Member Info for LONGWAIT

' Te5 horst is currently worth more than 5p a shared

What about debt?

' they are going to push ahead with TE11 and then sell immediately after.' (SG)

'At Sidi Moktar, Sound wants a new partner to fund further exploration.'

https://www.proactiveinvestors.co.uk/companies/news/219875/sound-energy-pushes-ahead-in-east-morocco-219875.html

If they are really looking for a partner to fund Sidi exploration, then they cannot be planning to sell the company.

the company is still progressing with a three well exploration programme and is in the middle of planning a spud at the TE-11 well site.

Sound says 1.5mln to 2mln cubic feet of gas per day would be likely to be commercial via a tie-back development connecting to the TE-5 Horst discovery.

Environmental approval, meanwhile, for future drilling activity has been granted across a large 9,400 square kilometre area.

https://www.proactiveinvestors.co.uk/companies/news/219875/sound-energy-pushes-ahead-in-east-morocco-219875.html

At Sidi Moktar, Sound wants a new partner to fund further exploration.

Since JP said he would sell the company following TE-11, presumably if it fails then he won't be able to sell the company, unless he sells on the strength of TE-5.

If he sold the company for 27 p, I would take a loss of 33 per cent.

If he soldiers on in Tendrara, with Schlumberger's involvement, then that would presumably mean that Schlumberger still believe the seismic data are reliable.

Problem for shareholders is that they don't know what to believe.

Thanks, Tradesmakes.

What about Sidi?

Any questionable figures relating to that?

Lucky man asks when the nightmare will end.

I seem to remember JP saying that following TE-11, the company would be sold.

That was assuming, presumably, that at least one drill would be successful.

I think if SOU ever have another successful drill result, it will surprise the market, shock posters, and possibly raise the dead.

'By now we should at least have a good idea what the company is likely to be worth to any potential buyer.'

Not if this seismic data are flawed.

If potential buyers don't believe the data, then they may not be prepared to buy.

And the drill results would reinforce their doubts.

'NOBODY HAS ANY FAITH IN THIS HALF COCKED SEISMIC WHICH IS TOTALLY FLAWED'

You could be right, but - and correct me if I am wrong - isn't Schlumberger responsible for the seismic interpretation?

'What are Sidi and Te5 worth?'

Good question.

The market evidently disbelieves the analysts' valuations.

To my mind, the two big questions are: do SOU's acreage really have great potential and can they monetize them?

So far, it looks like the answers are yes, followed by no, but it seems some people think the first answer is no too.

Schlumberger and the analysts appear to agree with me and as long as there are investors with deep enough pockets who share the dream, it could come true.

That's the big unknown - in my opinion.

Presumably, the analyst was talking about a further 1 TCF discovery somewhere other than TE-5.

If so, I wonder where.

If they found 1 TCF in TE-11, and he is right that that could add 166 p to his valuation (not sure how he arrived at that figure) then the shares would certainly fly from this level.

I think something like that could ultimately happen, provided the show can last long enough.

The question is: will the silver-tongued golden ticket vendor be able to keep it going for long enough?

In addition to Sound’s obvious
exploration potential, we derive a valuation for Sound Energy’s
share of the TE-5 discovery of approximately US$360 million using
industry standard valuation methodology – equivalent to 27.1
p/share. Sound’s on-going exploration has the potential to materially
increase this valuation.
TE-5. As well as this exploration programme, the company is moving
forward the TE-5 discovery ready for development. An independent
reserve certification has identified gross contingent recoverable
resources in this discovery of approximately 377 BCF of gas. The
partners are progressing with the FEED (Front End Engineering &
Design) with the hope of getting FID in 2019 and start up of production
in the field by 2021.
Valuation. Using the industry standard valuation of a discounted cash
flow analysis, we derive a valuation for the Sound Energy’s share of
the TE-5 discovery of approximately US$360 million which adjusting
for the cash equates to a value of 27.2 p/share. This uses a gas price
of US$8.9/mcf in 2019 and is escalated at 2% per annum. The
discount rate used is 10% (with a 2% reduction increasing the
valuation by a further 17%). Using this metric as a basis for the
exploration upside, one could assume that a discovery of 1 TCF net
recoverable resources to Sound Energy could add a further 166
p/share to the asset value. Investors should view any valuation in the
context of their own assessment of relevant risks.
Although not covered in the report Sound also has a second asset in
country, Sidi Moktar, with significant potential. The valuation of this
asset will be covered by a follow-up to this note shortly.
https://www.soundenergyplc.com/media/1594/exciting-times-ahead.pdf

Is it really possible that there could be 1 TCF in TE-5?

"... and go after that gas in the Paleozoic ..."

Who's going to finance that?

If they find something commercial at TE-11, then sell that and TE-5, maybe I would recover my investment, but if it fails, what then?

A cash raise?

Would anyone still invest in it after all the hype?

If 27 p is still in the bag, why are the shares valued at 10 p?

They can't test flow rates forever.

Eventually, they will have to tell us the results and whether we have commercial gas.

But if they tell the AGM attendees that they are still testing and don't know how much longer it will take, they could be in for a rough reception.

With a number of additional prospects at Verbier and elsewhere on the licence such as Cortina, being assessed by the JV and reviewed with the help of the new seismic data shot last year there are genuine grounds for optimism. In addition, the 31st Supplementary Offshore Licence Round has the opportunity to create a new area hub that would create value across the area. The company remains well funded with y/end cash of £19.8m less around £5m to contribute to the Verbier well so with a number of potential ‘catalysts’ the worst looks to be behind the company, directors buying shares also helps.

That's what Malcy thinks, although I don't cite him as an authority.

My last post was from MadLongwait to MadCrsnn.

I think I must have gone senile some time before I started investing heavily in AIM stocks.

I had a look at the price this morning and it was up 4 p.

I've just got home and my feeling was that, with continued optimism on the part of the management, the price could have gone much higher while I was out.

I've just checked and it seems it finished up 11.5 p.

It may have bottomed out.

I haven't seen all today's posts yet, but I have a feeling there won't be one from TriggerSaysDave.

Re the AGM, it seems to me there are three possibilities:

1) They announce great results

2) They say, 'thanks for coming, but we can't tell you anything because we're still testing, so unfortunately you should have stayed at home!'

3) 'Sorry, guys, but we've bad news and we decided to wait till the AGM to let you know, so as to **ss you off even more!'

Hoping for 1)