Member Info for highlandmatt

Reported cases in China down to around 20 a day now. Hopefully that means that economy and therefore demand is recovering. I topped up this morning. Last years dividend was 14.5p, so now a 10% yield if maintained. Obviously hoping for long term capital growth, but this is as safe a place as any right now.

40-50mmcf/d @$2 = approx $20/year.
So crudely this well on its own is worth $200m on gas alone. Condensates are extra. That's £150m mcap.
Hold those shares tight. Revenue from Coho in 6 months.

@Nickel You've not answered my question. No analysis of selling prices vs production costs to give margins? No assessment of cash balances and cash flow? Thought not.

Nickel - Could you please share your evidence and calculations for this?

I found this useful, but then, I know very very little about the technical process.

https://oilprice.com/Energy/Energy-General/The-Ultimate-Guide-To-Well-Logging.html

$10m for 12.5% would fund the Ruvuma capex, leave some for leveraging other deals, and still leave us in Ruvuma to reap the rewards post development.

Sorry John. @ Northern.

John. $10m for 12.5% would be tempting. Plenty of working capital to fund Ruvuma capex, some to leverage another deal, and still in Ruvuma to reap the rewards post development.

Topped up again. £60m market cap is crazy, only just covers Coho. 'Be greedy when others are fearful'. Down 40% with all development to come? Bonkers!

Ha ha.

When I was at uni I had a friend who was a chemist. He had an official published list of elements and their health hazards. H2O was listed as a potential carcinogen.

No information to that end, other than originally ascribed lower COS than Coho and Casca. Just not including them in my estimated valuation for now, for risk management purposes. Don't want to assume success and be accused of ramping.

I'd settle for that. Approx $15m /yr revenue from that zone alone. With other zone, Coho, and condensate = $40m = £30m = £300m mcap. With Chinook and Royston to come....

Getting to the point where a bad deal is better than no deal?! Both parties want a deal, but suspect we want a lower price due to lower revenue.

Ok, I've put my money where my mouth is. Given that:-
- I calculated that existing production plus Coho (on stream in 6 months, cash for infrastructure now available) would be worth a market cap of £70m,
- that is where we are now;
- and we know Cascadura is commercial (in spades!) on top of this.

I've topped up, as I reckon with a positive result on the Cascadura upper zones, and the value of the condensate (anyone have a figure for this?), I reckon a target market cap of approx £250m. That's with Chinook and Royston as dusters, which I'm hoping at least one will hit.

Also, at a basic level, this was trading at 55p, less than 11% dilution, but it's gone down 20%. Oversold in my view.

I reckon Shore will issue a broker update in a couple of months once Cascadura has been fully tested.

Hi Dana.
Ok, no bother. Understand your post now.
Happy holding long term here and enjoying the good discussions.

I used a calculator, and a comparison with another company I have shares in that has/had a gas well producing 15mmcfd @$3.2. So I just used their income numbers and took off 10% for pricing, and then another 20% for 12mmcfd vs 15.

@Dana. Good point, the cash will add to balance sheet and therefore mcap temporarily.
It will however be spent, but hopefully on something that further increases the balance sheet.
Just a small point, it's $9m, not pounds. It's £7m in sterling, so will be fewer shares (I think 18m).
However, it doesn't change the premise of your post.
One thing is for certain, if there are any shares being offered tomorrow at around 45p, I think there will be a scramble to buy them.

Ok, spectacularly bad timing given the placing, but have updated the numbers below...

I know this is back of envelope stuff, and requires a few assumptions, but just thought I'd have a go at working out a rough future market cap, based on what we know already. Feel free to add to this or correct:-

1. Current oil production c.1700 bopd covers overheads and a certain level of either declines or developmental drilling. Turns a small profit of a couple of $m / year. = not much value, and probably the £20m mcap that we sat at last year.
2. Coho. 12mmcf/d gas. Based on selling gas for around $3, maybe income of $7m / annum. PB states this goes straight to profit, as no infrastructure costs.
3. Cascadura is twice as big, as tested so far, so another £14m / annum, just for the gas, ignoring the condensates.

So, even ignoring the underpinning oil production, condensate byprodust from Casca (!) using a p/e multiple of 10, the two new gas wells will bring in $21m/yr in profit, so are worth $210m on their own.

That's £157m or 87p (now there will be approx 180m shares).

That's without the upper zones tested at Cascadura, without the condensate, and without Chinook and Royston.

Looking forward to the rest of 2020!

I'm thinking PB wants that new CPR for all of Ortoire ASAP.
Then the infrastructure can be planned, and a new NAV published.
Will we see a 'for sale' sign by the end of 2020? With all the particulars laid out for a turnkey large scale O&G resource?