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On the next exploration success in CPO5 I see a dividend as being highly likely (assuming both Indico appraisal wells also contribute to production as expected at 2x 1k net to AMER).
Very little not to like about the way this year is now shaping up.
Peddle to the floor plse! 2 rigs for 2 jags!
Likely forward production guidance was deliberately (and rightly) set low given some risk albeit low, associated with the dual zone workovers. They seem to be progressing on track. OBA throughput in the coming days over 4k pd (post P7 work and pre infill well) would suggest production upside. Infill well spud news I’d expect close to AGM.
On top of that, am convinced there will be a 2nd rig in CPO5 in 2H - too much to go after there with a single rig which could be required at Indico for months to come.
If Plat production were to settle down at 4-5k (and I think it could easily be higher) we will be in rude shape with solid POO and global supply remaining tight for the foreseeable.
Would also expect the Co to look agin at the N sands in Plat where past drills encountered good pay.
....a lot of money and increasingly likely $80 Brent will be tested given tight supply and poor global production infrastructure; any further supply shocks could see an unwelcome spike up. Market looks uncomfortably tight.
Gather JW paid a lot for that number A ‘1’ plate, ye never know - two jags or two rigs..?
Stand-by...
Oil markets remain well supplied. Saudis no intention of reversing production cuts for the foreseeable. Risk remains marginally to the upside but reckon prices are plenty high enough as they are (ceteris paribus). Should probably get used to $70-80 range until Venezuela and Iran are back in business. (Don’t hold breath there).
Like to think production can push onto 7.5k+ in 2H. Very achievable.
Fossil fuels may be unpopular but the inconvenient truth for those that want to keep resources in the ground at all costs are:
1) EV cars require lighter body - more plastic and carbon fibre (oil based)
2) Still no viable at scale storage solution for most popular renewables (intermittent)
3) EV infrastructure from charging to power gen demands not likely to be in place at scale for many, many years
4) Petrol chemical industry will drive future demand for oil, assuming ICE vehicles are indeed replaced over the next 2-3 decades (yes, decades) by EV
5) Battery technology still not close to the efficiency of the ICE engine
..and so the list goes on
Here’s what needs to happen. People need to change a few thinks, like...
- what they eat and how much they eat
- how they travel and how often they travel
- how they wash and how often they wash
- how they heat and insulate their homes
- what they buy and how much they buy
- how many children they have
...and so on and so forth. Just a bit more complex than simply bashing one industry because it makes us all feel better!
Sentiment on public BBs is unhelpfully back to where it was pre-OXY deal and Indico spud. The SP is mirroring the general mood - but I venture both devs are worth considerably more than the measly 3p (net) added.
Sol should spud in the next few weeks, if we can nail that new LS3 high we’ll be straight into a multi rig campaign.
A bit of patience could go a very long way.
Should there be an offer made in the next month, you would like to think someone might just contempt an investigation into trading and holding declarations, or rather the lack of them. Very niffy indeed. At this rate a sub 25p offer may just succeed and with that ownership of very large and highly prospective onshore asset base with golden infrastructure and solid cash flows.
All well and good AMER acquiring on the cheap, not much use if development stalls and to JWs quip, it remains “scenery”
Colonel, the recent price action seen over the past 4 months in particular has been highly unusual, and especially so for an E&P with recent reserves upgrade, backdrop poo and S&D mkt balance, highly cash generative with an excellent asset book and no debt.
More convinced than ever this is ‘on instruction’ and a hostile offer for the company could be imminent.
Seems we don’t know if a new pad needs constructing for the first appraisal, my assumption being that would be required.
Given recent tender docs published by ONGC that’s a possibility if not likelihood (2nd rig) my only beef being an idol rig costing as each day passes. I know small beer in the grand scheme just hate to see idol assets.
Q. Do they drill from the current Indico pad or a new site further north? I would have thought a new pad hence the spud delay.
It's interesting to study the mood music of the masses... Post the OXY deal and Indico result the optimism was palpable which seemed to be dashed by a single well, Calao in which AMER had a measly 30% overhead exposure. Don;t worry that 200ft+ column at Indico hasn't vaporised - and such a deep interval suggests only one thing, there's much more in this zone of interest than the partners could have imagined, but to have success with any exploration drill you need all boxes to be ticked 1) Source 2) Sand 3) Seal 4) Surge. We know the source is prolific, so find the trap and you find the oil and where the geology is consistent over a wide area - potentially A LOT of oil - as the down-dip Indico-Mariposa play may well yet prove...
I too think JW and the senior team have been doing a good job in challenging circumstances. Crucially all the assets, and more, have now been acquired, the cash is [once again] starting to roll-in with ultra low transport costs and the next phase of game-changing activity supported by x2 tier 1 partners is just about to kick-off.
So simmer down, sit back, be patient and let them get on with the task. It may take another 12-18 months possibly another 2-3 years. I couldn't give a monkey's whether we have 4 drills in the year or 10. The team will want 10 and with 2-3 rigs in CPO5 in 4Q never say never but it all depends on success going fwd. But be in no doubt, they'll drill as much as they are confident and able to drill in the timeframe.
So let's give them the space they need to get on with it. Otherwise it's a v simple call - invest elsewhere!
Remember the SP performance in late Q4 on the OXY and Indico result against a v big market sell off esp in Asia. It will remain a stock pickers market and I sense there are many on the sidelines who know that this share has been heavily and relentlessly sold into over many many months.
Let’s be clear, a positive outcome from the next two multi-zone workovers in Plat and a solid result from the 1st Indico Appraisal Well and we’ll be back in the 20-25p range, no problem.
As for that selling, as mentioned a number times that WILL end...and it’ll be pretty obvious when it does. Still some on the offer to clear but the price action in the last couple of sessions suggests we may (perhaps) finally be nearing the end.
Great spot. Agree CPO5 can only be a multi-rig block as just too much to go after (3 highly prospective areas).
Current Indico rig will likely remain in situ around Indico this year and if appraisal work on Indico is positive, with further production increases then - assuming the Calao read across doesn’t say otherwise - Pavo may still be very much on the cards. Expect to see activity and momentum pick-up again post FY results.
US shale production growth unsustainable.
Rig count continues to fall as concerns mount over both financial and technical sustainability of the industry as a whole. Now a bigger question concerns its ability, long term, to compensate for ongoing global drops in conventional discoveries.
What we can expect is demand for and consumption of oil pivoting from combustion to petrochemicals, but this will be necessarily over a couple of decades, if not longer. The big worry is the slow down in conventional finds. They’re going to be fewer and further between esp with cheap/straightforward/close proximity to market.
If this is balanced journalism I’m a Dutchman!
“Although it is true that the prior consultation ended with two other Siona communities reaching agreement with the company” (mumble mumble)
Clearly no problem with due process there.
Would imagine the plan will be to operate around Buenavista until the Govt’s final decision on ops in that SW corner.
Pretty clear now there is going to be a big squeeze on oil inventories and for that trend to continue well into next year. That’s the end of cheap oil folks. Very bullish indeed about prospects here, almost as excited as JW.
Am still buying!
Always encouraging when these jokers appear from the woodwork ;o)
I reckon 18p+ will accompany FY results, then we have Indico2, OBA deal and Put8 / Put12 updates.