The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
I'm not sure we are discussing here - my post was making a case to say that Buchan is no less likely to progress just because Cambo is stalling.
Majors, as I said a long long time ago would not be interested in a mid-life field like Buchan. Maybe there's not enough in Cambo for Shell, or maybe it's too big/complex/uncertain for current times. If it was a slam-duck monster then why not buy Ithaca out and do it? Ithaca are wavering as it is, sure they'd flog it. Agree majors need big, complex, profitable projects - I think in part as they don't want low-quality reserves on their books due to investor pressure.
But Buchan + nimble independent is a great match, hence recent F/O. And it would be the third-largest development in NS (including West of Shetland) after Rosebank and Cambo now that Glengorm and Bressay aren't going ahead. No puddle.
hmm. more than 2 and a half times the re-development cost of Buchan, and less certainty of outcome. In a more benign tax/ political environment your bullishness might fit. Location as you say is an issue. We agree to disagree on Loch ness / puddle analogy.I'm making a case that Buchan still makes sense when Cambo does not. Best evidence - decent half-a-farmout a month ago and Cambo stalling.
I'd take more issue with the Buchan / Cambo comparison Sonofthebull. Whilst it's tempting to get into the sort of internet exchange that goes "you may be confusing the 800mm oil in place with 170mm actually recoverable", I will resist that as I confess I get my rock-related information not from a lifetime of geological study and oil-field experience... but rather skim listening to that youtube clip https://www.youtube.com/watch?v=BEn29qVGRfg and reading JOG presentations.
By rough guess Buchan would give over half the oil of Cambo? someone put me out my misery if I'm wrong? If you include prospects it's a decent clip more
Cambo is 1000m below the NS in a remote location. It's much more carbon intensive than Buchan, more complex and lots more to go wrong. Cambo was discovered 2002 so that tells you how easy it is to develop!
Buchan is 100m below surface, in CNS, surrounded by existing infrastructure that doesn't need to be built (no more CO2 in steel pipelines!). It's brownfield which keeps it below the radar of 'new developments', politically and loony greens-wise. It's also extremely well-understood geologically, and is an easy reservoir to extract from - once developments starts we can be almost sure they'll get good flow rates (at least the moderate flow rates that are planned; it's a midlife filed).
Buchan/ JOG is valued as a speculative play. Its resources are not technically reserves - but that giant gap is why it's an opportunity. It's a known-quantity - a great way to dodge EPL without risking a complex development.
May I say the following prayer of JOG:
Les/Benitz et al, grant me the serenity to accept the things I cannot change,
the courage to change the things I can,
and the wisdom to know the difference.
Don't get get up or stressed about the idiotic political views (politics of getting elected and governing are not the same!) and twitter feeds. I maintain on balance WFT helped JOG. Amongst the noise it's a scarce asset - economics no longer work for E&P in NS, neither do large complex developments - but JOG is the classic low-hanging fruit - low risk and of scale, and ESG positive . And any great investor talks about the management team and JOG has the best one going in the NS.
News to come soon!
Dick - this is a political football Labour will kick until they are in power.
Shell is looking to reduce reserves (unless highly profitable) for ESG reasons. They are exciting all sorts of developments for this reason.
I agree it is highly frustrating but we will continue to see production and development in the NS, where both resources and critically developer fits the right profile.
Bought 110k over last few days. Some of the press is frustrating but the tax receipts for Buchan will be massive an Starmer knows what happens when UK fiscal position looks dodgy. N.B. the press has started to differentiate between home-grown fossil fuels and imports, and also emissions tariff for LNG. I believe farmout will come quicker than expected and will be FSPO (heard some rumours from someone well-informed) - everyone involved needs to get cracking.
I used to check this board more often - some amazing numerical and qualitative analysis from some members, and even a major shareholder posting at important moments.
I have to say it's painful to come on here - not because of the trolls (which were filtered long ago) but by otherwise reasonable and interesting members that continue to give the troll oxygen. It's way worse for the board than the trolls.
Please, filter the trolls and bring the board back to discussion on the most interesting phase so far of this brilliant story.
Apologies for being sanctimonious but it's exhausting watching giving trolls exactly what they want.
This price action is totally crazy. But this is a crazy stock!
I'm trying to enjoy the rollercoaster but it does test the nerves.
Thanks Jim. That's interesting. Fingers crossed
Hi dgdg1 - I don't have any info (tried all sorts of contacts but none telling!), and I think on balance it probably won't happen. I just mean surprises to the current status quo are tilted to the upside.
Lab on radio 4 today banging on about windfall tax increase, I personally think it'd be minor and would it happen at all once they're in power - I don't know.
This price action is highly perplexing. I can only think it's technical due to a large stake wishing to exit, or PI's having finished their ride, and not enough new buyers (or buyers on the sidelines).
There are so many positive news flow items! EPl floor, FO stakes built, acquisition made, oil price up, concept selected, JOG found some funding for part of their stake.
Yet so few downside announcements - FO is now done with a backstop, oil looks to be defended by OPEC above 80, and the equity is so well defended by all the prospective payments by NEO there's little chance of a fund raise (I can't see why they'd want to?)
But the price drops. I don't understand. I'm buying a bit more in a week when some cash comes in.
Looks like the FY year end was the negotiating deadline for NEO. signed 5th April RNS's the following morning.
Les and Steve Brown are mates, JOG buys Orcadian and you have a major NS player, with 20% of GBA and most of Pilot + loads and loads of drill ready E&P.
Haha. This SP reaction is amazing - and caused by JBiddy-type decisions (which I fully understand JBiddy - but you'd agree this isn't a perfect way to set the fair price)
We've subtracted hope for a lottery win, but we've gained hugely on certainty of a decent F/O. Their minimum result is 12.5% fully farmed out, and all the cash they need to get there without raising. If they get materially worse terms for the other half of the F/O (say 10% carried interest?) they F/O at 22.5% - F*&king great!
Existing institutions will be in meetings today discussing whether to act, which I'm sure they well as the stock has become less binary.
News flow will included further stake-building, and possible acquisitions - JOG is now not just a blueprint for a company! with a top-class management team, they can be buying at probably the lowest point in the tax cycle (ok perhaps a little more from Lab but that will be priced in) and the right point in the commodity cycle.
We'll be steady up from here. GLA
They've got half a deal for 25% carry? That seems good to me?
EnQuest seems to have deferred work on the Kraken field.
Gov has surely got to crack soon on EPL floor?
For discussion:
If Ithaca is holding off on Cambo to put pressure on Treasury to intro EPL price floor...
And Ithaca is hot tip for JOG partner...
Then JOG will not F/O until EPL floor is introduced.
What do you think?
jim333 - are you James Baldwin?
Sounds like a guess in an oft-played family game...
Thanks for your post
If you could get comfy on cash burn and business being bust by June if nothing happens, this is an epic multibagger given what's happening to JOG.
Unfortunately SB often posting about Cambridge boat crews makes me worry the end is nigh for existing shareholders...
Anyone have any positive thoughts on Orca getting there hands on some working capital?
I feel this is a legitimate red herring as these guys are in the same boat as JOG?
They announced they had great new high-probability finds in seismic, and it would look like there main field is a goer if GBA is a goer.
The worry is that equity gets wiped because of cash burn.
Does anyone have a view? I have stock here bought at 16 (oops) I hoped would be a leveraged play on JOG farmout (like buying JOG way back when at 40)