Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://www.londonstockexchange.com/news-article/TXP/completion-of-the-cascadura-eia/15574431
They're going to be late - the question is by how long.
The weather in the area is poor but good guidance would account for that. Overall, the primary delay was Shell/NGC but the whole delivery has been a shambles. A shame really as they have had some real success in phase 1.
As I posted on the other board - One possibility that no-one has mentioned is that both NGC and Shell will need to sign off on the pipeline. Shell because it's on their licence and NGC because they will adopt/buy the pipeline.
As such, the issue may not be anything to do with the installation but merely the formalities of sign off. There is history of how slowly NGC/Shell move paperwork on matters relating to Coho.
Happy to be corrected
Volpino - I believe the EIA covers the lot. The admin record is here:
https://drive.google.com/file/d/10dHTq65LtOBo_OFjE39TT6I87KcFNK8d/view
and includes:
27 Establishment of infrastructure
for pipeline systems
The establishment, modification or
expansion (inclusive of associated works)
of a pipeline or pipeline systems for
transmission of produced fluids, crude oil or
natural gas.
Coho seems inevitable - it's the when that's a bit of a mystery. Having waited so long, I'm sure we can wait a little longer.
The EIA is the last barrier to Cascadura and the prospect of the authorities granting an exploration licence and then refusing to allow commercialisation under any circumstance seems highly improbable. I couldn't find a single instance in the online database where an application failed to get approval following the grant of an exploration licence. Such an action would probably kill the entire industry on the island. As such, I think/hope we will get a positive response very soon.
Good news but the 8% spread remains a major barrier to entry/exit.
Hi Scott - I revisited the RNS reports:
8th NOV - HTTPS://www.investegate.co.uk/touchstone-explrtn.--txp-/rns/light-oil-discovery-in-first-of-3-royston-1-tests/202111080700085726R/
6th DEC - HTTPS://www.investegate.co.uk/touchstone-explrtn.--txp-/rns/updated-testing-results-for-royston-1/202112060700085976U/
21st DEC - HTTPS://www.investegate.co.uk/touchstone-explrtn.--txp-/rns/third-test-results-at-royston-1/202112210700053209W/
>> interval at base of intermediate flowed 550 bbl/d (see 6/12/21 RNS as first RNS stated lower flow) with 94% oil cut using a sub-optimal downhole assembly (as they expected gas)
>> interval at base of overthrust flowed 430 bbl/d but 90% water cut - again, downhole assembly sub-optimal and they state interval was too large
>> interval at top of overthrust flowed average 705 bbl/d with oil cut of 40% to 60% - only test optimised for liquids
Note in final RNS - "All three of the tests encountered economic oil and confirmed the presence of hydrocarbon over the entire interval. This information, in the context of the 3,156-acre structure as defined in our 2D seismic interpretation, confirms a large volume of resources in place on the Royston property. To clarify, the final production test was the only test properly configured for an oil test and more accurately depicted the productive potential of the reservoir."
Obviously the market has this down at near zero value but it is the sheer scale of Royston (3156 acres is 4.9 square miles) plus the presence of oil everywhere they tested that is encouraging. Whether all of it is worth recovering remains to be seen. It is very frustrating that we're sat on our hands waiting for cashflow but I'm hopeful the gain will be worth the pain....
LV1991 - not sure why you said you were buying at 114p in December if you think no more than 95p is fair value with everything baked in?
The idea that the market won't place a value of confirmation that Coho is online and Cascadura has cleared all regulatory barriers seems idiotic - but who knows.....
Canadian short has decreased by 154,672 to 1,111,067.
HTTPS://www.iiroc.ca/sections/markets/reports-statistics-and-other-information/short-sale-trading-statistics-and-reports
I'm a little more forgiving regarding Coho. If you look at public documents, the timeline comprises:
(a) 133 days to go from spud to test conclusion (8/8/19 to 19/12/19)
(b) 208 days to undertake surveys/design (14/7/20)
(c) 192 days to get CEC approval (22/1/21)
(d) 403 days for NGC/Shell to agree on the connection (circa 1/3/22)
TXP have taken 341 days whereas counter-parties have taken 595 days - and still going. In particular, the 403 days is unlikely to be part of any future development.