Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Someone quite active this morning almost though they are trying to deflect attention. Was something supposed to happen before today?
Ah yes the tried and tested well testing used in thousands of wells worldwide but seemingly a struggle to implement a few hundred metres from a busy road in Morocco.
Sound spudded their latest well on the 4th September by 9th January they had drilled to td, logged the well, perforated and tested the well and tied it into production facilities.
Mou 1 reached td on 6th July 2021 no testing yet
Mou 3 reached td on 27th June 2023 no testing yet
Mou 4 reached td on 11th July 2023 no testing yet
"It would be quite wonderful if all the posts only contained company related opinions/views.
It now seems the majority of posts made is all about personal point scoring, the bigger man etc.
I may well have thrown in a couple myself and i wonder what value it adds.
How about debating the company rather than the man as a new year resolution.
You never know you might like it but i suspect not."
Well done lasted 24 days. Over the last six months the biggest factor affecting the share price has been the testing. Delays have seen the share price fall to 8p and the new program has seen the recent recovery. People want and have the right to discuss this, yet the longterm holders are always labelling those that do as repetitive moaners. The biggest current pivot point is the testing, confirmation will likely see further strength in the sp and a delay will likely have a negative impact.
If people are happy to wait with no limits good for them, but there is no need to stifle those that wish to discuss it. redmonkeydave has been hounded off the board this week for daring to suggest that a 10% fall might be concerning maybe some tolerance for different views is required rather than petty name calling.
Jimmy
For most companies that would be true, but PRD have usually not informed the market that testing did not start until weeks later. They specifically said in reference to Octobers testing
"Rigless testing MOU-3 using conventional perforating guns is currently forecast to begin on or before 16 October 2023, assuming that the wireline logging unit is released from its present contract on or before 10 October 2023. The Company will provide an update if there is any change to this date"
The update that testing had not started was issued on the 7th November. Once bitten, twice shy.
The past performance of missing three previous testing timelines means that PRD are not in a position over whether they do not inform shareholders that testing has started. People will rightly assume that if nothing is released then it has not started and as each delay has led to a fall in the shareprice then the shareprice will likely fall in anticipation of a further delay. Lets see how much value they really hold to "loyal" shareholders.
As expected the CM workover figures are meh, decent returns only start to come with new drilling at a cost of $3m per well and not planned until 2025. Netbacks confirmed at $19 which I have always used unlike the $40 some on here where touting. Still think CM is a needless distraction.
Lets get the testing completed in a timely manner, there cannot be much slippage in a date planned for 13 days away. Good to see the expected release of a new resource estimate for MOU including the new wells should be a decent uplift in figures as results exceeded expectations in the previous cpr.
Mou 3
https://dataspace.copernicus.eu/browser/?zoom=18&lat=34.32132&lng=-3.38545&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-01-10T00%3A00%3A00.000Z&toTime=2024-01-10T23%3A59%3A59.999Z&layerId=2_FALSE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=98&dateMode=SINGLE
If you scroll back the dates it looks like there has been a change in the last couple of days. It's blurry and I have previously thought that there have been changes when nothing has happened so it could be anything.
Excellent post from ROB absolutely brimming with facts, still waiting for the breakdown of how "modest" oil sales are going to generate £50m in free cash flow. Looks like he is slipping back into his gkp days of posting for ticks rather than facts.
@Keithoz the CM deal has pushed back the drilling program for Morocco into the second half of the year and as Jimmy posted last night the workovers are going to be generating say $2m a year which is not going to fund much. Still waiting for someone to post these significant free cash flow calculations. TXP have spent millions and not achieved this.
The information does not refer to netbacks it refers to net revenue of $39 a barrel after taxes and various other deductions. From this net revenue figure production costs need to be deducted to get the netback figure.
" In total, the Company's operations in Trinidad and Tobago generated an (unaudited) pre-tax operating cash surplus in Q1 2022 of approximately US$0.2 million."
Hardly generating much free cash flow from double the production of PRD expected first workover, combined with the extra 7.5% hofo payment PRD have its not much to get excited about especially as the oil price is $11 a barrel lower currently.
I had assumed brent prices getting WTI is disappointing as this is usually lower than brent $5.5 lower today.
I would like to see these assumptions from very modest oil sales that are capable of generating free cash flow of £50m.
Using TXP $19 boe netback it is going to require in excess of 5000bpd to achieve that unless GRH knows something different?
At the current $77 a barrel full brent crude price it would require nearly 1800bpd to generate anywhere near the current m.cap in pure income alone, no production costs or taxes.
Neither of those figures are "very modest". Would imagine the costs of getting there are not very modest either.
They did. They expected to issue it in December 2023 and this goes back to the point. Why not just issue it without giving a date no one would be any the wiser but instead they again gave a date and missed it. Compounding past failures, they are creating a narrative of unreliability of their own manufacture.
They could have simply not repeatedly given timeframes they failed to meet. All the excuses for delays such as ROBs below but no one held a gun to their head and forced them to issue dates. If things are out of your control then do not give dates. Simple as that and all the excuses in the world cannot hide the fact that they failed to learn and repeated the same mistakes.
The Morocco government must have a far reach if they have stopped them from issuing the T&T report in the timeframe given or are the Trinidad government in on it as well.
Why? What is this high level of trust based on?
I can understand people having faith but posters saying they trust someone who at most they have spent a few minutes alone with at an event with the sole purpose of selling you something is a bit strange.
Can you not just adjust your level of investment to a suitable level. Paul has spent 40+ years in the industry no one thought he was worthy of a senior management role, he had to start his own company to achieve this. I adjusted my initial investment to reflect this.
The requirement that "absolutely" trusting directors is one of the most puerile comments on these boards. Companies have folded with posters repeating this mantra. Basing this on gazing into someones eyes when they are at an event where the principal purpose is to get you to invest in their company is asking for trouble.
Paul has presented at an investor presentation, included in a prospectus and released in numerous rns various dates for testing and meet none of them. If people are still "absolutely" trusting after that, then each to their own. Others are allowed to be sceptical following that.
Had a quick look at TXP it seems to me that they are planning 9000boe/d similar to PRD at CM. To get there will have taken them four plus years well over $100m spent and left them with $25m in debt. I have no investment in TXP and do not plan to either on that basis.
As I have said I will wait to see the technical report on CM but I think it's a distraction and the funds would get more "bang for your buck" used in Morocco. $2m would come in handy for fully testing the MOU fan at the minute.
@KeithOz that's taking on debt though and not free cash flow. Would imagine with the waxing issue any lenders are going to want to see consistent production over a period of time, plus they have agreed a new well in T&T as well which is also requiring finance.
As said yesterday I do not understand where this CM free cash flow is coming from. The workovers are targeting 100 to 200bpd, TXP have reported operating netbacks of under $19 a boe. PRD has an extra 7.5% hofo payment on top. 150bpd at those figures is going to return around $1m a year. That's not going to fund any wells in Morocco.
The reduction in the planned testing also seems to have arisen when the extra $1m payment to T&T authorities was required immediately rather than six months down the line as agreed with CEG.