The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Thank you all for your helpful comments. Like others I think Malcy's comments are very variable and I am getting a lot better at looking for the gems amongst the also fans. Likewise I agree re the interview that covered too much ground, lacked depth and needed a better interviewer.
What I find interesting re West Newton is the clear decision by the market to either ignore it or by implication decide that none of the companies concerned have yet made out a convincing case about its potential value. I am reassured re reactions here about the choice between Reabold and Union Jack.
Last August I took a small stake in both Union Jack and Reabold in anticipation of success at West Newton. I note that in Malcy's Blog the recommendation is that although Reabold has a direct and indirect interest in West Newton of about 56% compared to Union Jack's direct interest of 16.65 per cent, he recommends investing in Union Jack because Reabold has other oil and gas interests , making Union Jack a purer play re West Newton. This advice puzzles me. Today LSE note the market vapitalidation of Union Jack an Reabold as £31m and £49m respectively. Reabold's assets outside of West Newton are arguably far more significant than Union Jacks other interests and its interest in WN is far larger. What am I missing?
Like many on this board I made a small investment following comments by Simon Thompson. I must admit that the delays are frustrating, though I have the impression from longer term shareholders that delays and overpromising/ underdelivering are normal experience with CHAR. My impression from the last interview was that something was going on re LIXUS/ANCHOISE. The unknown is why a lot of claimed interest in the data room has not so far led to a deal. Do potential partners not believe the geological data or think the costs and potential delays have been underestimated? Alternatively do potential partners have a large choice of what they consider to be better alternative projects to choose from. Or yet again, is the project absolutely fine but are potential partners or CHAR trying to drive too hard a bargain? I don't pretend to know the answers to these questions but those with more experience of CHAR may have interesting insights.
As a final thought, if the project were superb and CHAR was bargaining too hard, it would not cost much to simply buy CHAR and float off the assets outside of Morroco (or are they an all to effective poison pill)?
Apologies-' drilling tests ' should be 'drilling cores'.
Thebhoys
Yes I still have my investment and have averaged down to a bit under 2.8p with 1,550,000 shares overal now. My initial impression is that we got very little new information last night and that we need to watch for the results of the tests on the drilling tests and perhaps a development on the funding side. Possibly relatively quiet until March/April unless we get on the radar of a few commentators such as Malcy's blog.
The revised NPV figures to reflect higher oil prices are encouraging but could just as easily have been provided earlier. Clearly significant new information iwill probably have to await either or both of the results from analyzing the cores and news of a funding partner. I have read the presentation on the company website but were any interesting questions asked by the audience at the Proactive Investors event?
Setanta 1
Thank you for the correction -all very promising.
I suspect that the next significant RNS will be about the results from analyzing the core samples. I think we were told in the video that Zephyr had no control over how long that might take. Given that there will be a lot of samples from multiple layers and that the results are presumably what the public subsidies are all about I am not expecting these to be available in the next few days. I would of course be delighted to be wrong but I think we probably need to be patient for a bit longer yet.
As regards the next TXP I revert to an idea that I have floated before but that attracted only a limited response. Other oil and gas producers in Trinidad will be well aware of the success that TXP is enjoying; consequently one wold expect them to be thinking about whether it would be worth their while copying TXP and sinking deeper exploration wells. I do not know much about the geology of Trinidad but it would surely be a remarkable bit of luck if the geology of where TXP has drilled was unique and hence not replicated elsewhere on the island.
I used to have shares in Columbus but got out when the cheap bid from Bahamas Petroleum surfaced. Whether any of the ex Columbus permits have a similar geology to those held by TXP I do not know. Arguably Bahamas Petroleum is currently drilling a wildcat well that will either shift the share price up a lot if it succeeds or decimate it if it fails. I am tempted to buy a few if the share price gets decimated as Columbus was a well managed company but consider it too risky until the Bahamas well result is known. Can anybody with shares in other oil/gas companies operating in Trinidad help firm up or refute this idea.
Tobin
You ask what if anything can go wrong with TXP. My impression is probably very little in the next year beyond the ever present oil exploration risk of the odd minor delay and perhaps ditto getting production up and running. Longer term I would like to get to know more about the proposed Kraken drill. My understanding is that the target is to hit the same geological formation as many of the successful well drilled off the coast of Guyana and perhaps some of its neighbours. A well on land is much cheaper to drill than one in deep water but the chance of a discovery may for all I know be lower than in the current drilling programme. This matters because past experience of small oil explorers suggests that a failed oil well can have a devastating impact on share prices. At the moment I am not worried about this risk because there are likely to be safer but very rewarding wells that will be drilled ahead of Kraken. That said I don't think that we can automatically assume that Kraken will succeed. I will certainly be trying to find out more about Kraken well before it is drilled.
Thank you all. I note the point re gas and the line in the sand. I agree that if we hear nothing more until Match that is a concern in that the share price is likely to drift in the meantime.
I was not expecting much new information in today's RNS given that it followed the earlier one so quickly. That said I am struggling to be clear about exactly what new information is included. We knew already about lots of presumably relatively shallow stacked reservoirs and the presence of unspecified hydrocarbons in the core samples. Similarly we know that if the results are confirmed they want to do a horizontal drill but will need a permit and funding. I might have missed it but perhaps the mention of a March target re next steps etc is new information.
The discussion re Biden is mostly a repeat of the very clear and helpful comments that we got on the earlier RNS. Can somebody with more technical knowledge than myself post a note highlighting what they think is new in the RNS.
PANR has been lucky compared with 88E who have lost at least six days of drilling time at a key time of the year and are at a clear disadvantage in terms of what they can now achieve within the working window dictated by the weather.
I suspect that longer term the the real threat is not the Federal v State land issue. The more probable concern is whether big oil companies will want the hassle involved in fighting environmentalists when it comes to extracting newly discovered oil on the North Slope. Ultimately exploration companies may need to put together partnerships with other small entities to develop such discoveries. Not necessarily a disaster but it may limit quick buy outs at big premium and take a bit longer.
If my memory is correct , part or perhaps all of the news on Friday had something to do with getting the results from core samples that had been sent to a lab for analysis, so perhaps something about the characteristics of the oil and the permeability of the core material.
Thebboys
If you read what I say it is quite obvious that I have researched the RNS's put out by the company and listened to the interview. My comments relate to an avoidable timing mistake that I admitted to making and a bit of realism about how quickly the share price takes on board the good long term prospects of the company. I have been bitten too often before by financing decisions to automatically assume that they are a not a possible issue. Sally Union Jack shareholders who bought in August and had the share price badly hit by a very dilutive placing.
The 08.17 buy was mine. I got in to ZPHR after reading Malcy's blog and decided to buy some more this morning after listening to the interview and reading the RNS. Arguably one of the oldest timing mistakes in the book - I ought to have known that whatever the longer term prospects the price had got ahead of itself and some profit taking was inevitable. Clearly the company is good at communicating with shareholders unlike some AIM listed energy companies. I am not expecting a lot of news later this week - perhaps confirmation of the characteristics of the oil and was a little surprised about the financing uncertainty. I knew that finance would be needed but thought that this might have been already agreed subject to results. The key point here is to avoid a dilutive share issue, Farm in or loan with too many cheap share options attached. Clearly the long term prospects look good but further progress towards production and certainty over funding may be needed for the next big hike in the share price.
I am both impressed and grateful for the amount of work put in by the poster on doing this DCF calculation. My concern remains the low 5 per cent discount used rather than the usual 10 per cent widely used when looking at commercial investment decisions. The lower discount rate results ina higher NPV and hence implied share price.
Interestingly I was until recently a shareholder in Diversified Gas and Oil, an American gas producer that has done well at buying other producers at distressed prices when gas prices were low. The shares were recommended by the IC as both an income stock and as a cyclical buy for capital gains as the gas price improves. The shares yielded just under 10 per cent when recommended. I mention this share as one possible TXP outcome is that they develop what they have found and become essentially a similar type of income stock. The yield might be a bit lower given the likely 27 year asset life. Alternativelythe company could decide to use its income to buy other companies/ explore elsewhere and would then have the yield/growth prospects of an oil and gas exploration/production company. At this point we simply do not know how the company will develop long term, assuming that it is not bought out.
The key point about the minimum value exercise is that at this point it deliberately excludes a lot of near certain reserves upside and consequently adds to shareholders conviction that the the long term share price will be higher than the current price.
I suspect that two things are going on. Firstly there will be shareholders who are alreading sitting on a decent profit who will be selling part of their holding so as to reduce their risk of losing all or part of it if the well results are disappointing. Secondly, the well is in an area that is both operationally difficult and environmentally sensitive. Even within the existing regulatory regime there may well be some potential Farm in partners who will simply not want the hassle, so will ignore an opportunity that they would take in a more favorable environment. Another aspect of of the point that may be having an impact is the fear that the newly elected President will change the regulatory regime so that it becomes either impossible or very expensive to extract the oil. I do not know enough about the relative rights of the State and Federal Goverments to judge this situation. I noted a brief news item that seemed to imply a hFederal ban on new oil leases in Alaska but am not sure about the details. Perhaps other posters could outline their understanding of whether PANR is likely to suffer from expected changes in the relevant regulatory regime.
Highlandmatt: As a long suffering shareholder on Aminex I agree very much with your comment about Africa. However, country risk is not confined to Africa - I lost money on Ascent because of odd Givernment action in Slovakiia . Sadly country risk is very real feature of many AIM energy and mining stocks and I now have a list of countries that I avoid investing in. Whatever other issues it may have Trinidad is a good bet in terms of being investor friendly. The u
It is clearly possible that we will hit £2.50 in February not withstanding a few actual and potential delays in Trinidad. I do hope that in the run up to the drilling results we do not get lots of postings predicting yet another huge rise in the share price. The share price has moved steadily upwards for several weeks now and we must be getting to the point where a lot of the potential news is already in the price. That said I am happy with throw the company is run and with the share price performance. I will be holding the shares for at least the next few months rather than trading them.