Member Info for happysparrow

See MT's posts yesterday on Advfn - the problem is the warrants; that's what's keeping the price low (rangebound at 18p) currently.
Watching and waiting here also.

Thanks, KS. Very helpful; but far more complicated than I ever imagined. I'll try and work through it all. And though in your comprehensive model post tax cash flow is reduced to about $100-£120m (not the $185m I naively calculated) at maximum capacity, very happy that you too arrive at this supporting £2 a share minimum once at full production due to a more favourable multiple of FCF to mcap. Thank you.

Thanks, Sturm. Slowly reached that conclusion just as you were posting.
Maybe I should try emailing TXP to see what different netbacks after tax they use themselves for gas, condensate and oil?

Answering my own question:
a) it seems Cascadura will be worth 200p a share to TXP when it is producing at 200MMscf/d under the current pricing structure.
b) the netback for gas (in a heavily taxed regime) of $15.26 a barrel is very poor at the negotiated price of around $2.50 a unit. Hopefully future negotiation will bring a better price - and lower taxes.
c) the netback for oil is considerably more (operating netback in January presentation was $40.23 - mostly legacy oil + some Coho gas). Hence Royston, if successful, will bring both near immediate cash, and at a much better netback equivalent rate than Cascadura gas.

Playing with figures - some more sums:
From RNS of 6/3/23 we get 5.7MMcf/d = 955 boe/d.

Thus guidance of 60MMcf/d / 5.7 x 955 = 10,053 boepd for which we get $56m FCF after tax.
Thus 200MMcf/d / 5.7 x 955 = 33509 boepd for which pro-rata we get 56/60x200 = $186.7m.

However, they seem to be suggesting an after tax netback of just $15.26 a barrel [ $56m / 365 / 10053 ] ??? Is this calculation of mine correct (I often get it wrong)? And why so low?

If we put this into the 3 times FCF calculation of my previous post we get:
200p share price needs $185.62m annual FCF after tax.
$185.62m / $15.26 netback per barrel / 365 = 33,325 boepd production needed to justify a 200p share price.

Again, Gingmunger, interesting to know how you calculated a netback after tax of $22.5 per barrel. And why is TXP calculating only a net $56m from 60MMcf/d production?

Thanks, HM. Panic over. Doesn't look impossible at all.
Have just done the calculations too, working back (my small brain got there eventually):
200p a share / 3 x 233 x 1.195 (£/$) = $185.62m annual FCF after tax.
$185.62m / $22.5 netback per barrel / 365 = 22602 boepd.

Or, to put it another way, do I need to be looking at an annual after-tax FCF of $186m to justify a 200p share price? And, working back, what level of production do we need from Cascadura and Royston combined, to achieve $186 FCF after tax?
Grateful if someone can put the full sums down here. Thank you.

Ginmunger - interested to know how you calculated after tax netback of $22.5 (operating netback in last presentation was $40.23).
I note that Flavourshaker on a post on LSE AXL (6/3/23) was using a rough calculation of shareprice based on 3 times Free Cash flow to Market cap.
Using such a calculation, I calculate $100m FCF after tax, with 233m shares will give a share price of $100 x 3 / 233 / 1.195 (£/$) = 107.7p per share.
This is nowhere near the 200p+ share price I have come to expect for such production success. As they say 'Am I missing something?'

Good discussion - and explains why, despite Royston, we might not see much of a rise in share price until Cascadura comes online (no doubt shorters will use this 'fear of a raise' to bring the price low until then).
This is depending more and more on NGC getting it's act together. Let's hope too, that at the very end the Ministry doesn't put it's oar in and ask for an independent safety report (as with Coho). Such a report, if needed, can at least be done on Touchstone's facility work before NGC has finished it's pipeline (and perhaps much of NGC's work can be inspected concurrently throughout construction rather than starting after completion?).
The raise at an unacceptable low price was disasterous for the shareprice; and has only just recovered to where it was before the raise, and that's despite all the good news since, including a potential large find with Royston-1, and maybe adding 10,000 bopd in 2024; (all of which inspired me to invest heavily at 114p a share for back in November 2021 - what a poor decision that turned out to be.).
Shareholders, Media, and Touchstone directors need to keep the pressure up on NGC and government to perform. After all, their people need the gas badly - and politicians want to be re-elected.

Also of interest?
https://trinidadexpress.com/business/local/methanex-hopes-to-get-new-contract-from-ngc/article_761322de-bd55-11ed-8a51-bb222d5b3163.html

Mr Curtis Williams again (thank you):
https://trinidadexpress.com/business/local/crude-oil-could-soon-flow-from-touchstone-s-royston-discovery/article_076699c4-bd55-11ed-98f6-a7909c6d6dd3.html

https://www.guardian.co.tt/business/dr-priya-marajh-you-have-to-be-prepared-to-make-a-space-for-yourself-6.2.1648397.8a0a909fa1

Thanks, Scott. A great help.

Thank you HM.
I note too that Thommie writes on the other board:
'.Their seismic seems to be spot on at royston. They exactly did what they planned on: aiming at an updip location of the intermediate sheet, they achieved that and encountered the net sands in that updip location 340feet higher than before, also they were able to go deeper this time, identifying additional net pay of 310feet into the deep. They speak of another 125feet net pay that might be in a different sheet even lower that maybe isnt connected to the rest. But it stays unclear, if they ended the drill still being in pay or not. No comment about that....'

Seems my concerns are not warranted? Hopefully not.

Question?

I found this of interest: 'Drilling samples and open hole wireline logs indicated that the well encountered a significant Herrera turbidite package with aggregate estimated thickness in excess of1,660feet. The Herrera turbidite section was identified at a measured depth of 9,558feet, approximately 330feet structurally higher than in the original Royston-1 well and penetrated approximately 310feet of Herrera section below what was observed in Royston-1. The overall Herrera section drilled in Royston-1Xcontains approximately 765 net feet of sand.'

I read this as they started to find the productive sands at 9,558 ft, and stopped finding them a little after ('in excess of') 11218 feet. It was drilled to a TD depth of 11316 feet.

' the hydrocarbon indications internally interpreted from open hole wireline logs, which show that the well successfully intersected the Herrera Formation through the subthrust level in one of the thickest turbidite sections observed in any of our previous wells.'

This is from the RNS of 2nd Feb: 'Royston-1X is a sidetrack well reentering the previously drilled Royston-1 well and is expected to be drilled to a measured depth of 11,300 feet, targeting hydrocarbon accumulations in the Middle Miocene Herrera overthrust, intermediate, and subthrust sheets.The Royston-1 exploration well was drilled in 2021 to a total depth of 10,700 feet and identified over 1,000 feet of Herrera section in the overthrust and intermediate sheets, encountering light, sweet crude oil in both sheets. Touchstone is targeting to drill the Royston-1X well through the previously tested Herrera sands to penetrate new sands at the base of the intermediate sheet and into the untested subthrust sheet.'

Thus, is it fair to assume that we will be testing sands in the overthrust and Intermediate sheet, but we found no productive sands in the subthrust sheet?

Does this have any implication for Kraken?

Domus - well done for your 'expectations' of TD this week. Bang on the ticket. Anything else you can add?
Maybe we'll get an interview with PB today - though careful not to over-egg expectations at this stage.

Mr Curtis Williams has been helpful again (Thank you):
https://trinidadexpress.com/business/local/ngc-delays-touchstone-cascadura-gas/article_708ab912-b7c9-11ed-aee5-57a0822d2672.html
https://trinidadexpress.com/business/local/ngc-holding-up-multi-million-dollar-investments/article_93a5ce46-b7c9-11ed-8824-43ba4321c87c.html
https://trinidadexpress.com/business/local/more-bad-news-for-imbert/article_d5559534-b7c8-11ed-9d7e-9bd9c44d0218.html

https://trinidadexpress.com/business/local/eog-resources-reveals-trinidad-gas-prices/article_d0eb2cc4-b57b-11ed-a17c-377954832f42.html

'IN a blow to the Government and the National Gas Company’s (NGC) continued efforts to keep the price it pays for natural gas from upstream companies a secret, EOG Resources has revealed that, last year, they sold its gas to the NGC for US$4.43 per million standard cubic feet (mmscf).

This means, in 2022, it was significantly more expensive for the NGC to acquire gas from EOG and sell it to the petrochemical sector.

The Government and State-owned NGC have always tried to keep the price they purchase natural gas as a secret, arguing it negatively impacts the country’s competitiveness. Still, EOG has consistently been transparent in its earnings out of Trinidad and Tobago.

In its financial statement for 2022, the American outfit said the US$4.43 per mmscf/d is higher than the US$3.40 it earned in 2021 and the US$2.57 in 2020.

On the downside, however, the company noted that its production dropped significantly, down to 60 mmscf/d in 2022 when compared to 2021.

Figures from the Ministry of Energy show EOG producing 320 mmscf/d with a significant fall between May last year and November 2022.

In its notes that formed part of the financial statement, EOG revealed, that in the third quarter and full year of 2022, the realised natural gas price for Trinidad includes a one-time pricing adjustment of $3.37/mcf and $0.76/mcf, respectively, for prior-period production following a contract amendment with the National Gas Company of Trinidad and Tobago Limited.”.... '

I understand we sell Cascadura Gas to NGC at about US$2.50 per mmscf/d. Thus NGC's delay is causing financial loss to the country. They are foolish to allow this delay to happen; and as with the environmental agency delays this time last year, the man responsible, Mark Loquan, needs to be called out for public shaming, and pressure brought to bare on him by the Ministry.

It also demonstrates the opportunity for TXP to negotiate a higher gas price.

[PS arrived back from S.Africa this weekend - family problems at home. Otherwise, great time working with animals. Best wishes all.]

I'm quite fond of cats, too, Sturm - all living things (apart from some humans). They can be trained to leave the birds alone to some extent (as natural instinct) - too, don't put food out where cats can catch the birds.
What I'm not fond of is hunting (nor Dentists, on the best of days,MJ - a Dentist/hunter the worst of all folk) - accounts for about 25 million bird deaths each year in the mediterranean - completely unnecessary: https://www.theguardian.com/environment/2015/aug/26/conservationists-appalled-at-illegal-killing-of-25m-birds-a-year-in-the-mediterranean.
This, too, is pretty grim reading, if you've got the stomach for it.
https://www.galgoamigo.com/the-plight-of-the-podencos.html
Humans, eh?

Aligator, another enthusiast! Yes, love it too.
My favourite was looking after big cats in Ambue Ari, Bolivia, with IntiWaraYassi - pretty tough in the rainy season (probably too much for me now, at 66) but excellent (Jane Goodall recommended)- and not expensive, though very basic. The one I'm going to in South Africa is African Dawn, Thornhill, near Port Elizabeth, SA. Looks a more gentle option - about 250 species, mostly birds (see facebook site for photos), but perhaps cheetah if you stay longer, and again, for Africa, not too expensive. (It was recommended to me by someone at a wildlife hospital I use to volunteer at - they added 6 months to their stay, so speaks for itself, hopefully).
If TXP comes in big, I'd really like to take myself off to Trinidad for some months too, to visit the Asa Wright Nature Centre, and the caroni bird sanctuary of course, to see our very own Scarlet Ibis: https://caronibirdsanctuary.com/
[Apologies to non-enthusiasts for off-topic.]