Member Info for InJamesweTrust

Wallact
There is obviously a difference in economics but if you're nominally valuing a good medium sweet barrel in the ground @$8 hard to say Jethro isnt still worth $2.50-3.00 per barrel. Based on sizes of Jethro and feeder channel intimated that remains £1.20 plus to shareholders.
If you take $5 for the mega target that is a billion barrels that is an even greater prize £3.00 a share (if this is lighter and sweeter(
These represent about one third of the resource potential on Orinduik so there is much to play for in the new year.

https://www.google.com/search?safe=strict&sxsrf=ACYBGNShuB4k1IclePWdtpd5ArgvkPOoGA%3A1577697959312&ei=p8IJXsbZEsCm1fAP_M6ZkAc&q=fuel+oil+electricity+generation+soyhth+america&oq=fuel+oil+electricity+generation+soyhth+america&gs_l=mobile-gws-wiz-serp.3..30i10.55471.64193..65041...0.1..0.485.3078.0j9j5j0j1......0....1.........0i71j0i22i30j33i160j33i22i29i30j33i21j33i10i160.Nxhi5mUJ27o#imgrc=TVBpBVLTd6IAJM:

Latin American electricity generation by type is about 350m boe per annum for 200 TwH

That would be heavy oil that everyone tells us is useless. How many other such generating plants in South America...

Hannon
The buying will come from those who are comfortable that a Carapa find reads well for Kanukku block and for the Orinduik block Cretaceous. The value from both being significant to the MCAP.

So the Total deal, I know there is indication that Total and Exxon will essentially carve up most of Orinduik and Stabroek between them in 2-3years. Total have indicated a willingness to pay for value once reserves are proven up.
If there were to be 3 or 4 FPSO's on Orinduik cost to Eco would be $750m ,- $1.5bn depending on purchase or hire of FPSO. This is based on 15%.
So Total are paying (if value dictates) $7.5bn of the first $10bn in Suriname for 50%. Hence, carrying Eco for half of our 15% and likewise with total for percentage makes similar economic sense.
10yr NPV of Eco share of production is worth (@$35 free cash per barrel on 4 fields at 200pk bopd FPSO solution) is $8bn with another 10-15yrs of production potential beyond.
So on a free carry, Eco get $4bn over 10 years in a similar structure and split. That as a conservative estimate is $20 value per share but needs good news in 2020 to push us towards any reflection of this potential

Noix
I think you're right, Total have committed to pay 50% of sunk costs to date and $100m bonus if licence prospective. Further, if drills show the need they have committed to pay essentially 85% of the CapEx with Apache paying 15% of the first $7.5bn. That is a hefty sum to pay for entry.
Orinduik is more advanced in exploration stakes and success in Cretaceous will see many entrants keen to negotiate. It is well known Eco stake and some of Tullows is available and easing in to a 4/5/6 billion barrel basin as participant or operator with willing buyer/willing seller in a basin that can be cash positive in 5 years (acquisition and capex) is a pretty attractive prospect.
They need good news on Carapa and good news in our own Cretaceous drill. Tullow on their conference call I think indicated some plans would be advised in their mid-Jan update.

Guyanabased
With a $300m bond repayment due and an expected $150m free cash flow, Tulow need non-production catalysts to rerate the shares and bring cash on to the balance sheet. That is unlikely to happen in Africa short term so, Guyana.isntheir best bet. You rightly say they are not operator in Kanukku block so cannot control timing but they can do this in Orinduik make that the better game for them.

Guyanabased
It is but 3 months since the drill and 1.month since the official release of the news so the below sounds a little far fetched if you'll forgive my cynicism.
Looking at Suriname and Carapa on Kanukku and the Cretaceous potential I'd be surprised at no activity in 2020.

The Stena Forth is likely undergoing a periodic survey in Rio. She is then on contract in Q1 to Karoon energy (and Tullow) for a drill in Peru.
On Carapa - the drill has been going on for 60+ days now and is shallower than Jethro/Joe which took less time. The back-up rig may get through the earth a little more slowly but as they be guided year-end it should be fair to assume they are in the zone and testing now.
If it is a.dry hole you might take some samples and do little coring but not 10 or more days worth. That is probably an indicator of there being something worthwhile down there.
As for the 100p - news on Carapa, new CPR on Orinduik and drilling plans for 2020 could all be positive catalysts in january and see this above 100p. Possibly well above.
Look at Suriname - Apache are being carried for significant costs and what that does to a development scenario on Orinduik/Kanikku for Tullow. One gives them a carry through and one gives them debt freedom between Kanukku and Orinduik which would transform the potential of the stock - based on values bandied around on Apache.

Apache SP up about 12% min on a week ago, equivalent of c.$1.1bn MCAP on the news relating to Suriname drill. $1.1bn on one drill the results.of which are not yet disclosed. That is ALOT of value left on the table for little old Eco and the possible billion barrels we may have.

Harel
The wording could be construed both ways on looking again. As I read, Total will carry Apache for $5.0bn of the first $7.5bn exploration and CapEx spend they are due to spend, pay a $100m bonus and 25% of any share of CapEx beyond the $7.5bn and 50% of all costs incurred to date).
Even if as you suppose, Total are paying $6.25bn of the first $7.5bn plus so are paying $2.5bn for a share of a field with 1 drill presuming the drill proves up the need to spend such sums.
At these.levels as.operator Apache has little to lose by accelerating any find straight to production while it maintains operatorship.
Ultimately, Operatoeship will transfer to Total which demonstrates their appetite to take this region on and push production.

https://www.google.com/amp/s/www.nasdaq.com/articles/apache-total-announce-jv-in-block-58-offshore-suriname-2019-12-22%3famp
So a pretty good deal for Apache $5bn plus carry on costs that is a 4 FPSO facility kind of value.
This is from one drill so you have to wonder what 15% is worth if 50% is $5bn. Ignoring relative size of fields it does make MCAP of £100m look ridiculous.

Their yield is 6.5% so dead in line with the SP change which remains well within its yearly range of €13-16.
Additionally, Kanukku where they haven't released results yet is unlikely to be marked as €1.5bn value for a single drill in their MCAP of so Eco is woefully undervalued at £100m.
Such a transparent agenda.

JK
He dips into the Eco board now and then on bad news too. Cant see the purpose of it really but good luck to him.

Dont post much but the Shareprohets article looks quite misleading. Company has guided c.93% uptime if memory serves, producing 20k bopd over the 10yr life of the EPS at $44 free cash per barrel (so $65 oil) produces free cashflow of $2.99bn against a current MCAP and debt of c.$900m.
The NPV10 for a 10yr EPS is $2.02bn - increasing production to 30k bopd from 2022 raises the NPV10 to $2.74bn. The higher level of production requires extraction of c.95m boe over 10yrs from Lancaster field of c.500m barrels plus. For oil in place this is a recovery factor of c.4% from memory.
This equates to 90p a share on an NPV basis with significant Halifax, Lancaster and Lincoln upside in addition.

Think it is a mix of all factors combined but not drill related. Good to see we were not dragged down too much. The acting CEO for Tullow has her work cut out to shift market sentiment now as I dare say the severity of the fall was completely beyond what theyd expected/gamed internally.
Drilling is their saviour and being more savvy in communicating progress/position to market probably quite important going forwards.
On Carapa, I'd be surprised if they haven't been in payzone for sometime and sent some samples for initial analysis as well as now conducting appraisal as it is a heck of a long time for a dry hole (not tempting fate)!

Tullow seems to have two major assets that could attract fairly immediate financial bidders if news is good. They need to address debt and advancing the licences will drastically increase calls on their cash.
Given the above they cant advance one licence alone and the only control they have is Orinduik where ownership is highest. Advance this and they can sell down and still retain meaningful interest potentially with a carry freeing them to then sell some of Kanukku for a carry if debt is already dealt with from selling down Orinduik.
Time will tell but it is the only game in town for them.

Depends what the market takes more notice of, a good Carapa result indicating lighter, sweeter crude in the Cretaceous where seismic and fluorescence likely indicates we have plenty 2bn barrels plus of liquids or the 10-15°API if confirmed simultaneously.
Tullow is operator on Orinduik not Kanukku and can probably pull the trigger there more quickly than may be done in Kanukku. Proving up reserves quickly for Tullow is handy as it has been mentioned their debt is reserve based facility not production. It is also handy in capturing value for the block if they sell down.
They need to sell down on both blocks to allow development and get some sort of free carry in early phases of each Guyana as even once debt is paid down (from any cash consideration) their Free Cash Flow will remain tightly managed and wont rush to leverage up I dare say.
From the update call, they have c.$150m of CapEx unassigned. For $72m they could cover 3 wells on Kanukku and 2 on Orinduik and for $78m they could cover 3 on Orinduik and 2 on Kanukku. For the extra 10% cost of tipping to Orinduik they get an extra 60% of the spoils on the drills there due to relative holdings. This presumes $25-30m cost on Kanukku per drill and $30-40m on Orinduik per drill.
That to me is their quickest road to redemption.

I agree - I've mentioned before Hess have mixed messages with HH being closer to shore but Tertiary and heavier which is the cause - proximity to shore or Tertiary age.
Lighter Cretaceous oil is a good result for read across but it is not meant to link to Orinduik systems but would I expect give the market some relief.
I dare say there is some sniffing of core samples and or testing kit on board if feasible to get comfort with the type of oil. As you say Cretaceous less likely to see the same degradation as Tertiary and subject to higher temps/pressures.

Noix
Think Malcy is referring to proving up oil systems across the blocks, however from what I've read Carapa is thought to be a feeder channel to Liza and not connected to Orinduik systems - as much as one can be sure of source rock from seismic.