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We know with the annual financial statements, management are forced to make full disclosure of all aspects of the business mainly within the Chairman's report where Clive will give details of any update in strategy, as well as issues impacting their operational performance over the reporting period and particularly H2 2022, which has not yet been reported on in any detail. Any significant events in 2023 should also be included in the post balance sheet note disclosure as well as the Chairmans Statement. Should hear more about the development of the infrastructure of which recent tenders would indicate they are building camp facilities and possibly additional storage capacity. Too early for pipelines but as soon as they do start getting the shallows to flow again and production increases, additional facilities will definitely need to be in place. Just a timing issue at the end of the day, we PI's are impatient and want immediate returns but a life of an oil company extends way beyond our timescales, so all we do a wait and watch it develop over time, preferably with dividend income. The publication of the financial statements will crystallise the dividend issue as they have previously said that the quarterly dividend policy will commence and be announced when the 2022 financials are finalised. These have been obviously delayed and gone beyond their May 2023 timeline. 10 days to go ......
We have an explanation for the delays in news and looks like 802 has been on hold with supply chain issues. Well 142 still not up and running yet and 803 about to be spudded in next few weeks and completed before year end. Production slightly down from previous levels to 2,000 Bopd. Looks like they are not going to announce their dividend policy until the 2022 year end financial statements have been produced, which is what they reported some months ago when the changed to a new quarterly basis of dividend payments. The sale of the explorer is a surprise and leaves a number of questions open as to whether we now get 100% of the income from the hiring of the vessel in 2024 or just 50% and the sale proceeds of $22,5m are lower than expected. No idea who the buyer is, however, we will be sharing future revenue streams with them going forward from other rentals for future drilling contracts going forward. Profitability of Caspian guaranteed with existing production levels, proceeds of the sale of the vessel in 2023 and rental income in 2024 and beyond, however, still many questions open based on this news. More patience needed. Will know more on dividends come the end of the month.
One possible explanation at this late stage is that they are contemplating a deal and negotiating something and can't release anything until terms are agreed. Very strange that they have not released the dividend declaration yet, the 3 month period is all but elapsed, not sure what happens from here if not released tomorrow.
I suggest they are buying to get back in before the next 3 month dividend is declared. Inevitable those who sold recently will want to buy back in for the next dividend. Probably was too long for those who sold to wait for the next dividend, so freed up the cash for 3 months and then buy back in over next 10 days or so. Should see this continue next week as well.
Foe those of us who know nothing about NUR 1 and to avoid any confusion with Caspian, which I think it is not relevant in any way. Can someone please clarify. I know we are all getting bored with waiting, but posting here about failures with other companies is not the best way forward.
The communication policy of Caspian constantly change across time, moving from monthly regular updates to quarterly operational updates to more recently reverting back to periods of long silences. Management are confident in the strategy and current success of the company and quietly move forward developing the asset and don't see the need to keep us all updated. No point in trying to speculate where they are with all that they are doing. They announced they are waiting for the finalisation of the annual accounts before making their first quarterly dividend announcement, which is due in May and payable in June. The annual accounts are not normally published until June, if past years performance is anything to go with, so imagine it is likely they will be declaring before publishing the 2022 accounts. We know we will get a full operational update within the published accounts, so we have a max time frame of 30 June for this, but whether we get one independent of this beforehand, lets hope so. Lots to look forward to as the company proves up the deep structures and develops further the shallows. Will the company have the confidence to increase the dividend rate based on the current/potential production levels and the knowledge that profits will be substantially increased next year due to the income from the vessel, maybe ? Tick tock......
Looks like there will be continued selling leading up to the end of April, before the buyers will return leading into the next dividend declaration. The opportunity to secure a quarterly dividend payment will be enough to drive the price back up to 7-8p, before the impact of any other operational news update. So expect an up tick leading into 1st week of May.
Even with Caspian discoveries and deep wells drilled so far, they have been trying to establish the extend and boundaries to the oil found at multiple levels, of which there have been many. Who knows what exists between the salt layer at such depths of over 4 kilometres down. Each well has found multiple shows of oil with intervals of differing thickness, all of which are capable of producing from in the future. Caspian has also bought additional neighbouring acreage to the 1400 square kilometres of BNG license area as they know the oil could continue beyond their existing boundaries. Obviously timescales to prove up all of the potential will take time, but when you have a self financing company from existing production, with its own drilling rigs to develop the asset, the upside is unlimited. Particularly when they still own 99% of the asset.
The silence continues on updates on the operational aspects of the Company, even though there are a number of wells they have been working on both MJF and Yelemes. Must be facing some challenges somewhere along the process otherwise good or bad news would have been released by now. We have a period of 5-6 weeks before those who have been selling look to buy back in before the next dividend announcement, which will also coincide with the Company being forced to give an operational update as part of the publication of the 2022 annual financial statements. Seem to remember we were in a similar position last year. The cycle and waiting continues.
The life cycle for oil companies extends over years, decades and beyond. This is a point in time, one of many deep wells they have drilled and the news or update when we get it will probably be summarising the latest status and what further work is needed. So it is not so much do or die, but more do (the well is still producing steady quantities ) or further work is needed to get to a position when they can test flow it (as we already know the oil is there). The company is on a sound footing, steady income stream from its shallow wells, costs covered by existing cashflows, no debt, production licenses in place and full ownership of the asset as well as generating profits and paying monthly dividends. Well 802 is just another step along its life cycle and if successful, will be further icing on the cake, but if further work needed, then they will just move onto the next step in their busy work program. As always with Caspian, just need a load of patience. Sit back, relax and enjoy the ride.
All quiet on this board recently as the wait goes on. Weather is improving now in Kazakhstan, the thaw will be happening across the country and the thick layer of winter snow will be melting, creating the usual floods around the BNG license area. The workers will be well used to this and infrastructure, roads and camps will now be in place to ensure work is not delayed. As we get toward the end of March, working conditions will be at their best through to the end of June when work plans can be executed at a much more efficient rate, as the warm climate returns to the area. News must now be imminent for 801 and possibly 142, but thereafter news will be coming in as the work rate increases with the improvement in the weather.
The last CPR was done by Gaffney Cline, I think in 2010, a long time ago, and is based on very preliminary data and when Roxi had production from South Yelemes and possibly on early work undertaken on MJF. The reserve auditors generally take a very conservative view on available data and only give credit for commercial wells, discounting heavily the potential of yet to be developed deep horizons and are quantified in terms of possible and remote categories of reserve quantities. Therefore the existing CPR report is so out of date and is virtually meaningless. The Brokers use this information but do their own calculations based on current date available to the Company and geologists based on current status of wells drilled, oil price and production levels. They too will use very conservative values to come up with their valuations, taking the lower estimates and more conservative perspectives of the risks associated with developing the asset. What the company needs is to get its CPR updated to reflect the value of the MJF structure and the data available from all deep wells drilled from both Airshagyl and North Yelemes. This won't probably happen until either 801, 802 or A5 have completed a 90 production test and one of them deemed to be a commercial well. At this point the reserve estimates and valuations will change significantly. Once published there will be an increase in interest from majors looking to buy out the Company and acquire the reserves potential for their benefit.
Into the new year, with probably the most optomistic outlook that we have seen here for the past 15 years or so. Production for 2021 was approximately 515,000 barrels of oil, first 6 months of 2022, we produced 414,000 barrels. If we assume an average of 2,400 barrels of oil per day for the 2nd half of 2022, we should end up with production of 850,000 barrels of oil, which would be a 65% increase over 2021.
The average price achieved in the first 6 months of 2022 was $62 per barrel, giving $25,6 million in revenues, which is equivalent to the 12 months revenues for 2021. So what will we generate from the second 6 months, selling to local mini refineries probably achieving circa $40 per barrel for the period, but saving on transportation costs and agency selling costs, so the net back will be probably higher in this period. However, we could be looking at turnover of $43 million for 2022, with much higher profitability. The price was higher in the first six months because Caspian were selling internationally as well as into the domestic market and had higher overall oil prices than in the 2nd period. Should see some healthy profitability from this once the year end accounts are produced.
Production will be increasing in 2023 to 4000 to 5000 barrels a day as soon as they do some remediation work on the MJF wells and hopefully the successful testing of well 802, timeframes on this are always uncertain , but the likelihood that we could see production increasing by 100% from levels seen in 2022 by the end of the 2nd quarter 2023.
Price of oil holding up and getting back to the high $80's so the potential for achieving higher cashflows as production levels and profitability increases are definitely just round the corner.
Probably too early for this to impact the current dividend rate, but we will find out this week, what the 4th dividend will bring.
NBS and Rav, well said NBS, we should not be comparing Caspian with past failures who were riddled with debt or farmed out their interest to explore or develop their acreage. Caspian has no debt and still owns 99% of the license area. There management, also shareholders are fully committed to maximise shareholder value. So we are at a very strong point in the development of the asset, with no debt and no dilution of interest, with ongoing production of revenues from the shallows and the potential to find a solution for the deeps, paying a monthly guaranteed dividend and drilling solution which virtually guarantees additional revenue from existing wells never mind new wells about to be drilled. So seriously, do not compare this gem to other failures from the past, as there is no comparison. The only thing needed is time and patience.
Definitely a new level of interest in the share in recent weeks, more so than for a long time. Many new shareholders have picked up on Caspian so momentum could well be building to see this continue to increase northwards as the market finally begins to understand the potential of the BNG asset.
Sheps, they will need to get it onto test production for a uninterrupted period before they will attract any interest from one of the big players. They have been in this position in the past, so next few weeks will be the acid test for the deeper horizons and potential that exists there. Sit tight.
The "special dividend" scenario will occur for one of three reasons, under their current policy of paying a monthly dividend equal to the higher of £1 million or 35-40% of available free cashflows, with £1 million being the guaranteed minimum that will be paid every month.
The most likely reason we will get a special dividend is if they sell the floating vessel, the proceeds of which would mean that 35-40% of the possible proceeds would be paid out as a one off dividend, with possible higher dividend being paid out in subsequent months until 35-40% of the free cashflows available in the company are less than £1m. So if the vessel is sold for £50-60m then we would get a huge payout, compared to the £1 million currently paid to all shareholders. The continued rental of the vessel could create the extra free cash to pay out a special dividend. If the Company gets production upto 5000 bopd, then this could trigger the scenario that 35-40% of available cash is greater than £1m, therefore resulting in higher regular monthly dividend payments.
You could run a financial model with various assumptions to try to calculate what their ongoing fixed costs and revenues are to try to calculate the free cashflows being generated by the business under each of these scenarios, however, I think we will just have to rely on the company's internal financial monitoring to let us know when they think the special higher dividend payments can be justified. It will most probably happen, just a question of time, as long as they maintain their existing dividend payout policy.
Jimmy, a lot of the production at Tengiz, the major producer nearby to the BNG field has sulphur as a by product from all production from that field. BNG production is without sulphur content.