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He did but preso says coiled tubing available end April. Think it is easier to push through customs than a tonne of sand though (thought Morocco would have plenty of that!!)
He mentioned they will get the Sandjet equipment in mid-April - so that depends if he meant on site or in country.
Fox Davies has the wireless testing results scheduled around end April.
The coiled tubing is stated as end April though on preso which is a bit different to what he says himself.
This makes me rethink my own dates of late April/early May for results. More to early-mid May at soonest.
Got to love O&G timelines but only 9 months after originally proposed date because eyes were off the ball!!
The bold
I'm curious where your dates are from on rigless testing? Thanks
Let's look at CNG, if gas flows there is an agreement ready-to-go for gas sales where 120bcf nets $1.56bn. Now, if flow rates are in excess of that expected it be 2-300 bcf that is contemplated for sale.
That might be 3% or less or the prospective resources (outside Mou-5) and if allowing sale of 3% for a material amount allows 20-30x that to be proven.up I'd say it constitutes a good deal.
Added bonus if it yields a divi/puts a stronger base under the SP. That could be the case after Sandjet so end April/early May if targets met.
Gudin
The idea being, if majors aren't biting (500 TCF isn't enough it seems!!!) Then using PE to fund CNG and share profit along with an upfront fee allows PRD to drill, test and prove.
Only hope the test bit is quicker than in the past or I'll be PG's age by the time they finish it on 25 years.
Should add that despite the delays the potential reward remains strong just extended timelines continue to frustrate a bit. Even taking into account usual O&G fun and games.
wouldn't advocate the hoopla that existed around sound and talk of golden tickets. many people lost a significant amount as a result of it.
nor would i advocate telling pis to **** off somewhere else if you don't like management taking their eye off the ball by their own admission leading to delays currently running around 7 months to proposed sept testing.
i'm sure there is a happy middle ground.
as for pe, if grh knows something he is then an insider otherwise chat about bank managers being happy soon, goes along with his sept pronouncements about imminent.
we don't know the timings but management shouldn't be obstructing them with lack of attention.
things can move fast and change quickly so let's see what april brings. hopefully.testing, finally.
EC6
Can be funded by anyone with deep enough pockets and the appetite, knowledge.
HMatt
The $1.56bn mentioned by PG is gross based on $13 per mscf. So over 120bcf it comes out at $1.56bn.
That's gross so you could take out a reasonable chunk depending on costs incurred/price at wellhead and then work out what PE need as a return and discount further to reflect.
If it flows well then the aim may be for more than 120bcf and fund through a PE deal for upfront cash and rev share or just straight cash in two stages, development then main chunk once taps are opened.
How many well heads and mscf pd are needed to achieve the $150m net......
Assuming net revenue is $150m on a 10yr NPV12 it is $847.5m by my reckoning.
Suggesting a TSR is replete with potential for brickbats and ridicule but we are all in this for a return on investment from the current price label or we would have sold.
How much will that be - £15 would be great but is over time. J23 mentioned around 2.5 TCF if I recall in response to the 7 TCF and if I'm right MOU-5 looks bigger potentially.
So if they can prove up the CPR best estimate of 700bcf it is probably worth a couple of quid a share. With ratchets for proving up by further drilling this could easily see further payments down the line.
What would 5 TCF br worth?
So someone asked if MOU-5 might produce $14bn in gross revenues and Paul confirmed the potential. PRD as an early seller would be lucky to see 20% of this. That is a fiver a share.
For other areas Paul suggested 120 bcf under CNG would produce revenues of $1.56bn. Not sure od this but even at $1bn per TCF instead of 80bcf that is another $2.5bn taking costs out is maybe 60% so 1.5bn or another £3.
I'd reckon above is pretty blue-sky thinking for now but there is definite potential.
Suggesting a TSR is replete with potent
Just listened myself, not apologising for delays since September scheduled Sandjet because he took his eye off the ball for a couple of months is hubris indeed. If looking to attract partners, such belligerence serves nobody very well.
This also pushes back the CNG.
The small guns tested the minimum amount of formation damage but little else, this doesn't seem like $0.75m well spent as we know it is >12inches but Sandjet is budgeted to so up to 60 inches.
The maths to go from 120bcf to 7 TCF isn't hugely clear to me.
He can berate London as a 3rd tier market but the market wants testing not jam tomorrow before ascribing value.
While NuTech may ultimately prove useful for number of zones to test and where it was presented if I recall as a replacement for testing hence incredulity of many.
Licence due 3-4 weeks from presentation so by about 10th April. He will be in country from 15th April and testing due to commence.
The risks are Agreement IV not signed and coiled tubing doesn't arrive - interested to know whose property the coiled tubing is, Sandjet or another party?
He said it would take 3 months for big perforating guns from Schlumberger - not sure how this wasn't considered as soon as Sandjet in Sept was not feasible.
The sand could have been inn countey in Oct plenty of time for Japanese lettuce testing by customs.
Hopefully the obstacles to testing do not arise and we see this happen in late April and MOU5 drilled simultaneously.
As for the PE comment - doesn't seem fully formulated just a throwaway comment born of frustration.
So long as we test it should be a goof 6--8 weeks upcoming if its flows.
Not that great a presentation in my view in terms of style. Thankfully substance better than presenter.
If you have knowledge of the industry and deals they structure I'm surprised you're so dismissive Eurochamps? Hence the question around experience.
However,.we should maintain civility so apologies if it was dismissive/derisive.
In your vast experience of Private Equity Eurochamps?
I work on Mid-Large Cap Leveraged deals - they want to hit return hurdles more than anything.
The PE take out option is an interesting one. These guys can come in to fund drilling to prove resource and in doing so place an equity value on the remainder of the share capital.
For better or worse someone did it with Hurricane and I dare say there are plenty of hedgies/PE funds with money burning a hole so long as their investment parameters allow.
Board maintain autonomy which would I dare say please the kingdom and funds available to bolster expertise which the investor may even have in house.
Lots of potential ways to monetisation
Thanks folks.
Odd indeed, keen to see PRD and AXL.
Has anyone seen a link for last week's presentation? Just had a quick search to no avail - thanks in advance if anyone can provide a link.