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GRH has recently suggested that Shaikan / Sheikh Ali is a 'rounding error' compared to Guercif. The Shaikan 2019 CPR gives 2P recoverable resources of 622 MMBOE , which is equivalent to 3.7 TCF of gas. That will do nicely for starters.
@IJWT - "Appointment of an Investment Bank as advisor would have needed an RNS." It's not only investment banks who put deals together. A well-connected outfit specialising in resources, especially with an office in the Emirates, "offering a full range of independent corporate finance and capital markets advisory services for both public and private companies". would be perfect.
RNS 15th May 2023 " Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil & Gas Company with near-term gas operations focussed on Morocco, announces the appointment of Fox-Davies Capital as joint broker to the Company."
The quote above is from the first paragraph of their website: https://www.fox-davies.com/
Share prices go up and down, often unpredictably. Undeveloped resources may or may not be commercialized, or not in the expected quantities or at the hoped for profitability. These are all well-known risks.
Market makers do not 'play games' or 'manipulate prices', as is frequently claimed here. MMs use algorithms to maintain a balanced book and maximise trading volume - that is how they make a profit. There are no malevolent dwarves trying to steal shares away from naïve private investors. Yesterday's sub-penny drop in low volume is irrelevant in the scheme of things, especially after a substantial rise over a short period of above-average volumes. Of course the usual suspects emerge from the woodwork proclaiming doom. I do not know if they are short term traders hoping to buy cheap, or even paid by someone else so that their masters can buy more cheaply. Whatever, it is also irrelevant - just remember that they are promoting their own interests, that may well be the opposite of yours.
Something that is worth concentrating upon is the effects on the value of PRD's assets due to the staged removal of risk. Lionel Therond is one of the most respected analysts working in the oil & gas sector. He was the author of the Fox Davies Capital note issued on 13th July 2023. here it is:
https://danielfoxdavies.sharepoint.com/Shared%20Documents/Forms/AllItems.aspx?id=%2FShared%20Documents%2FPublic%20Research%20Documents%2FPredator%20Oil%20%26%20Gas%2FPredator%20Oil%20flash%2013%2E07%2E23%2Epdf&parent=%2FShared%20Documents%2FPublic%20Research%20Documents%2FPredator%20Oil%20%26%20Gas&p=true&ga=1
He calculates that the unrisked NPV10 of the MOU-Fan & Middle Sands is $1176.4M. That is their value today, assuming that 1/. They are producing commercially as planned, and 2/. The cash flows are reduced at a compound annual rate of 10%, to account for the time value of money. How do we get to 'unrisked'?
* Produce combined flow rates at or in excess of 50mmcfgd from around 150m of reservoir intervals. As you know that de-risking events will be in two phases - the first finished this month, the second next month.
* Agree a commercial contract with a suitable gas distributor. Again, as you know, the main terms have already been negotiated with Afriquia Gaz, the largest distributor in the country, that happens to be owned by Morocco's PM.
* Set up the CNG operation - once again, you already know that the money is there to do this.
* Secure an Exploitation Concession - PRD have said they should be ready to apply for this early next month, and given the influence of their partner and the urgent desire to produce indigenous gas, this should be granted rapidly.
Removal of these risks gives an NPV10 of £922M at fx rate of 1 : 1.275. With 565.2M shares in issue, that is £1.63p per share. Just for MOU-Fan & Middle sands. No Jurassic, no 'running room', no Ireland, no T & T.
By end of next month.
Sorry, forgot to put this up. I believe the legend underneath this map is incorrect. I am pretty sure it should be:
Miocene is orange - dashed lines are proven prospects (MOU-Fan, etc. Triassic is green. Red dash line is max extent of Jurassic prospect, yellow is the high priority Jurassic. Dashed purple lines are the Oxfordian sands. The two overlapping purple prospects to the southwest are the two Jurassic prospects shown on the seismic slices on p.39.
If anyone has a different view, please post.
@wonderer - Jasper is correct as to the definition of commerciality, but I anticipate rates well in excess of that.
Phase 1 (conventional) testing is limited to the more stable sands that management believe will flow successfully with explosive perforation, and collectively produce at 10-20mmcfgd in order to meet a probable initial demand for CNG via Afriquia Gaz.
Phase 2 (SandJet perforation) is covering a lot more horizons, particularly the friable sands that may have been compromised during drilling or where explosive perforation might result in compaction and reduced production. Such unconsolidated reservoirs will typically have higher porosity & permeability. SandJet is also able to accurately target thinner horizons that would be difficult to perforate with conventional methods. I am hoping that this phase will result in an additional 30mmcfgd.
For your reference, a combined total of 50mmcfgd, at a profit of $10 per mcf (maybe more), would bring in $180M / £142M per annum, potentially giving a forward P:E of 0.5. Just for the first 3 producing wells from this area.
Just took a quick look at volumes. Before the Jan 12th Ops update, average daily volume was around 2m shares. Since Jan 12th, daily rates have more than doubled, averaging 4.4M, giving turnover of 53M since then. So less than 10% of the company has changed hands, but the share price has increased 30%. Today, as at time of writing (so less than the first hour) only around 600K shares, or 0.1% of shares in issue, have changed hands, but the share price is up by over 10%.
Several folks are in agreement that institutions are starting to nibble - it is interesting to speculate what will happen when two or more big investors decide they each want a 3% stake. PRD shares are very tightly held - if you are a holder, illiquidity is your friend, but if you are a johnny-come-lately buyer, the reverse will be true, big time.
Fasten your seat belts, February is going to be very interesting.
Europa - yes, they have confirmation: Will Holland, Chief Executive Officer of Europa, said: "I am delighted that our application has been granted and that we can continue with further technical studies of the licence and seeking a project partner. FEL 4/19 contains the large 1.5 TCF, low risk Inishkea West gas prospect which is a strategic asset that can potentially provide a reliable source of low emission energy for Ireland and play a key role in the transition to renewable green power. Given the proximity to existing infrastructure, a discovery at Inishkea West could be brought online quickly and would reduce Ireland's reliance on imported gas. Domestic gas from Inishkea West would have significantly lower carbon emissions than imported gas from the UK, Norway or further afield."
and,
Chariot are competing with us for use of SV101 for their newly-acquired onshore licence: " First drilling campaign of two wells is on track to commence around the end of Q1 2024. .... signature of a contract with Star Valley Drilling, for provision of the 101 rig which is already operating in country .... imminent approval expected of the environmental permit for up to 20 well operations across the licence area .... Precise timing for the drilling campaign will depend upon rig schedule and further updates will be provided in due course .... Work is also continuing with our partner ONHYM on success-case fast-track industrial commercialisation opportunities, with the possibility to deliver near-term cash flows."
"The behaviour of gases can be described by several laws based on experimental observations of their properties. The pressure of a given amount of gas is directly proportional to its absolute temperature, provided that the volume does not change (Amontons’s law). The volume of a given gas sample is directly proportional to its absolute temperature at constant pressure (Charles’s law). The volume of a given amount of gas is inversely proportional to its pressure when temperature is held constant (Boyle’s law). Under the same conditions of temperature and pressure, equal volumes of all gases contain the same number of molecules (Avogadro’s law). The equations describing these laws are special cases of the ideal gas law, PV=nRT, where P is the pressure of the gas, V is its volume, n is the number of moles of the gas, T is its kelvin temperature, and R is the ideal (universal) gas constant."
from ref above.
The effects of Boyle's Law, Amonton's Law, Charles' Law & Avogadro's Law on gas content of reservoirs -
🦖 It could make you rich🦖.
It's really not that complicated.
Here's a good place to start, it's all on one page:
https://pressbooks.online.ucf.edu/chemistryfundamentals/chapter/relating-pressure-volume-amount-and-temperature-the-ideal-gas-law/#:~:text=Key%20Concepts%20and%20Summary&text=of%20their%20properties.-,The%20pressure%20of%20a%20given%20amount%20of%20gas%20is%20directly,constant%20pressure%20(Charles's%20law).
@JapanHouse. You are more than 100% correct! The MOU-4 encountered the Jurassic reservoir 200m lower than expected. This means:
Area increases by 52 km².
Pressure increases by 285 psi just taking account of increased depth.
The unusually high geothermal gradient of 43°C / km (average 25-30) will increase the pressure even further.
The ITR suggests a reservoir thickness, but does not say how they derived the figure.
This is why GRH posted that people should be taking more notice of geometry.
Whatever, that's a lot of gas.
@Chesh. Thank you for publicly demonstrating that you are totally clueless.
1. There was already an RNS on the previous working day (Friday) announcing a start on or about the next working day (Monday).
2. An 0700 Monday RNS would need to be registered Friday, 2 days before testing had actually begun.
3. At 0700 in January it is still dark in Morocco, so unlikely they would have started by then.
4. I am told (I was asleep) that there was nothing available to buy at close on Friday, so your claim that the share price will open below 11p looks a little unlikely.
How about cutting your output 10-fold? It might give you time to think before you type.
I'll answer my own question - ITR, p.35: "The MOU-3 penetration was drilled overbalanced to control shale cavings from the overlying mass flow deposit". Interesting how easy it is to read stuff without realising what it is actually saying.
Anyone have thoughts on this one?
The diagram on p.17 of the ITR shows the various formations encountered by the four Guercif drill holes. The debris slide above the MOU-Fan that frustrated MOU-2 is shown as being present at and having been successfully penetrated by both MOU-3 & MOU-4. If this is correct, maybe lessons have been learnt about drilling mud composition and drill speed that will enable the re-entry and successful completion of MOU-2 to be a lot easier than some expect. Or is the debris slide of variable consistency, and was sticky mud only at MOU-2?
* What does it mean? Oxfordian refers to a geological time period159-154 Ma (million years before present), and therefore is classed as Upper Jurassic. Much of the early geological work was done in the UK, and hence many terms are UK-based - in this case the sequence of rocks around Oxford. They were formed around the start of the formation of the Atlantic in a shallow shelf sea with gradually rising sea levels, and consist mostly of mud / claystone, with a few interleaved sandstones and limestones, including reefs. These are sometimes hydrocarbon reservoirs in southern England. Much thicker limestone and sandstone sequences of Oxfordian age are found in the Gulf of Mexico, and form one of the world's most productive h/c systems.
* What's this got to do with Guercif? That was my first question! I was aware that in the Essaouira Basin in southern Morocco there are fractured carbonate reservoirs of Mid-Oxfordian age, with hydrocarbons sourced from underlying organic-rich Lower Oxfordian shales, and traps formed from underlying Triassic salt diapirs. But it has been assumed that there are no Oxfordian-age rocks around Guercif - take a look at the geological sequence on p.14 from this document from ONHYM (loads very slowly) https://hydrocarbons.onhym.com/sites/all/themes/hydrocarbure/images/pdf_onshore/Hydrocarbon%20Exploration%20Opportunities_Onshore.pdf
You can see there is a discontinuity between 161 - 97 Ma - meaning that rocks of this age (including Oxfordian) have been eroded away and are missing from the geological sequence. So I was very puzzled to read for the first time that PRD is investigating Oxfordian age prosects.
* So, what is going on? Remember that PRD were conducting fieldwork looking at Jurassic outcrops around Guercif? I suspect that they discovered that some of the 'missing' rock strata were actually still there, and had characteristics that could make them viable h/c prospects. A couple of you have picked up on the considerable detail about historic drill holes - two of these (MSD-1 & TAF-1X) went right down to the Lower Jurassic, so if the Upper Jurassic was actually there, they should have recorded it. TAF-2 & KDH-1 may also have picked up some traces of Oxfordian. I assume that PRD has been in discussions with ONHYM about this new potential opportunity, and detailed historic well logs have been released and examined.
* What does this mean for PRD? MOU-4 found the original Jurassic target 200m lower than expected - the prospect map has now been substantially updated in the ITR compared to the last CPR. It now appears likely that a second Upper Jurassic (Oxfordian) prospect lies stacked on top of the Lower Jurassic carbonate reef that we were calling MOU-NE / Titanosaurus, and other previously unidentified Oxfordian prospects are also on the licence area. MOU-5 will target the new stacked prospects.
* Conclusion - we're going to need a bigger boat.