Member Info for Gassy

130mln shares traded today. Have traders been tempted to take (huge) profit for holders to buy up?

To be able to negotiate, you have to have some viable alternatives. It might be that the ability to issue shares, and pursue an early LNG revenue stream are necessary options to fall back on if the Horst pipeline development does not go ahead. We may end up with the big scheme agreed when the share issue and LNG options are not used but served their purpose.

Hope this kills the cheap and desperate sales pitch although I have little doubt this Scotforth crowd will try again in future. What puzzles me is how they believe that this bb could be a sales channel to put pressure on Sound leadership to buy their services. We may be in serious trouble but never that much.

don't get the negative reaction to the RNS. Understand the frutration that it has taken years but at this time, delay appears to me totally appropriate and t be expected.

Joe - news has not been particularly good either. Nevertheless, I am looking forward to the news at end of this week

Just ignore the tripe. Every now and then something interesting comes up but it’s rare these days. Unimpressive indeed, Brian selling some shares but he has plenty left. Don’t understand his strategy... more news end of next week so holding my (way too large after averaging down) stake for now.

Jez. And why do you care so much?

Great endorsement. I am missing something - $1.2B market cap is a bit over £900m, almost 5x current market cap. Where does the 89p share price come from?

Thanks Exploration - some great context. Surely Sound will have a top notch dataroom set up with all prospects and expansion opportunities. For ‘fair value’ my sense is that we need at least 2 serious bidders - not an awful lot of leverage otherwise.

Jones - good question (why don't II don't recognise the value) and I have been scratching my head on that one for a while. A couple of possible answers: i) the value is not there, ii) the value may be there but it is too risky, iii) the value is there and they simply wait to jump in at the right time. A thought on ii) is that whoever recommends getting in now is likely to more negatively) affected by getting it wrong than (positively) getting it right. Thought on iii) is that on good news there is almost as much to gain if you respond quickly but at much less risk. I am surprised that the SP pretty much is on hold at 8p, why do you think that is?

I wonder, are so many posters so keen to kill sound off? Asking for Parson and his team to be removed in the middle of the sale process is so obviously not the way to go. We are stuck with them and I fully trust they are best positioned and fully committed to get the best deal they can. Am I happy with how things have turned out? Of course not. I mostly blame bad luck and slippage. It has always been clear we'd be the last to know if a deal is done - that's it, accept it, we are not driving this. Still hoping for a sale equivalent to 25-50p and I'd be happy to stick with some SM upside potential.

Disagree about the radio silence signalling ‘he does not care about us’. It simply is an expected attribute of this stage of the process.

Thanks JTF for a well considered post.

It urged me on to have a look through the timing of the decisions - the marketing was only decided end of May. There may have been discussions with interested parties all along but if you initiate a process, you essentially start from scratch to bring new parties in. We are three months in, which seems to me perfectly reasonable in terms of not having reached a conclusion. I assumed September to be the month of truth.

I completely dismiss Crude's assessment and naturally any interpretation of his assessment. There is just no way that JP will pass sensitive info / signals in a chat in the evening. This board is hungry for information and in the absence of this, seems to make up it themselves.

I agree with JTF that a plan B of raising money and developing the discovery ourselves is the worst scenario I can think of. However I suspend my judgment a little while longer

Like many others i am overinvested and well under water. Juist a quick reflection; the reasons I invested were I) huge resource/upside, ii) fully funded drilling campaign, iii) effective application of new (well) technology, iv) commitment to LE, v) aggressive timeline and team to deliver this, and vi) limited downside if all goes to pot. Unfortunately we find ourselves testing my last assumption but if in fact we end up with a limited downside (say 40p), i’d make the same investment all over again albeit a bit more careful. Enough said on this bb about v) but at the top of my list is why the CEOs 18mts redundancy if his key contribution is the LE with ample shares as reward...

Just a thought - could the mystery $3m raise be a consequence of the $15m raise structure. For instance a warrant / option or maybe obligation to buy an extra 2% capped at the same level of the initial $15m placing?

Hamish - I think you significantly undervalue a 2.7tcf discovery. It’s pretty big - using the sound rule of thumb (the revised one of 1£ for 1 net tcf) that gives you a 65p impact. You are quite right to point out that there is a significant uplift of credibility of the basin model and a 10% value has been talked about of prospective resources this derisks - taking the 30tcf base that would add another 3tcf equivalent.
DrJ - I miss the point of your comparisons. These companies flatline because they don’t have material discoveries. Just compare their prospects to Sounds - bear in mind that 1tcf = 170 mmBOE

Exploration - I think what you mean is that if the PoCS of appraisal wells is 20%, the probability of drilling two successful appraisal wells is 4%. Why would an appraisal well have such a low PoCS? Makes no sense to me at all, and why do both appraisal wells have to be successes to be prove a commercial accumulation? What pint are you trying to make?

Sounds credible - especially if TE-10 proves up the start play and basin model by extension. The’d swing for the fences with TE-11 targeting the Paleo.
However, this would be BMs job to think through and for JP to claim this as his clever idea makes little sense to me. Would his idea have to do with getting value from Sidi? For now throwing in Sidi as part of the exit would give very little uplift. An asset sale (C4X?) of Sidi plus some cash prior to the LE for shares would give us all an extra shot at Sidi after selling Sound...

And since the gas is below the structural trap, this suggests that the trap is closed removing a key risk

A couple of disappointments I must say – like most, I take the TE9 failure as just part of the risk we take. Most disappointing is that Brian has now reduced the PoS of TE10 whilst he clearly stated the wells are independent (so clearly they are not). He also caused confusion around the value of the seismic (I think it only has value if we have success wells as the seismic identifies the follow-on prospects a discovery de-risks). The valuation confusion (net recoverable vs recoverable) is irritating as Sound could have picked it up and be clear way back. The guidance now is clear as JJ worked it out and stated pps impact. That means exactly what it says – already takes into account that it has to be attractive terms for the one who buys.

So I just bought (yet) another tranche of shares below 15p because we absolutely will sell the company, we have cash to drill the two remaining wells and I have done my own calcs that show the guidance from JJ seems a bit conservative but using these gives:
A base value of 23 pps
A 25% chance of a TE10 upside of 42 – 176 pps (base 92)
A 25% chance of a TE11 success
A small chance of a Paleozoic upside

Never bought into the multiple pound valuation but I reckon the shares are undervalued and worth about 1 pound for those who have the risk appetite. At this stage well under water with my average but feel 15p is too much of a bargain.