Member Info for highlandmatt

Great interview. Got the answer I was looking for re wells/injector. Paul says look at production, not pilot flow rates. Even at pilot rates of extra 20bopd per well, 5 wells gives 100bopd = $1k /day = $350k / year. 3 projects would give £1m profit and cover the market cap. 6 projects = $2m profit and mcap of £16m (double now). That's just T&T. Morocco and Ireland in for free at the moment. All 3 projects mature in 3years. If Morrocco hits, that's a couple of hundred market cap. I think this is one I'll be loading up every month.

Indeed. The presentation says it is portable as well. So can it 'charge' a well for 3 months, then move on?
If we said a max of £200k for each set, that is still a 30% ROI for each set per annum, assuming it has to stay still for a year.
Cheaper sets (economies of scale), being able to work more than one well a year, all improve that ROI.

Hulltiger - yes, breakeven is stated as $7.

Hi Zebra, Just been crunching numbers myself. The business case is set out on page 24 of this presentation:-

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2020/07/30070921/Corporate-Presentation-29-July-2020_FINAL-DRAFT.pdf

Essentially, the kit cost $600k capex investment (but includes contingency for a second injection set).
The netbacks are $23 / barrel at WTI $41, and apparently $10/ barrel after operational costs, royalties, taxes etc.
The increases from the two wells have been just over an extra 20bopd in each case.
So, one well generates net profits of $200 per day, so if assume 300 days operation, then $60k per annum profit.

What I am not clear on is:

1. How many wells an injection set can be used on in a given period.?
2. How much of the $600k is for the injection set, so representing the marginal capex for each expansion of operations?

Does anyone know this?

Thanks Zebra. Even better. I'll go back through all the RNS and presentations again, see what I can find.

$40k from one well in 3 months. $160k per annum. If we assume $100k per well, then every 10 wells is $1m. Do we know cost of kit per well and therefore ROI? Apologies, on my phone and on a VC.

MEM - Indeed. Imagine you own a declining oil field. The choice is capex for reworking wells or drilling infill wells; or, PRD will bring its kit and expertise and split the benefits. You get money for nothing. Which would you choose?

I've just got home from work and am surprised by the share price given the RNS. Given that the stated aim is not to own any oil fields, it should not be a surprise when the CEO decides not to buy an oil field. $40k of oil from one short pilot well is a good result in my book. The scalability is clear to see. SP movement around 2-5p is irrelevant in the long run. Look at the market cap. Will this be a £10m mcap company in 3 years time? I think not, and will continue to accumulate.

Income and positive cash flow is gold dust, and even if the aim is to sell the CO2 EOR business, then we need to scale it up to get a good valuation. However, I can see a small team running the EOR business, moving from field to field. Paul can then concentrate on other things.

T&T might be a slow burn but it looks like a good income source. Think we need to stick with it for a while yet, unless shareholders want dilution and loans to pay for ongoing costs and development?

For reference point, everyone should look at the Cascadura well drilled by Touchstone. Possibly 0.5TCF, company making, and valued at $250-$850m. Not yet in production, but added about $100m to mcap so far. That's a lot when you have an mcap of £7m as PRD does (14fold).

For the risks, see Aminex. 2TCF discovered, mired in bureaucracy developing it. Mcap down to less than £20m.

It is quite clear to me that prep work has been ongoing by AEX on the seismic and drill, hence the $2m loan for 'costs incurred', which would be payable under the FO anyway. It is more like an advance than a loan. If need be, this could continue. I think ARA / APT/ AEX are getting on with the drill in the background, and the FO just makes the funding cleaner.

If the price is different to the original, Paul has to negotiate this with the 3rd party. I'm sure there would have been negotiating parameters, but what if the 3rd party funding had to be renegotiated as well? That's then 4 parties (BCP. PRD, 3rd party, 3rd party funders) and lots of moving parts. Happy to wait.

Maybe that is the conversation that has happened with the government? Sign off the FO, or forget it, we'll do it this way, and have our $2.5m back please.

...and AEX subcontract the work to APT?

APT have had the right to terminate 8 times so far, every time a Long Stop date has approached. They haven't pulled the trigger before, so why not? 2trillion reasons?

Mick Dundee? Crocodile?

Very true Dunder (which autocorrect changed, apologies, unless you want to be known as Mick?). I had a top-up yesterday at .45 on the thinking that there is still a huge asset and cash in the bank. The next couple of months will tell.

Dundee, that is a risk. If folk reckon this is red/black 50:50, then I think the rewards on the upside outweigh the loss on the downside. So, if it is equal risk, theory says you should buy, but be prepared to lose. Buffet said be greedy when others are fearful.

Aminex is not going bust anytime soon. Remember, this is apparently the Zubair's investment vehicle.