are more realistic (50% reduction in carbon emissions by 2050) as opposed to BP’s 100%). Shell explains their plans on how it will be achieved in their annual report - altogether a more integrated approach than BP which seems to be panicking. The slogan “you can be sure of Shell” really does mean something.

Pastyc

Shell reached a 52-week low on 14th February.

Put 50k in Shell and 50k in BP

Charlie156

I’m sure we’ll learn more about the implementation of BP’s net zero by 2050 plans but listening to the recent speech made me wonder where and how BP can create value in the future. For over a century the source of new value has been BP’s strength - exploration i.e. taking a blank patch of land or sea and turning hidden resources into wealth for foreign governments, their people and BP’s shareholders.

So if BP reduces its efforts in this area of petroleum it follows that, according to the laws of nature and physics, empty or unfilled spaces are unnatural, and will be filled by others. Wherever there is a void, the universe seeks to fill it. Aristotle was right when he said “nature abhors a vacuum”.

And who are the “others”? Chinese, Russian, Indonesian, American etc producers who have no targets for net zero emissions by 2050. And probably small, independent companies who will spearhead exploration and find a new breed of investors into big petroleum production projects.

Net result - BP liquidates its assets and competitors take over in space formerly occupied by BP and churn out more CO2 and CH4 than ever?

I really hope BP’s chin-stroking strategists have an answer.