Member Info for Geo101

Only a week or so late, but thankfully it’s finally here. Stay safe everyone!

I wouldn’t go near a Frank Timis Company with a 10ft barge pole. Hope it works out for you though.

I decided against topping up/averaging down here recently in favour of waiting for a favourable entry point for either BP or Shell. With a 60p average here and the SP seeming to have found some sort of floor while others keep falling, it is tempting to buy more. However I feel the oil price still isn't connected to the supply/demand imbalance that’s about to kick off shortly and can envisage a scenario where it drops significantly from here again. If that happens, I’m probably already heavily overexposed to PMO and so won’t be buying more. BP at 180p or Shell below 700p will be my targets I reckon.

Fingers crossed for good Alaska result? Could we see a straight swap with BP for Andrew package and Zama? Both valued at a similar amount pre oil price crash. Unlikely but boy would that be a good result.

Glad he’s staying alive.

For a company looking to make its first purchase, I think the oil price drop serves LBE quite well. Buying assets close to the bottom of a cycle tends to be a very smart move. I hope no deals based on previous price assumptions were too far down the line.

What do you make of oil’s recent bounce Plebeens, seems too good to be true atm. Walking it up to get a good short entry point for the the next $10 drop?

Hunter, Italy, which by all accounts we’re about 10-14 days behind on the trajectory, is currently in a borderline apocalyptic situation. There are reports coming out of the worst hit hospitals, now exceedingly overrun, that honestly scare the crap out of me. Over 65s are now being denied ICU care in some situations. There are now no spare ventilators, with infected patients arriving hourly that need them. Those patients are essentially just waiting to die at at that point if they’re acutely ill.

This is in a country with x3 the ICU capacity of our country, assuming you live in the UK too. Flu kills approximately 0.1% of infected people. In northern Italy (where most of the UKs cases have ties to) the current mortality rate has now exceeded 5%, which makes it over 50 times more deadly. Not 20% more, or 50% more. 50 times, at least.

Doctors are reportedly now frequently having to intubate patients as young as 20 years old. Men are particularly susceptible. In the elderly it’s not as noticeable, but it’s massively screwed towards men below 50 in terms of those who get a serious diseases.

I appreciate many people will likely read the news and see it as fear-mongering, but sadly it is as bad as it seems if not worse in Italy. I pray that it’s not as bad here, or anywhere. There are some very positive stories from countries like South Korea, if we can in anyway emulate their response it would be a great help.

Hunter, still just can’t see the raise going ahead until a few months down the line when SP has recovered. PMO want to do the deal, but they’re not daft. Most employees and the directors have a big chunk of their own savings in the company. There’s a limit to the dilution they’ll take.

The short was in profit for a while, but I bailed when it went negative, £150 loss, which did make me laugh a little as a little extra kick while my portfolio was down orders of magnitude more than that, heh.

Last time PMO was at this price (2016):
Brent was $28
Production was 57,000
Lower UK oil production
Net Debt $2.2
No Zama
No Catcher over-performance.
No Tolmount or Tolmount East.

I’ll be buying back what little I sold at 62p tomorrow I think. Still confident the debt maturity will get pushed back even if the purchase falls through. If it doesn’t, oil prices will have recovered by next year enabling another restructuring anyway. Banks were more than happy to allow covenants to be broken repeatedly last time when PMO looked considerably more risky. Even if there’s more short term pain, I think in 6 months I’d kick myself if I didn’t buy in the low 20s.

https://www.upstreamonline.com/field-development/premier-sees-no-threat-to-tolmount-sailaway-from-italy/2-1-770385

How much of large falls compared to our peers is related to the the fact our next big growth project is being made in Italy?

With decreasing US production imminent, you could make the case for increasing UK gas prices as US gas production declines too?

I can see TLW getting taken out for peanuts soon. Guyana has next to no value though.

With Zama gone the debt pile would have been $1.6 odd, almost half what it was during the peak. That said, swings like this in price do raise the prospect of further asset sales or sell downs. Chim Sao aside, lowering equity in the far east might be a good call if they can get a good price. Fingers crossed for a good result in Alaska so they can get that sold too.

Also, Rome is several degrees hotter on average than the hotspots in northern Italy, FYI.

Emerald, temperature and humidity play a huge role. It’s never been explicitly tested in humans but it has in guinea pigs and other animals. For example, cages placed next to each other of healthy and infected guinea pigs show significantly increased transmission in cooler, drier environments. Hot air can hold more water just as a side point. I have a good friend teaching in Thailand and we were both exclaiming our surprise at how slowly it’s spreading there compared to more developed, ‘richer’ Western Europe. It seems climate plays a large roll, which is true of many viruses.

As a side not, I’m sure I’m not the only person here working in the industry. My company is one of the largest in the shale patch and we’ve already received an email from the CEO stating capex will be slashed in the coming months and to prepare. I’m sure similar plans are being made at most companies.

The court case is about extending the debt maturities and changing the coupon. We want that to succeed, even if we back out of the BP deal.0

And our government isn’t even taking the most basic common sense steps yet. Can’t get my head around it. Advice on 111 still to visit GP if you have all the symptoms but haven’t travelled or been in contact with someone injected. Sports events continuing, work from home not official advice yet. No full PPE for our frontline medical staff. The mind boggles. Thank god I shorted oil today as a hedge.

Very few can survive with oil at this price and therefore it won’t stay here for too long. With hedges and headroom PMO is fine for the next 6 months, at which point prices will have picked up. The trouble is knowing how low we’ll go in between. Is $33 oil enough to scare Russia (who could live with a $40 oil price so could act tough at $50) and others of working together? Might take a few weeks or months so they can save face, but everyone is hurting.

Tbh, not even going to try and estimate the crash tomorrow, 50% was just plucked from thin air. Last time oil was this low PMO was at what price? Although production was a lot lower, debt a lot higher and hedges weren’t at $64.

Expect capital to spend for most companies to be slashed though, previous guidance out the window.

Jesus Christ, just seen it. This is unprecedented, anyone with any cash in the stock market tomorrow is going to have a truly awful day. I sold 25% of my PMO last week, I don’t know whether to be pleased I sold any or to weep that the rest of it will be worth 50% less tomorrow.

Stink, no indication that ARCM have started buying back any significant portion of their short. If anything, given how much riskier the debt repayment will be if oil is subdued for much of the year, you could make the argument that they’ll want to increase it. Hopefully they take the opportunity to close while we’re in the 50s though, which might keep us slightly buoyant compared to other oilies.

Personally, if the situation stays like it is I don’t see how a placing can happen. The assets would be costing double the amount of dilution that they were before. Not sure an equity raise is a good idea in the middle of what will hopefully be a relatively short (<6 months) period of depressed oil/share price.

Will be interesting to see how this plays out. Guess a lot of us LTH will have to hold for longer than we expected to reach our respective targets. Longer term, anything that reminds shale to keep well within its bounds might actually be bullish for oil (eventually).