Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@Adon. The last clear MOU-1 satellite picture on the Copernicus website was on 12th January, with no equipment change from previous views. It has been cloudy since, so nothing to see. Are you using views from something other than Sentinel-2 L2A ?
@TLBLDN. When asked if he thought it likely that Latin could become the universal language, my now long-deceased Latin master replied that "there was more chance of getting ink from a bee's knee." No news until Summer? - My answer is the same.
Unless you are talking about end of Summer here in Oz, that will last for another 3 or 4 weeks.
@donalb - just discussing the water at MOU-3 with someone offline. They agree the pool in the centre is odd - drill pads drain away from the centre - and we had both come to the conclusion that SandJet may already be in use at MOU-3.
I said a little earlier that I would add other drill pads when they appear. How about what the ITR refers to as MOU-SE ?(looks like MOUSE🐭), which we have been calling MOU-5 or MOU-NE - whatever, it's the next drill into the Jurassic.
RNS 13th July 2023 "culmination of the Jurassic carbonate target lies 2.6 kilometres to the southeast of the MOU-4 well location."
My measurement may be a bit off, but this looks like a pad under preparation 2.7kms ESE of MOU-4 - just happens to be on seismic line 03-ML-06, as was MOU-4, very close to where that line is crossed by seismic line 77-GR-26X. Nothing there on 25th Jan, appears on 2nd Feb, surface changes 12th Feb. Here's yesterday's view, worth scrolling back a week or so:
https://dataspace.copernicus.eu/browser/?zoom=17&lat=34.27749&lng=-3.31038&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-02-12T00%3A00%3A00.000Z&toTime=2024-02-12T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=30&dateMode=SINGLE
These are long links, you may need to copy & paste. Loads very slowly. The links are for the latest transit (12/Feb 2024. New transits are every 2½ days. If you use these links in the future, you will need to change the date (upper left). You can load a string of dates, then run them to see movement over time. I find false colour gives the most detail, but you can play with it yourselves.
MOU-1
https://dataspace.copernicus.eu/browser/?zoom=18&lat=34.28421&lng=-3.44322&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-02-12T00%3A00%3A00.000Z&toTime=2024-02-12T23%3A59%3A59.999Z&layerId=2_FALSE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=30&dateMode=SINGLE
MOU-2
https://dataspace.copernicus.eu/browser/?zoom=18&lat=34.32066&lng=-3.3674&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-02-12T00%3A00%3A00.000Z&toTime=2024-02-12T23%3A59%3A59.999Z&layerId=2_FALSE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=30&dateMode=SINGLE
MOU-3
https://dataspace.copernicus.eu/browser/?zoom=18&lat=34.32132&lng=-3.38565&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-02-12T00%3A00%3A00.000Z&toTime=2024-02-12T23%3A59%3A59.999Z&layerId=2_FALSE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=30&dateMode=SINGLE
MOU-4
https://dataspace.copernicus.eu/browser/?zoom=18&lat=34.28862&lng=-3.33568&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fsh.dataspace.copernicus.eu%2Fogc%2Fwms%2Fa91f72b5-f393-4320-bc0f-990129bd9e63&datasetId=S2_L2A_CDAS&fromTime=2024-02-12T00%3A00%3A00.000Z&toTime=2024-02-12T23%3A59%3A59.999Z&layerId=2_FALSE_COLOR&demSource3D=%22MAPZEN%22&cloudCoverage=30&dateMode=SINGLE
I will add new drill pads as and when they appear.
You can also enter the latitude & longitude (lat##.##### lng#.#### numbers in first line of each link) into Google Earth to see historical high resolution views.
Imho the apparent changes at MOU-3 on the transit of 12th Feb are due to pooling of surface water after the heavy rains of the past few days - becomes very evident when you switch to 'moisture index'. However, the movement of equipment at MOU-2 over the last two days does appear to be real. If so, that is rather interesting.
I put this on X:
#PRD
What if?
🦖MOU-3 flow exceeded all expectations
🦖They decided to re-enter MOU-2 next
🦖It would only take a few days
🦖Using existing materials inventory
🦖Before CHAR took over SV-101
🦖and test MOU-2 & MOU-4 in Phase 2
Apologies to GRH for stylistic plagiarism😁
@Bob - Jimmy is certainly right in that the seismic is old, not very extensive, and not of the best quality - evidenced by the reef structure being found by the drill to be 200m lower than expected from the seismic. Lots of uncertainty - the ITR has confirmed this, and made some clearly stated assumptions from which arithmetical calculations have been derived. The GIIP ranges are unusually wide because of the multiplication of all these unknowns. The ITR clearly states that is an informal estimate, not a CPR.
Are the ITR assumptions conservative?
* ITR assumptions for porosity range from 8% to 15%. We know that historic drill TAF-1X found low-porosity (8%) dolomite. We know that dolomites provide much of the sources of hydrocarbons worldwide, and typically have higher porosities. We also know that reef structures that have experienced sub-aerial exposure, leaching and fracturing typically have secondarily-developed porosities of 20-25%.
* ITR assumptions for reservoir thickness range from 5m to 50m. We know that 2m was found at the extreme edge of the structure by MOU-4, 18m was found in TAF-1X. It is a little difficult to estimate thickness from the reworked maps provided in the ITR, and they have not done so - the 50m upside appears to be an arithmetical construct. This contrasts substantially with the 2023 estimates of 200m thick reservoir made by PRD management, and in particular with assumptions that all of the 800m of the Lower Jurassic seen in non-Guercif boreholes is of reservoir quality (it is almost certainly not).
* The ITR gives a Bg (gas expansion factor) of 100 -110. This is arithmetically correct for this depth, assuming normal pressures. There have been suggestions that the whole system is overpressured, including the Jurassic reservoir. If correct, this would increase the Bg, and hence the gas volumes.
I assume the much higher volumes proposed on this BB are based on assumptions about the above three factors that are more optimistic than those used in the ITR. It is difficult to question these BB volume estimates without knowing the assumptions used and the reasons for doing so.
We will ultimately have to wait for confirmation by drilling. Only 7 weeks to April 1st.
@Rambo - I assume, and it is only an assumption, that the GSA is ready waiting to be signed, conditional upon exceeding a pre-agreed flow rate (10 mmcfgd?). The 12th January RNS stated : "Depending on the results of the Phase 1 rigless testing, Petroleum Agreement Amendment #4 would also potentially facilitate an application by 5 March 2024 for a single Exploitation Concession over the area tested by MOU-1 and MOU-3, providing geological continuity of potential gas reservoirs can be demonstrated." I assume PAA #4 has been issued, but not sure of the relevance of 5th March - presumably one month after grant of #4. Again, I don't know how long an EC would take to be agreed, but with the PM owning the company that is going to profit from it, I would expect fairly quickly. There is always a potential political risk when working with a powerful partner (double-edged sword effect), but I would think doing the dirty on your smaller partner would hardly encourage future investment in Morocco.
I expect we will get a good indicator on these issues next week.
@VLTone. Yes, that is a concern, although supply chains are not as screwed up as a year ago. I know they have dozens of pallets of drilling mud in the Guercif warehouse, but maybe not enough for that many wells. They will also need casing and of course wellheads - possibly high pressure. On the plus side, these are shallow wells - MOU-3 pair are only around 350m each, so not the quantity of materials required for 1500+m ones. We will soon find out.
It's the start of the Chinese Year of the Dragon today, and the Moroccan Year of the Titanosaurus, so may I wish everyone a happy new lunar year. However, some people of a certain age and emotional disposition will not like what I am going to write, so please move on now if you only want certified results, and please don't clog up the board with posts about what an idiot I am. This is CONJECTURE – only a fool would base an investment decision on this. Warning over. First some facts:
💲 The RNS of 26/01/24 “the commencement of the rigless testing programmes is now expected to occur on or about 29 January 2024. The testing programme is forecast to last for UP TO 14 days.”
💲RNS of 30/11/23: To be tested – MOU-3 – 6m Fan, 4m Ma sands; MOU-1 - 4.6m TGB2, 4m Ma Sands, with a contingency of MOU-4 6m Fan.
💲RNS 12/01/24 Hoping to achieve combined flow of 10 mmcfgd for 10 yrs, with a possible upside of 20 mmcfgd for 6 years.
💲Saturday 3rd Feb - Unofficial confirmation that testing had started on 29th, and was proceeding well.
💲Monday 5th Feb – a very upbeat RNS confirming rig booking for a fully-funded MOU-5. This contained the unusually wide time window of 1st April to 31st May – why? The CHAR RNS the same day told us that they were also using the SV101 for 2 drills in Q1, with up to another 18 in Q3 & Q4.
Now the speculation.
🦖 The testing has provided flow rates substantially in excess of the 10 – 20 mmcfgd above. The market is still only expecting to see evidence of commerciality, which is 3 mmcfgd.
🦖This will enable in quick succession: a declaration of commerciality; signature of a definitive GSA with Afriquia Gaz, an application for an Exploitation Concession.
🦖 Paul has said on several occasions that announcement of flow rates exposes PRD to a hostile bid, so he will want to do everything possible to forestall this asap. Expect Phase 2 testing to start very soon.
🦖 Within the 61-day drilling window already announced, it should be possible to drill 2 shallow holes (MOU-3 SE & NW), 3 medium holes (MOU-5 SE, N & NE – see p.38 of the ITR), and to re-enter MOU-2. MOU-5 SE is already funded, the rest should cost about $10M, possibly paid for from a gas pre-payment. Even if by a placing, the flow test results should put the market cap at £150M, and a small highly-accretive placing should fly easily.
🦖 By the end of Q2, there would be 9 wells ready for production, a purchase agreement for LNG in place, a huge upward revision in volumetrics by Scorpion enabling the possibility of G2P and/or G2EU, thus giving a comprehensive sales brochure for the Moroccan assets.
🦖 Speculation is already rife - if this is happening, it will need to be announced early next week.
🦖 Also expect announcements on Ireland & T&T in Q1.
Oh, gets cut off when I use a 'less than' sign.
... I have seen forecasts ranging from less than 1 TCF up to 91 TCF. I suggest you use 600m PRD shares in issue, to take account of current options. Personally, I don't think there is much point taking this into such detail, but we should be pretty safe in assuming $ 1 - 2 Bn per TCF would leave reasonable profit for an acquiror.
Whatever, once we have some indicative flow rates - maybe as early as next week - and some revised volumetrics that may or may not include MOU-NE, then we can maybe start counting some hatching chicks.
I believe that Cove Energy has been mentioned in comparison with PRD because 1/. the company was developed debt-free, financed by accretive placings, and 2/. was acquired by a big player after having made a massive discovery. I don't think you can do a simple like-for-like calculation.
Comparative valuations are useful to look at alongside valuations based on cash flow, but it can be misleading to look at just one deal, rather than a range of similar situations. In particular, I don't think it is straightforward to make projections of PRD acquisition value based just on Cove without considering the context and applying certain assumptions. Natural gas prices were about the same as today, but the GBP:USD rate was around 1 : 1.6. Rovuma offshore was about 50 TCF, Cove owned 8.5%. Steve Staley, a former director of PRD, was on the Cove board.
So, a sale price of £1.2 Bn was around $ 1.92 Bn. Cove's share was 5 TCF, giving $380M per TCF.
If you really want to come up with a comparative sum, you will need to multiply by whatever you think is a reasonable factor to represent the relative cost of onshore / offshore, then adjust for the tax regime. These two factors alone will make a huge difference. Multiply by whatever number of TCFs you want to make a wild guess at - I have seen forecasts ranging from
@findme. Let's contrast that with what you have produced. When you arrived on this forum, you told us you had 40 years O & G experience - I was looking forward to you sharing your experience and wisdom. So, what priceless nuggets of information have you actually presented? The only one I can recall is that you informed us that employees in O & G work on Christmas Day. Wow. The rest is ad hominem insults to other posters and cynical put downs of company staff that are making remarkable progress for such a small team. Antivenom is similarly constructive - I assume you are on the same (losing) team.