Member Info for highlandmatt

https://twitter.com/sadaatumar/status/1507318935582134272?t=bn6JfYY8nH6f-gOPeOMzGw&s=19

So, what does he know...?

Better yet, keep it down to the new ISA period.

Lonny Baumgardner
@lonny1971
·
26m
I don’t know if MEM is on Twitter or not but I was sad to read today that he is leaving the PRD BB. He obviously knows best what’s the best for him, or her but I just want to let him, or her know that I receive a lot of horrible feedback about my posts, often very personal.

Those very few are not going to deter me from engaging with my bosses, which are you all.

I take the good with the bad gratefully, everyone is entitled to a opinion. Please don’t let a few clouds get in the way of your sunshine.

Sorry to be losing your valuable input for a while MEM. Hurry back.

Thank you Kasjnaton. That explains a lot. I suspected GRH had access to the satellite seepage surveys, but now it appears he owns the company.

And there will be challenges like Chinook, and water cuts and stuck tools at Royston. But even Royston 1 will pay for itself in 2 years in revenue, and the knowledge is invaluable to target more of those 100m barrels. It's certainly not a failure.

Progress on prepping for Morocco drills is good, but I also noted 'the next CO2 EOR project with Lease Operators'. A small amount to initiate potential revenue generation in T&T, and spin out in to JV. Don't forget we are owed cash by FRAM. Maybe this was promised, but now delayed?

Looking at the SP, you would think that Royston has been a failure. However, rereading the RNS:

1. "... While conducting the test, approximately 2,200 feet of pipe and perforating guns were stuck in the bottom portion of the well, not allowing any further testing of the deeper zones. However, with these constraints, the well has continued to deliver both pumping and flowing volumes from the uppermost 84 feet."

2. "Combined with the previous test in the intermediate zone, the well has shown that the completed intervals are capable of producing over 675 bbls/d of oil. Produced oil is being sold at our Barrackpore sales facility, and all associated water has been separated on-site and reinjected at our water disposal facility. We anticipate production testing continuing until the commencement of future drilling operations at Royston."

3. "...The estimated additions of both future net revenues and reserves at the newly discovered Royston light oil pool are reflective of our successful drilling activities in 2021 and the considerable size of the prospect in the Herrera Formation. The initial Royston reserves evaluation was conservative, given only one well was drilled to date and no reserves were assigned to the subthrust sheet. We have two exciting opportunities to substantially increase reserves in the area with the Royston Deep well intended to evaluate the subthrust sheet of the Herrera Formation and the Kraken well targeting the deeper Cretaceous Formation.

Conclusion
The bottom zone ('Intermediate' - 30ft) tested 360bopd, so the 'upper overthrust' (56ft) is producing 300bopd. At netbacks of £33 (to keep the maths easy) that's $10k per day or $300k per month. It's like having Coho on stream already (why Paul was not worried about Coho at a previous interview?).

No reserves or production potential has been ascribed to the middle zone (lower thrust sheet), probably due to the 90% watercut. However, that perforation was 270ft high, so it is possible that a smaller perforation higher in the zone could produce. With two more wells planned to penetrate Royston looking at the lower targets likely to be optimised for oil, even if these miss, it is likely further production will be brought on stream from those wells.

The market was obviously expecting 1000bopd (as guided by Paul) and only got 300. The market was also expecting a big reserves upgrade (I was as well), but only got 2-4% of Royston. It seems to have completely missed the 120m+ barrels (up to 200m?) in place. Given the NPV values in the report are based on this low recovery figure for Royston, NPV - 1P (Proven) = $475m/ £350m (165p/share) , 2P (Probable ) = $881m / £650m (£3/share), 3P (Possible) = $1.31m / £1b (£4.70/share), there is plenty of 'running room'.

The market is also potentially 'risk off' due to Ukraine. If that is resolved, there could be capital inflows to the market again. ISA allowances restart in 3 weeks time, which might help as well.

See Green Hydrogen mentioned in that article. Coincidence PG just announced plans for this? Also, this caught my eye in the RNS:-

"The Company's projects can create access to infrastructure and to potentially significant volumes of future surplus gas, particularly at times of lower prices during reduced seasonal demand, with which to be in a position to produce cheap gas-fired, using its own surplus gas feedstock, well-site electricity for green hydrogen as a replacement for carbon-intensive fuel oil during the Energy Transition."

'Surplus gas feedstock, well-site electricity'.....Guercif (our only well site?)? Surplus gas? Have we gone from a small CNG operation to more gas that we can sell?! Intriguing.

'The stock market is a device for transferring wealth from the impatient to the patient'. Buffett.

'Lochnez my interpretation is that people become sick of working with Griffiths and b******r off.'

Possibly. Or maybe it is the other way round? Maybe PG asks folk to leave if they are not doing anything useful for PRD? We don't know, so are just speculating.

What is not speculation is that we have:-
- a CEO and COO with in depth knowledge of the region and good track records and capital discipline,
- the best analysts in the business stating that MOU1 is a gas Discovery,
- a CPR stating contingent reserves well in advance of the company mcap,
- a large licence area, in a safe jurisdiction close to countries wanting energy,
- lots of confidentiality agreements in the background,
- new reputable financial advisors
- a bulletin board full of knowledgeable folk, successful investors, that are putting forward compelling evidence of success

Nothing is guaranteed, but you research the odds, chose your play, and wait.

Phil - no, you are not missing anything. PRD is undervalued.

'You are not sanctioning me, I'm sanctioning you'.

Joey - I think you'll be fine. TXP doesn't need to raise. Even 250bopd from Royston EWT adds approx $300k per month (at $40 netback). This bridges the gap to Coho nicely. Not sure about the Kraken issue you refer to?

Maybe Staley has made all the critical moves and introductions already, so 'my work here is done'. Or maybe he just wants to retire, spend more time with family, or has another startup project that takes his fancy? Who knows.

Petermac - thank you.

GRH - I must confess I haven't seen any reference to 'levant' or 'libank' in either the corp update or the Novum note. Where is this, please?

Thanks KS. Always good to have professionals to keep us straight. Yes, I'm using the wrong terms, but my mind thinks about 'operating profit' and 'bottom line profit (or loss)'. I guess my preference comes from working with companies (and charities) that have a habit of being profitable on their operations, but forgetting to contain their overheads, so end up cash flow negative. Hence my preference for looking at the absolute bottom line, as often these are not discretionary costs (unlike TXP exploration), and threatens the viability of the organisation.

Thanks KS. G&A costs aren't massive - if TXP didn't explore (2x deep wells /year at $7-8m = $15m?) it would be quite profitable. At the moment all the profit (plus loans) is going in to exploration (very successfully, and a great ROI) , so hard to get a value based on profits currently. In some respects it is tempting to just use the NPVs and NAVs in the Reserves report and broker notes as the calculation of value (I count myself as a value investor). And I note that Canaccord has reiterated its £2 target price.

King Suaraz - Yes, I am deliberately conservative. This is partly because I have a risk in my mind that I might not fully understand the relationship between netbacks and royalties/taxes, and therefore profits. If anyone has a link to an explanation, I'd be grateful of the chance to further educate myself.