Member Info for londoner7

Mc78, your memory is correct, that was the reason given.

"recompense for the utility issues"

Yes, they did make the point that their claims are >18 months old, so probably relate to the utility issues and I guess they can have reasonable certainty of recovery.

Any claim post Carillion would be a bonus but perhaps there isn't justification for one, although I do wonder about the design work on the Don bridge.

A placement has been the historic funding option for Mosman.

Bank debt is highly unlikely due to the cost of debt - this barrier was hinted at by Andy in an previous video call.

But here Andy seems to be pointing towards a partner, i.e. a farm out to fund the horizontal drilling at Welch - remember Welch is 100% owned by Mosman.

It seems!

Something looks amiss with the way that AWPR costs were presented today. If bigger brains than mine don't see it the same way I do then I guess I'm being overly concerned.

Operationally, it looks okay. Linden Homes stable with the expected adjustment to average selling price falling & margin improving. Construction margins I sense are still under pressure and the >2% target for FY21 may be a challenge. Partnerships is the stand out - going very well.

They are guiding towards upper end of market expectations for PBT, which I guess is the reason for the favourable market reaction. I make that an EPS between 135-142p and a dividend for the year of 68-71p. (9% div yield)

No doubt a deal on Brexit will boost the share price. As it will most UK shares.

http://english.alarabiya.net/en/business/energy/2019/02/12/Al-Falih-Saudi-Arabia-will-reduce-oil-production-to-near-9-8-mln-bpd-in-March.html

Specs1, you're clearly up to speed on the CMA investigation and following your comment on Dignity's claim that their quality of service merited higher pricing was debunked in the CMA report I took a look myself. I agree with your conclusion

I was also surprised to see the argument I held when I was an investor that there were significant barriers to entry in crematorium was also debunked in the report.

But whatever the conclusions of the final report, short of nationalisation which I don't think even you would expect, what impact can the report have on Dignity's business?

They may demand, and enforce full transparency on costs, but Dignity appears to be moving in that direction now.
Anything else?

Dignity would love to see any regulation on business as this always benefits the incumbents creating a barrier to entry for new entrants.

In an idle moment I was looking at the recent holdings RNS and wonder at Blackrock's actions.

They have reduced their direct holding in GFRD by £1.4m but increased their holding via financial instruments. I wonder if this is a trading play around the release of GFRD's interim numbers on Wednesday.

First a couple of corrections - in my rush to catch a train yesterday I put out a post without proof reading. When I said "ownership in name only I meant "operatorship in name only". Also, I referred to the likelihood of a placing but didn't fully capture my thoughts. Given a sound investment case I don't always consider a placement to be a bad thing. Much will depend on its timing in relation to news on the Stanley wells. I've seen the 0.4p number mentioned so I guess people here are aware of the potential funding from the exercise of the warrants issued last Nov. IMO news from Stanley 2 of 300 bopd (gross) confirmed would put the SP into the 0.4p region. I emphasis "confirmed", we didn't know about the gas cap on Staley1 until production facilities had been installed.

Back to the point of this post.

The problem with estimating Mosman funding requirements is that its a fast moving situation and accounts are very out of date - the last update was for the year to 30th June 2018 and much has happened since. But based on those accounts day to day running costs (Admi/Corp/Fees/Benefits) are running at $70K per month. Mixing those accounts with the latest revenue numbers I get a best case cash flow from operations number of $37K per month. Therefore, I estimate cash outflow at > $33K per month. The two month (and still running delay ) on Stanley 2 is likely to impact funding for Stanley 4. Not critical but time is money. The net cash number for 31st Dec 2018 due next month (interim update) should help clarify things.

Weetsie, you asked,"How much are we getting from arkoma spary?"

The response was, 1,117 boepd in the six months to 31st Dec 2018.

JB's qualification of this number is , "Does not reflect full six months production as wells were not producing while workovers occurred."

I thought I'd try and put a bit more flesh on the bone.

For the period 1st Jul to 15th Sept we were given a detailed breakdown of Arkoma well performance. Total production during the period was 3,927 boe (52 boepd). It's possible that the 3 wells never produced simultaneously during this period but if they did daily production could have hit 87 boepd. Using the 6 month number leaves 2,069 boe (28 boepd) for the period 16th Sept to 31st Dec.

It's a stretch but let's be optimistic and suppose that Arkoma production averages 87 boepd during the current half year to 20th Jun 2019. Mosman's 27% share after royalties and taxes would be 16 boepd. Roughtly a third of Arkoma production is gas so assigning a $30 net back per barrel may be over generous but I'll use it.

Monthly cash flow = 16*30*31= $14.9K.

IMO that's absolute top end. I'd put a more likely but still optimistic gross level around 50 boepd (9 boepd net) generating $8.4K per month.

Last April Moyes estimated 2P NPV10 at $1.23m @ $65 WTI and gross prodution rates between 80-120 boepd. At this time both assumptions look over optimistic so I'd expect any update to reduce the NPV10 valuation.

Mosman paid at least $1m for their 27% share, which included the costs of the ESP workovers. That doesn't justify the 2P valuation so clearly Mosman had an eye on the 184K boe (net) of 2C resourses.

But with Stanley and the Baja partnership the 'new future' I wonder how much any future Arkoma development features in current thinking on capital expenditure.

I view Arkoma, Strawn and even Welch as legacy projects which will run down over the next few years, but still provide useful cash flow today. Unfortunatly I estimate that at best these cash flows only cover 50% of current expenditure on Admin/Corp/ fees/benefits.

https://www.proactiveinvestors.co.uk/companies/news/213735/mosman-oil-and-gas-working-to-build-substantial-us-portfolio-213735.html

The video is old, but the text is updated.

Weetsie, I sympathise with your comments but this ownership may be in name only. Remember the reasons for the alliance with Baja was to utilise their expertise so that MSMN didn't need to replicate it.

"The significant advantage for Mosman with this Strategic Alliance is the synergy of working with Baja to source new projects, and to develop existing projects with a very strong local business development and technical team, without the cost of establishing such a team and the associated infrastructure."

As to the question of funding - cash is still flowing out so unless Stanley 2 (&3&4) step up soon alongside a recovery in WTI a placing looks likely. The last funding was to fund the Stanley wells but did not cover Challenger or Champion.

The number I was looking for was Welch. In the first six months of 2018 it averaged 24 bopd. Following the workover early summer it produced at 44bopd during July, but this looks like the peak. Over the last six months of 2018 it averaged 28 bopd. As reported this was impacted by wet weather causing a temporary shut in and delays to repairs. MSMN say today, "For example, production at Welch was limited by some wells not producing due to broken rods (which is a routine workover)"

Clearly, this will be a regular factor in Welch production so I think thoughts of more than 30 bopd gross over the longer term are too optimistic. But my concern is the cost of these continual repairs, which is difficult if not impossible to discern from the accounts.

By the way, I assume the middle of the 3 tables at the bottom of the RNS should read six months to 30th Jun 2018.

Auson, do you invest on the basis of earnings?
If so, what are you expectations for 2019?

Having seen some expectations on share price reaction to hook up, first oil etc, I thought I'd share my calculations on the financial impact (discounted cash flow modelling) of a delay to hook up and subsequent first oil.

Taking Hurricane's operation cash flow prediction for various first oil dates in 2019 and subsequent year cash flows @ $65 oil this year and $70 oil in subsequent years, 10 years EPA production,10% discount and $100m current net cash, I come up with a current valuation on first oil 31st Mar as 71p.

If first oil is delayed by one month the valuation falls to 70.1p, that's a reduction of 0.9p on the share price.

The purpose of this exercise isn't to value HUR, there are too many other factors and even just taking the EPA into account, additional risks and costs are likely to come into play. But I believe my assessment of the financial impact of say a one month delay holds. Just trying to put this into perspective.

Of course as we've seen over recent weeks the market reaction is more volatile but when the dust settles, one month equals 0.9p.

As interesting as these ship watching reports are I'll leave the traders to try and catch the peaks and troughs of the next few weeks.

Within the next few months I see hook up and first oil as a given. Where the HUR share price sits at the end of the year will be mainly determined by the Lancaster reservoir performance and the results of the soon to be drilled GWA.

Taverham, are you referring to the Lymington acquisition in 2015?

If so, SNR did say at the time, "Due to the current short-term uncertainties in the oil and gas market, which accounts for 85% of LPE's sales, the financial performance of the Company is expected to be materially lower over the next twelve months than that experienced in the recent past. The acquisition is, however, still expected to be immediately earnings enhancing. Following the acquisition, sales to the oil and gas sector will represent approximately 5% of Group revenue.

LPE's impressive capabilities and customer focus, together with contracted growing revenue from existing nuclear, marine and aerospace customers, mean the Company's future prospects are encouraging. In addition, LPE is very well-positioned to benefit from a recovery in the oil and gas industry when it comes."

At the half way stage Boeing targeted 810 big jets for the full year and hit 806.

Also at the half way stage SNR guided on the jets they supply. Boeing beat on all models, but the 737 mix was below the forecast 275 for the max (this has a higher revenue content than the std 737), however totalling up the numbers x chip sets, revenues were 99.8% target - let's call that a hit.

At the Q3 stage it didn't look like Boeing were going to hit these numbers so that might have contributed to SNR's share price decline going into the end of 2018. The late recovery in Boeing deliveries might account for the recent recovery in SNR's share price including today's 5%.

These numbers suggest brokers consensus of £1,060m should be achieved - my number was £1,072m 7% cc, and I'm still comfortable with that.

Boeing delivered 69. 737 jets in Dec. The monthly build rate is moving from 52 to 57 during 2018 (2018 average 48), subject to CMF engine supply issues being addressed - news is that there has been good progress on this issue. Broker consensus of £1,120m for 2019 now looks light.

That said, big jets only account for 45% of the group. Still need those big trucks to perform.

SNR figures out 4th Mar.

Around 11am yesterday trading in Breedon (buys) picked up considerably, from the typical 1-5 trades per hour to 1 every minute or two. The share price followed.

It had the look of an investment tip or broker recommendation so I took a look. On Monday Berenberg reiterated their buy albeit with a reduced price target of 85p, and there was the 9 day old news of a successful planning which I posted - both items interesting but not significant.

So what was the cause of the trading?

I think I now know. The MPA typically releases it's quarterly assessment of demand on the 1st of the month following the quarter. For Q4 2018 that will be this Friday 1st Feb. However, I believe the information is released to members earlier. I suspect this occurred yesterday and triggered the increase in trading, which would suggest the numbers are good.

Let's see what Friday brings.

released an exploration report this morning which covers HUR and CNE wells. May be of interest to some.

Sorry, I don't have a link I can post.

Locals are against a new concrete plant

https://www.whtimes.co.uk/news/councillor-disappointed-after-hitchin-codicote-b656-concrete-plant-approved-1-5857905

A good example of Breedon's 'economic moat'. Just to the west of Stevenage this serves a busy area for housing development and is supported by Breedon's Black Cat and Potton quarries 20-30 miles to the north.

I recall Edison putting out a note on CNE a few months back so I took a look at their comment on the Tribunal.

"The final hearing of the arbitration is due in early 2018 and judgement could be a few months after. We believe the market is largely pricing in very little value for the stake, and taking a very risked view on Cairn winning any of the $1.1bn damages."

This suggests to me that Edison believe it isn't 'black or white' as I put it but that CNE might win some, all, or none of the damages. Incidentally, the claim rose from $1.1B to the current $1.4B due some additional actions taken by the Indian authorities.

Just putting this out there for balance. As they say, DYOR.