Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
I agree that the need for Phase 2 gas is much greater than for Phase 1. Phase 1 relates to sales of small amounts of gas to commercial clients whereas Phase 2 development will bring 2 power stations back on line, benefitting a much larger part of the Moroccan economy. PS is right about the length of time that it took to finalise the Phase 1 agreements. No detailed explanations have been provided but for me there are 3 key reasons for the delay. Firstly Covid disrupted supply chains, workforces etc. Secondly, the Moroccan clients would want to be sure Sound Energy was going to be around to deliver the contract which needed Sound getting its finances in order. Thirdly, Schlumberger had changed its strategy and wanted to get out of exploration and production. This would have taken a lot of time to come up with a deal that suited both parties and allowed Sound to finanlise negotiations without the need to get a partner on board.
None of these issues are impediments to reaching agreement on Phase 2. The key here is getting a credible lead bank on board. Once this is in place, the rest of the financing should hopefully not be too difficult to put together.
I am glad you have a much more positive outlook after looking at the recent information. When the SP Angel presentation came out I said that the share price could be in the 10/12p range based on expected dividend payments. Other posters said they couldn't see Sound paying a dividend but it is clear from the recent Q and A that management gave guidance to SPA on what their plans were so I see a dividend payable from Phase 2 revenue as being likely. This share price forecast only relates to production from current assets. Should the drilling campaign be successful then the potential is much greater. As you say, timescales are the main thing now holding the share price back but the Q and A shows management are still targeting a FID this year for Phase 2. Morocco is desperate for the gas to get their power stations back on line so there will be political pressure to get the project up and running. Once we get the FID agreed we should start to see a steady uplift in SP with possibly a larger rise if we get a Farm out and the drilling started. After many false dawns I think we are finally going to see a company which can provide shareholder returns for many years.
They will have to buy the shares. The LTIP gives them options to buy at 2.4p if they meet their targets.
Not sure what your point is. The rewards are based on achieving targets. Under the LTIP they will get nothing if the targets aren’t reached.
As for the other share payments we are told these are for achieving targets set in previous years and are being paid in shares rather than cash to conserve our cash reserves.
I understand that the research is not independent but the figures they are using are from their close understanding of Sound and its future opportunities. Remember that the EPS of 2.8p per share is after taking into account the cost of funding any outstanding liabilities. Using about 20% of this to reward shareholders, some of whom will have been investing for 10 years or more by 2025, doesn’t seem unreasonable and leaves significant sums to use for future projects. There is no tax on profits from development of the licences to pay for 10 years.
I dont see why the LTIP announcement should displease shareholders. It encourages the team that have turned the company around to stay for at least 3 years to see through Phases 1 and 2 to successful conclusion. If Phase 2 isn’t delivered it is unlikely that the share price will get to 10.75p in 3 years which is the required level for 100% of the options to be granted. As a shareholder I will be very pleased to see a share price of 10.75p.
Meant to say Tendrara Phases 1 and 2 alone.
The suggested EPS from 2025 is 2.8p.
Based on this EPS the figure of 0.6p per share is the amount that SP Angel believe that Sound can comfortably pay as a cash dividend to shareholders. They highlight that this would be a yield of 25 percent based on the current share price. As most companies pay no more than a 5% to 6% yield, this implies a share price at that time of around 10-12p for Tendrara alone.
The bond with a value of around ÂŁ24m had a maturity date of June 2021 so was shown in Current Liabilities in the 2020 accounts. The maturity date was renegotiated to 2027 so is no longer a current liability. See RNS 14th April 2021.
That map misses off the Eastern section of the network. The map on Moroccan railways website shows the current network. There is a line between Oudja and Bouarfa which passes Tendrara. The line appears to take passengers on special excursions only but maybe used for freight on a more regular basis. There was a station at Tendrara but from pictures on the internet it looks as if it is derelict.
Daveyboy is right. You are citing nascent technologies that may be financially viable in the future as if they were going to cause a significant reduction in the use of oil and gas in the next few years. Green hydrogen is much more expensive than that produced by hydrocarbons and will remain so for at least another 10 years. The DMG process you mentioned is really small scale and will be for the significant future. Even if it got to the stage when it could take all of the UKs plastic waste (c. 4.9m tonnes), it would only produce enough hydrogen to power about 15,000 HGVs out of a total of over 400,000. As Daveyboy says, the thing environmentalists never talk about is the use of oil and gas to make plastics. This isn't going to reduce anytime soon, especially as much of green technology eg solar panels is made from plastics.
No single buyer took more than 3%.
That is not stretching the facts at all. The fact is he sold some shares to be able to buy more. That is not the action of someone who is looking to reduce his exposure to the company. Also remember that he not only had to pay capital gains on any of the shares he sold but also, he immediately had to pay income tax on the shares that he bought.
No, they were options he had to pay for.
Maybe my maths isn’t what it was but that looks like he was buying. Selling 839,378 and buying 1,250,000. Isn’t that an increase of over 400,000?
You need to remember that only 54m dollars is payable in cash. The rest is the value of the carry. The cash is also payable in 3 tranches so there wont be enough to pay off the bonds until after the second tranche. Even at this stage, it would leave us with little cash to do anything else. There is no requirement to settle the bonds until June 2021 so I think that we will re-negotiate our debt requirements nearer to that date when we will be closer to generating income. I can’t see any dividend paid at the conclusion of the deal being more than 0.5p-1p per share unless we have gained enough funds from the Sidi to cover our future drilling requirements for the next few years.
That’s rubbish. The share price went up between the Badile gas shows RNS and the news that the find was sub-commercial (not a duster). The well wasn’t abandoned until September after tests were finalised. Why tell lies ?
The bond isn’t due to be repaid until June 2021 so there is no imminent requirement to make a decision about this now. A dividend payment is therefore a possibility should the Company so decide. They answered a question about the options for the bond when it becomes due.
You do realise the company are already ousting Parsons. It doesn’t need an EGM because it has already been announced.
Agreed. From EGM’s description his/her friend has absolutely no idea what a joint venture is or how it works. You would be better off finding a description on the internet than listening to that “expert”.