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Sam
Think that is exactly what they're seeking to do.
Whether it is SP/Special Divi or a mix and staged as the geology reveals itself. I'd wager initial special divi for CNG then the drill to see what Jurassic does or doesn't hold.
Then a partial sale for a special divi, stump equity and see what becomes of T&T/Ireland.
GRH and others know the geology alot better than myself. I know what is on diagrams sometimes doesn't tally with what the drillbit sees but think the chances here are strong of commercial gas flows then it is a matter of how wide an area the gas basin covers.
Jimmy
Not a million miles off from your own thoughts, multi TCF finds are vanishingly rare.
I think >1 TCF is possible (maybe not probable yet) but would be delighted to be proved wrong ro the upside.
Shakeywrbooty
I wouldn't ascribe too much value in a model to either CM or Ireland assets currently. So in terms of £15 TSR their current value is de minimus.
For me in the day job looking at value of assets across Project and Leveraged Finance businesses I simply wouldn't put any number on them that was material in a £multi billion calculation
Jimmy
Thanks if my understanding is correct, any larger finds will be gas to power and if we discount to $1m per BCF than that is $1bn per TCF and with economies on value as volumes get bigger think that aligns to the $10bn needing 15TCF ish to get the £15 per share TSR.
I do think as mentioned the BoD will look to monetise aspects quickly, removing top slicing concerns for some.
LochNez
I'm fully aware of onshore vs offshore differences.
Not many $10bn deals are done and we will need multi TCF to get close.
I would say the BoD likely are targeting a special divi and then Jurassic exploration to sell on and retain stump equity and another special divi.
There is a lot of drilling & testing still to do and in this political environment execution risk is higher than it has been for some time.
Androcles
Think a TSR of £15 would be fairly challenging much as you do.
Note when Apache discovered oil off Suriname - Total paid $100m, half of costs to date and $5bn cash carry on E&P spend.
Getting to £15 is $10bn so needs something bigger than Apache has found off Suriname.
Getting a find of a TCF case certainly gets us past £1.00/£1.50 I'd reckon.
Hence needs probably 15TCF + to get close to the 1,000 bagger from 1.5p.
Can it, yes will it - I think more realistic to think in terms of 1-3 TCF.
Androcles
Absolutely, I think they would like to retain an interest but can't see them developing as the scale up in expertise is an enormous ask.
GRH has mentioned this is in terms of market cap not with regard to the original 1.5p.share price. Hence, I'd suggest the reference point is a market cap of c.£1.5-3bn depending on entry point.
That is obviously still quite a journey from where we are today.
Successfully Phase1 probably gets this to 25-40% of the way to the lower bound (£1.5bn MCAP) of this range.
Notice they state " the pipeline is a benefit for any future developer of the MOU-5 asset"
Seems clear a prove up and sell strategy.
CCC
Re your Shaikan post, great analogy
At the rugby club we used to have aname for such specimens, BOBFOC
Body Off Baywatch Face Off Crimewatch
KeithOz
Understand FoxDavies presence but more a friendly voice who is aligned on the success front to help BoD assess options.
BRV
Given the involvement of Arlfriquia Gaz and the PM I've had a sneaking suspicion a govt organised consortium might be making a bifd for assets on successful testing. This allows AG to get CNG up and running for commercial purposes and potentially allow PRD to drill the Jurassic and then bring in a major to develop the wider field if the assets are shown to be sufficiently commercial.
Appointment of an Investment Bank as advisor would have needed an RNS - employing a consultant experiences in such a arena who may not need much remuneration as already has a significant stake in the success case would not need an RNS.
Bowls'd
Would say this is a sensible timeline perhaps even beyond as Morroccan authorities will want to ve confident of any announcements too.
For KeithOz - wlud just say ordinarily NPV of a project doesn't equate to Shareholder value due to execution risk etc but when one considers the follow on potential etc which you mention but deliberately didn't factor then something between the 60-150p price level on successful tests would seem achievable.
GLA
Don't think we're at the stage of suitors yet but clearly GRH has a good relationship with the Board. Hence, wonder if silence is related to NDA/being inside for purposes of considering strategic options as results come in.
Equally may just be on holiday/chilling out.
Not sure we will see the 12 bag fireworks of HE1 in the short term but if the testing can prove up 250/500/750 before then it could certainly move the SP significantly.
The further sandjet testing and Jurassic drilling would potentially then multiply from that new higher base if demonstrating the upper range numbers of >1TCF.
First news sometime in February.
Having posted about Cove yesterday, I wonder how far down the Cove road we are and how much further the current test schedule takes us.
Price action clearly positive currently.
Wr have drilled obviously numerous locations and now testing various zones.
Given the different ownership dynamics in terms of proportion of asset owned we don't necessarily need the multi TCF of the Cove site to achieve the gains.
To get above the high BCF/1.5TCF figure then it probably needs the Jurassic to come in strong. Some really interesting times ahead.
Sorry Cove had only 8.5%....small but important typo
Hopefully something they can learn as they go Keith to plan for next drill.
Noting references to MOU-2 and Cove - Cove completed several drills (5+) and extensive flow testing to prove the case. They were then talking in the 35TCF + case offshore but only had 85%.
The £1.2bn for Cove is a handy price here and with stakeholding difference in the licence and onshore costs not offshore probably only equates to 1.0-1.5TCF on our licence.
If the Jurassic an be drilled and flow tests conducted with perforation gun and sandjet that should be well within realm of possibility one would expect.
Let testing commence.....
Alas there will be those clamouring for info but frankly a day here or there isn't a big deal. They may even commence testing without notifying particularly if they hope to get strong early results to give a more significant update.
If we get to mid-Feb without an RNS then I'd have an issue but to be chucking toys out of the pram when they could start today and RNS tomorrow is a bit pathetic.
Most O&G companies miss deadlines including majors so accord some leeway or bugger off and buy IBM/Nat West/Sainsburys where the plodding pace and dull predictability may suit your temperament better.
Would add to above nothing usually goes up in a straight line and there will (rightly) be profit taking along the way if opportunity presents.