MEM
yes, I agree 100%
but ...for now...I just wanted to focus hard on the CPR numbers
as they are of themselves incredibly large
If I were PG...what would I do?
Well I am not but that doesn't stop me from pondering
TT/EOR =
of course...exit if I need to
A deal is do-able...and in the near term
play hardball as I hold the aces
JV coming up
Carried interest
IRELAND =
keep quiet
repeat the above
whilst working like Trojans with partners (who are impressive)
Morocco
await AIM float
but THEN issue new CPR
should go well!!!!!!!!!
Do JV with industrial partner re funding
announce in late Sept
avoids dilution of field equity...stay at terrific 75%
back to back MOU4+5 drills
EARLY in Q1
TRIPLE test...production
There is quite some evidence in US as to benefits of dual testing...
Make the NEW CPR figures VERY REAL
just in time for Irish decision
Regards
GRH
But ...on the upside...
In the medium term, the gas will not be trucked
(very expensive but very opportune re timing )
as it is in the model set out on 18th March
but it will be transported via the very adjacent GME pipeline ...
so operating expenses will drop significantly
Thus the value per BCF...nett to PRD ...will rise accordingly.
Where does that leave my calculations?
I am going to err on the safe side and ‘chop’ the earlier figures...
By more than half...
Of course, it is not scientific
and I can produce myriad reasons to argue it is too brutal
BUT...
my current working assumptions are that ...
on the sale of Guercif,
shareholders could receive a special dividend as follows:
Low estimate discovery: £2 per share
Best estimate discovery: £6 per share
High estimate discovery: £13 per share
As to timing…
I interpreted the Malcy interview as hinting that Paul thinks he will have all the data necessary for a sale in H1 2022....
WHAT!
It is also worth saying that the 18th March RNS tells us that an EXAMPLE discovery producing ‘only’ 36.5 BCF over 10 years is COMMERCIAL
REPEAT...COMMERCIAL ...
Indeed it is commercial ...MANY TIMES OVER
It is also worth noting that such size of an example discovery represents only 13% of the LOW estimate of resources in Guercif.
That is some safety margin, you might agree
And then there is Trinidad/EOR/CCS . (hard yet to value but certainly BIG)
And then there is Ireland. (Bigger than Morocco?)
Oh yes...I almost forgot...
Have you considered the rest of the licences / areal extent?
And the NATURE AND FORMATION of the geologies?
What we are trying to value above is only one small but valuable piece
IMO...
Paul and his esteemed colleagues do not have a tiger by the tail here
They have a veritable safari park (thanks to ‘ Analogies R Us’)
Now you are starting to realise what I meant by ‘call option’ value
Yes...I really am here for Morocco
ATB
Afternoon all...
I said the other day that I would have a go at making the recent RNS a bit more ‘accessible’
Well....this is it...FWIW:
That RNS (18th March) is the FIRST time we have seen PRD give us more detailed information about what Guercif could really be worth to shareholders.
The RNS fills in many of the missing piece of the jigsaw for PRD/Morocco.
We knew how much gas the company is targeting
and now we know the value to PRD of much smaller example volumes of gas.
NB: It is really important to stress that these are EXAMPLE volumes
If we put the two together, we get a giant sized clue ...
And we can estimate the value of the type of large discoveries that PRD are actually expecting (remember Paul’s grin!).
The following is my own back of an envelope ‘try’ (timing?)
at valuing Guercif using the PRD supplied data...
I hope it starts a conversation here ...
as I am sure that others will be able to improve on this.
Here we go...
So, we start with the value to PRD of a smallish EXAMPLE gas volume
That would result in the extraction of 3.65 BCF per year over 10 years...
again, that is an illustrative period
This value (nett of operating and capital costs ...Opex and Capex)
is given as $19.7m per year
and that is AFTER deducting ONHYM’s 25% share.
That is £14.17m per year (at FX: $1.39/£1).
You can express that as a figure of £3.88m for every ONE BCF
(I am not making this stuff up)
That equates to 1.51 pence PER SHARE ...PER ONE BCF (with 257m shares in issue).
Now ...take the target figures we have been given as the estimates of ‘gross recoverable prospective resources’ in Guercif:
Low estimate ...279 BCF (RNS of 7th December 2020)
Best estimate ...819 BCF (RNS of 7th December 2020 and 20th January 2021)
High estimate ...1,823 BCF (RNS of 20th January 2021)
Now ...apply the 1.51 pence per share per BCF (which already has a deduction for ONHYM’s 25% share) and we get:
Low estimate discovery: £4.21 per share
Best estimate discovery: £12.37 per share
High estimate discovery: £27.52 per share
Decent figures ...but hang on
This is not the likely end valuation
Of course, downwards adjustments have to be made for:
- NPV (the time value of money...it takes several years to extract the gas)
- A super large find may mean some international exports where prices could be lower than Moroccan industrial gas prices. (the way things are going... post Biden... I am revising my gas price assumptions...upwards)
- The possibility that not all of the “recoverable resources” can be recovered during the licence period or extensions thereof.
- Tax in Morocco will have to be paid eventually.
- Cost of Reserves Based Lending ... (or a partnering/farm deal) to finance further wells.
- PRD will need to leave something worthwhile for the buyer.
But ... on the upside...
I went through the presentation again on you tube...
It spoke volumes...
about confidence/assuredness and low profile ...totally 'matter of fact' delivery
A refreshing change in this sector
(I will only focus for now on Morocco although I think TT/EOR has the power to surprise us)
There were some terrific bits...
Not least of which was that PG was able to reaffirm that the CPR figures remain as already stated in the 2020 doc...
What that means is huge...
IE the RNS of 18 March stands!
And ...with it ...the explanatory post that has become abbreviated as simply ‘Michael Caine’
So
At the risk of the knockers having a total meltdown...I am about to post it again
I must emphasise that :
The substantive figures it contains are ALL as provided by PRD itself in RNSs
They are not 'my' figures
They are not fabricated
They are 100% Kosher
Merely putting into words what was a hugely info dense RNS of 18 MARCH
It will be along in a few minutes
Obviously, one now has to adjust the figures to account for increases in shares in issue...
but I will let others do that...
I will merely post the original version
Regards
GRH
Lots of interest...almost too much to count...all highly positive re Morocco!
PG commented that there were 'reasons' for the wording of 6 July RNS
I 100% maintain my view that ...had the RNS of 6,12,19 th July been consolidated...or even reversed as to order, the SP would have been over 40p
Those 'reasons' must have been compelling
Regards
GRH
One of the challenges (of running a quoted outfit )
is encountered when...in the midst of negotiations, one has to do a dog and pony show to investors
Those investors will almost inevitably seek information that might well be very sensitive
but to which they feel they have a right to KNOW...its the 'entitlement' thing
I used to simply veto holding any investor presentations
when I was doing deals that were price etc sensitive
(it was easier in my day as I had almost 100% institutional investors
and the web was a glint in someone's eye ...
as opposed to nowadays where it is the default mode of comms)
As such, I am not sure I would do a presentation this evening
PG really has no such veto option here due to the nature of the shareholder base/clamour for information
BUT I reckon he has taken the sensible course
of simply talking about Morocco
and leaving out details re TT/EOR/Ireland et al
Thus...
I find it very instructive that we are to hear little... if anything ...
about PRD's non Moroccan businesses
Regards
Michael
Crikey:
This from Schlumberger website:
((The ULTRADRIL system has an inhibitive capability closely matching that of nonaqueous drilling fluids. Its triple-inhibition approach deters the most reactive shales and provides superb wellbore stability, preventing sloughing and swelling that can cause stuck pipe and washouts. The system encapsulates cuttings with a thin polymer coating that virtually eliminates shale dispersion, reducing the need for dilution and disposal of large fluid volumes. The ULTRADRIL system also coats the bit, BHA, and drillpipe with an accretion-inhibitive coating that keeps the cutting structure clean and effective, resulting in less bit balling and higher ROP.))
This stuff is used ALSO on shale drilling...
where the shales give up vast % of their hydrocarbon energy very early in the life cycle of the well ...causing well stability /pressure problems
The fact PRD is using this stuff in Guercif says much IMO
the washouts/sloughing off of the well bore may have been when a different fluid was used?
This is important information...its as clear as daylight...in the appendices
Blimey
Regards
Michael
When the RNS was issued on 6 JULY,
many many PI folk sold out/threw toys from prams etc
Yhey failed to understand it...
because it did not contain one single word (that they all seemed to regard as magic)
There were then efforts by several terrific posters (with a little contribution from me too) to try to explain
But still the knockers kept going
Things did not pick up even when the explanatory RNSs were issued on 12 and 19 JULY
and even when posters again explained what they meant
Well :
The frontispiece (to tonight's presentation)
Should interest many folk
Confirmation of THE word
In large font :
DISCOVERED
Biggest disconnect (SP/ resource value) in the market bar none
DYOR
Yes...I really really did
Regards
GRH
Morning all
others will do a better job than I will re line by line examination of the presentation...
I would just suggest that everyone needs to listen to PG as he goes through it
As far as I am concerned...
I was going to post a couple of days ago ...
a tech Paper about mud logging in high temperature/high pressure wells
but I decided it was tempting fate etc !!!!!!!!!
Not a bit of it...
we now know that we have a higher temp/higher pressure well on our hands with MOU1 !!
I cannot begin to tell you how beneficial that should prove (remember the mention of 'well'headS'??)
Just FYI...
I was privy to several measurements of the Sound acreage re TE5 Horst...
and although I am not prepared to say much (for reasons of common decency),
I can tell you that the TE5 porosity figures (and others) that I discussed at length
are not like those we are seeing with MOU1
Guercif is in a different league
I will keep this simple...
several here will recognise my formula as I have mentioned it several times:
P1/Permeability x P2/Porosity x C1/Charge = H1/Hydrocarbon Energy
H1 = ££
No ... that is not a mistake
This is big
BTW...
Ignore the 'no change' re CPR...
there are many many reasons to leave the already staggering numbers unchanged
At least ...for a while
Michael Caine was spot on
and GRH did OK too
Regards
GRH
Mark my words...
THIS is the stuff of civil unrest ...
in UK
Quite what it will be like in Ireland ...(sitting at the end of a possibly non benign supply chain )
I cannot begin to imagine
The unwinding of the data centre industry can come frighteningly quickly...
and ...
unless power supply HEADROOM and RESILIENCE are put in place immediately
to assuage the reasonable concerns of the business managers
It WILL unwind
I was an MD at EDS
and there is NO way EDS would have allowed itself such exposure ...
and then ...once the data centres start to move (pretty easy nowadays due to free comms)
there is SFA the politicos can do about it ...
as the tax base disappears with it
So the populace will have been confronted with a double whammy
1...sky high energy prices resulting in real suffering
2...rocketing tax rates ...to try to compensate for the loss of tax from the data centres
I have been posting about this issue for ages
but did not think I would see matters move as fast as they are now
THIS is unravelling as I type
Regards
GRH
Nice post Cube...for which I thank you
I agree 100% ...E&Ps gobble PI cash ...
I hold more data on the sector than one can shake a forest full of sticks at
Outfits do so ...
Time and time again!!
PIs seem never to learn
I have posted the reasons on here many times...
There is a reason why I am loaded on PRD
It's all to do with Moroccan geology ...the Messinian Salinity Event having been bountiful to Guercif
The fact that this micro tiddler has AT LEAST two other legs to its business
just makes my eyes water
And for those who read my stuff
Tomorrow really isn't Tuesday!
ATB
Regards
GRH
Afternoon
a couple of folk asked me ...offline...at the weekend
why I am not posting much right now
All I can say is
have you tried to READ this BB...and extract value from it?
It has become a totally nonsensical place for decent debate etc
So much sniping and ad hominen drivel
Frankly ...I don't care...
as I talk with my own private networks in a much calmer/more considered way
but posters here might well wish to consider this:
(please forgive my CAPS):
WHAT SORT OF MESSAGE DO YOU THINK THIS DRIVEL CREATES
IN THE MINDS OF NEW FOLK ... IE POTENTIAL INVESTORS...
WHO MIGHT LOOK IN HERE ...HOPING TO ACTUALLY LEARN ABOUT PRD?
Over the weekend there was only one ...ONE...substantive post
it came from Methodology and then it elicited a smart arse response
I wouldn't blame the bloke if he decides not to post here again
Almost nobody actually tried to follow up on what Method had actually spotted/said
This is not a private forum...everyone is on display
Sorry to be blunt
Regards
GRH
Good and welcome reply Pasta...thanks
As you have gathered...
I thought that Methodology deserved a better reception
Good advice from MEM re drafting /sleeping on it...
FWIW...I do the same thing...it works for me
This is a very good and genuine forum
and there are folk on here who really are trying to help...
by sharing a level of experience and knowledge that is unusually high and in several cases pretty insightful
The THING is though that those contributors have NO need at all to post on here...
Speaking purely personally, there are five or fewer posters on here who I gain from
the rest are in your situation...posting and absorbing etc
and that is wholly appropriate
As I have said before, the small cap investing 'game' is red in tooth and claw...
and ..if heavily committed... it can activate a whole range of emotions
For example...
When in profit...
You will probably feel that you are able to outsmart the smartest/have cracked it
When underwater...
you will probably feel that you have let yourself/family down/been stupid
Of course...neither is true!
I hold a lot of shares here
and I am not totally immune to emotion ...
even after 50+ years of dialling it out
I wish you well
Regards
GRH
Morning all...
Blimey Pasta...
Have you read the Methodology post in question?
Have you UNDERSTOOD the import of his findings?
'Method' is one of the most research driven posters on this BB...
What he has come up with this time is ...quite possibly ...a game changer in our understanding of what Guercif might represent
But you complain about possessive pronouns etc
I have looked back through your own posts and... since you started on this BB...
they have contained not one single helpful finding
I think you owe an apology to Methodology
Thank you
Regards
GRH
Methodology
My apologies...
I omitted to thank you specifically
for your EXCELLENT observation ...re the delayed testing of the SDX /LMS2 well
perhaps being twinned with MOU1 for reasons of procurement /costs
Hmmm...that is really interesting
Couple it with the obvious time window for PRD to get the drill rig back ...to drill MOU4
Hmmm
couple that crew be testing all three wells in short time frame
There was commentary recently
about the benefits of DUAL testing a down dip and up dip location on the same structure
I put that lot together with the blindingly obvious fact that Lonny JOINED/STARTED work on 12th July
It will not surprise me in the slightest if we learn... in due course...
that he was awarded share options/share price based incentives
In the nature of these things, it would also be unsurprising if the option pricing was at a VWAP calculation...say the three trading days immediately prior to joining?
Had PRD released the 'full nine yards' (of info that was subsequently released on 12th and 19th July )
within the RNS of 6th July
my view is that the SP would have risen greatly prior to Lonny's arrival...(about 40/45 p is my view)
I think we have a monster here in Morocco
and that Lonny is extremely important overall and to monetisation
Regards
GRH
Methodology
good posts...thank you as always
BTW...I don't wish to come across an an old misery guts (yes I know)
but I can see no point at all in guessing SP at the end of the forthcoming week...sorry
My logic is simple:
Nobody on here has ANY idea what ...IF ANY...news items might be released this week
so how can anyone then even guess at what the SP might be?
This little outfit has more irons in more fires than we can shake a stick at...
but which ones...if any...are sufficiently matured to affect the SP this coming week, we cannot tell
I have said before that one of the things I do is to write out ...as a little drawing ...a timeline...
and then populate that timeline with arrows indicating the news items that are possible...
the more impactful/ bigger the news item ...the bigger the arrow
ditto the certainty % also
It is amateur night out but it does ok for me
PRD's time line looks like a whole archery club has camped out ...never seen the like
How many of the really big arrows PG et al can land in a reasonable timeframe is the question
It is one that will occupy his mind a lot as a major shareholder...
I know folk think I am simply wrong with my £15 total return per share...
but if you really do your homework
(it will occupy several solid days)
you will conclude that my figure is actually conservative
Will we make it the whole way?
no idea...I think we could
but it is vanishingly unlikely we will not hit several ££ per share
and ...if old Sefton's trifecta comes good...say no more
Yes...
All IMHO
DYOR
Caveat Emptor
ATB
Regards
GRH
AS most know, I hardly ever mention other companies
but I am quite excited as SQZ has hit another ATH
I think there is a lot more to come ...
they could be taken out soon...
I have fair value at well over 300p /share
The cash machine effect is truly impressive
but nothing like the sort of numbers I have enjoyed
(I met Tony Craven Walker late in 2014 and immediately invested...
nothing insider of course ...I was impressed by his abilities/ambition...
it has been a good run)
Regards
GRH