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ShouldveSold - my question is for CEG to answer and be added to the list SC posted. LGO-fan also added two questions that need answering. Others may also have questions. I'm not looking for posters on this board to speculate.
And what is the water cut at S2? Is it the same as S1 (90-95%)?
The headline "Neptune is said to consider merger with rival Harbour Energy" always suggested to me that it is HBR that has approached Neptune with a proposal, not vice versa. We have known since the formation of HBR that the BoD are looking for suitable acquisitions and a proposed merger with Neptune may not be the only card on the table.
We don't 'need' Neptune but maybe there is a good deal to be had that is preferable from a Neptune perspective to going it alone or an IPO. Therefore I feel that HBR is in a good negotiating position.
SC - "Please bombard shareholders with RNSs on the following 20 topics: "
That choice of phrase suggests that the BoD are feeling unreasonably pressured to be transparent. Reliance on your daily speculation to keep shareholders happy is futile.
SC posts are riddled with assumptions.
Whilst not specific to CEG, other than it involves the T&T government and several oil majors, this is illustrative of runaway projects that seem to be too frequent in Trinidad.
I am reminded of the failure of state owned Petrotrin and the resulting change of name to Heritage Petroleum who, incidentally, purchase Goudron oil from CEG. To what extent can Heritage be trusted (1) to survive and (2) keep to its agreements with small O&G companies in T&T such as CEG?
Having spent hundreds of millions of dollars on what now appears to be an ill-advised attempt to save Atlantic LNG Train 1, State Owned National Gas Company (NGC) unilaterally walked away from its agreement to fund the maintenance of Atlantic LNG in the process creating a crisis for the rest of the shareholders.
Full story ...
https://www.guardian.co.tt/business/ngcs-lng-meltdown-the-whole-story-6.2.1380558.fead3c2bd7
SC - NO. I’m not CEG’s nomad Camarco.
Strand Hanson Limited - Nomad
Rory Murphy/James Spinney/Rob Patrick
I wonder if one of these characters is SC?
CAMARCO
Billy Clegg/James Crothers/Hugo Liddy
Be careful if you click the link in fredo1976 post as it was redirected from GUCE which is a notorious browser hijacker.
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Good luck with that. I think 400 bpd is more likely than 600 bpd, always assuming the company survives to year end.
ShouldveSold - "So year end daily production now looks to be circa 600bpd."
How do you arrive at that figure? According to CEG on August 25th "the Company's overall net production (currently ranging between 400 to 500 bopd, inclusive of Saffron-2)".
Eytan Uliel, Chief Executive Officer, commented:
"Saffron-2 has told us that a project at Saffron is likely viable, but two, it will not look the same as the project we had envisaged pre-drill."
"A further update as to ongoing production rates will be provided in due course."
"Based on current production rates (?) from Safffon-2, the Company considers a development of the Saffron field can be justified economically"
"The Company and Arena Investors LP continue to discuss funding options for a Saffron field development, with those discussions to be further advanced once the revised development plan for the Saffron field is finalised."
" In parallel, based on the outcomes of Saffron-2, the Company has begun investigating options for a farm-out of the Saffron project, which, if achieved, would present a fundamentally different approach and risk profile for development of the project than has been considered to-date. The Company has also begun investigating various Reserve Based Lending options, as a potential debt component of any project funding plan."
" And finally, what we have learned from Saffron-2 will allow us to systematically revisit all available financing options, plus there is a body of work to be done in terms of updating relevant regulatory and planning requirements. "
My view ...
The future development of Saffron field is uncertain. Even CEG admit that results have changed thinking.
Yes there are potential options but that's all they are at present.
Funding is not finalised and 2020 statutory accounts are still pending and unlikely to make good reading.
I doubt that RBL funding is viable but we shall have to see what transpires in the period up to 30 September, or when statutory accounts are filed, whichever happens first.
Is this a buy with so much information either vague or outstanding? Do you feel lucky?
Dead cat bounce
I was about to make the same point as you Bohemia.
SC wants us to believe that the only Lower Cruse oil retrieved from S1 "probably was only a tiny amount ‘stuck’ to the drill (or artificially pumped up in a mini gusher), to analyse it!". That statement is pure invention intended to differentiate S1 from S2.
S1 and S2 were both drilled from the same pad and targetting the same intervals at Lower, Middle and Upper Cruse. There is nothing to suggest that the results are markedly different.
S1 was eventually put on production from Middle Cruse, albeit with high 'water cut' (water content) of 90-95%. We are told that S2 is producing at around 81 bpd, also from Middle Cruse, although there has been no mention of the water cut at S2. I doubt that it is clean, dry oil and expect it is producing with the same high water cut as S1. Confirmation of that should be made in order to clarify the flow of fluids to surface because 81 bpd at 95% water cut would equate to a production rate of 1620 barrels of fluid per day.
Eytan appears to have made a mistake in his Vox Markets interview in that he says that S1 is flowing from Upper Cruse, not Middle Cruse.
"... they were never able to do anything with the Lower Cruse and ever since then the Upper Cruse part of Saffron 1 has been producing reliable but very small volumes".
Kevin55 - "S1 is losing production from the highs of 500 bpd in December to about 420 bpd to date"
The bulk of production in Trinidad is from the Goudron field. S1 is not producing anywhere near 420 bpd.
From yesterday's RNS ...
"... the Company's overall net production (currently ranging between 400 to 500 bopd, inclusive of Saffron-2)"
Net production in Trinidad has gone backwards. In my view the company (CERP now CEG) focus on SWP has been detrimental. Leo Koot tried to do too much too quickly, expanding the company footprint in Trinidad but at what cost?
Now we have the reincarnation of CERP as CEG which has added the debt of BPC and no real idea of what debt is outstanding. Goudron IPSC was renegotiated but what MWOs (minimum work obligations) have to be factored into any future plan of action?
Compare yesterday's RNS to Q4 2018 ...
https://www.lse.co.uk/rns/CERP/business-operational-and-financial-update-q4-2018-kram4k5rhyzagxw.html
Strategic and operational
· Year-end target of peak production of 1,000 barrels of oil per day ("bopd") achieved with production peaking at 1,021 bopd in late December 2018 (Q3 2018: 879 bopd).
· Average production of 670 bopd (Q3 2018: average of 735 bopd). Average production was adversely affected by extreme weather conditions, with record rainfall and extensive flooding witnessed during the period, severely hampering both routine operations and incremental well work.
· Integration of the Steeldrum assets and personnel into Columbus successfully completed with the new Trinidad organisation allowing more effective use of our operational and administrative personnel. Columbus now operates six fields in Trinidad: Goudron, Inniss-Trinity, South Erin, Bonasse, Snowcap and Icacos.
· Safe and successful appraisal of the Snowcap-1 & Snowcap-2 wells on the Cory Moruga block, resulting in initial oil production of 70 bopd (which contributed to the peak production volume).
· In December 2018, the Company formally completed the Icacos transaction (the purchase of 50% of the Icacos field from Primera Oil and Gas Limited). This included transfer of operational management of the Icacos field to the Company.
· The Company continues to pursue M&A opportunities both in Trinidad and South America that are value accretive for Columbus shareholders with several formal proposals under consideration by the relevant parties, such opportunities consistent with Company's strategy roadmap.
Saffron 1 is/was producing from the middle cruse with a high water cut of 90-95%. It seems likely that S2, also producing from the middle cruse, is likely to have the same water content although this was not mentioned in today's RNS.
Based on the results of S1 and S2 I am doubtful of there ever being an economical full field development.
Perhaps there's a placing you don't know about yet?
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BHP is the only company to have made a major oil discovery in the last 20 years in T&T when it found the Angostura field and Angostura play in shallow waters off Toco.
https://www.guardian.co.tt/business/bhp-merges-with-australian-company-6.2.1372744.7d22173c96