The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
I don't disagree with the idea that its unrealistic to be totally reliant on renewables anytime soon. I'm just saying that's what Mary Lou (and everyone else) means when the talk about Irish Energy Independence.
A lot of people are saying that BEY and LOGP could sue if they are not awarded a licence - if the Govt refuse to issue a licence even though they meet all conditions, then yes, there may be a case to sue. However, if they do not meet the conditions (and it is shown that the Govt are right) then there would be no basis for a lawsuit.
When politicians in Ireland say they want energy independence - they are talking about wind, tidal, solar and other renewables. They are not thinking of fossil fuels.
https://www.gov.ie/en/press-release/f4c68-ireland-moves-a-step-closer-to-energy-independence/
Yes, I agree. Sorry to suggest otherwise - it just looks bizarre from a distance.
Hi Swiss, the initial cost for 1 well is actually just over €80m - PVR's share is €65m. Remember, this is still appraisal work seeking to de-risk the project. If it all goes well, there will ultimately be an investment decision (or not) in 2024.
This is set out in a letter to the DECC in a letter last February:
o PVR’s share of the cost of the envisaged appraisal well and associated pre-development technical studies is currently estimated at $65 million, which will be sufficient to carry forward the Barryroe project until a Final Investment Decision (FID) in 2024.
o Subject to the granting of the Lease Undertaking, the Board expects to finalise proposals to fund its share of the costs of the Barryroe appraisal programme through 2023.
https://docs.publicnow.com/viewDoc?hash_primary=96A51C3F716F226B393497CB50EA4D04BC506A82
So maybe BEY'll get a partner but if you look at what they actually say in that letter to the Govt, they say " PVR’s appraisal drilling is typically funded entirely through the equity resources of the licensees." which maybe doesn't require 5bn new shares @1.5p, just 4.3bn.
I saw the bad new issued on Monday and then saw loads of people on this board saying 'what great news'. Now, I don't know if they are in an echo chamber or are deliberately misleading so they can try to exit, but to be clear, what PVR/LOGP have been told is that the Govt want to see their money before they get a licence. The Govt have a 3rd party report to support that Govt decision and reasoning. BEY do not dispute this in their RNS, they simply say they will see how they can address the financial position. Whatever happens now, shareholders will get royally done over. It's a firesale to raise cash or they are gone. Even if they get 9bn shares at .75p, I think the prospects of changing the Govt position are vanishingly small - if Ryan is politically-suicidal maybe but otherwise no.
A final point here, no one will ever say in an RNS, 'that's it - we're donald duck ed' - they'll say things like 'it's an unrealistic timeframe' which means it can't be done, or 'we'll consult with our shareholders' which will be an extremely short consultation....
That's how I see it. This is VERY BAD NEWS and if you don't see that, then you need to question whether it is hope over logic.
Hi Swiss, the initial cost for 1 well is actually just over €80m - PVR's share is €65m. Remember, this is still appraisal work seeking to de-risk the project. If it all goes well, there will ultimately be an investment decision (or not) in 2024.
This is set out in a letter to the DECC in a letter last February:
o PVR’s share of the cost of the envisaged appraisal well and associated pre-development technical studies is currently estimated at $65 million, which will be sufficient to carry forward the Barryroe project until a Final Investment Decision (FID) in 2024.
o Subject to the granting of the Lease Undertaking, the Board expects to finalise proposals to fund its share of the costs of the Barryroe appraisal programme through 2023.
https://docs.publicnow.com/viewDoc?hash_primary=96A51C3F716F226B393497CB50EA4D04BC506A82
So maybe BEY'll get a partner but if you look at what they actually say in that letter to the Govt, they say " PVR’s appraisal drilling is typically funded entirely through the equity resources of the licensees." which maybe doesn't require 5bn new shares @1.5p, just 4.3bn.
I saw the bad new issued on Monday and then saw loads of people on this board saying 'what great news'. Now, I don't know if they are in an echo chamber or are deliberately misleading so they can try to exit, but to be clear, what PVR/LOGP have been told is that the Govt want to see their money before they get a licence. The Govt have a 3rd party report to support that Govt decision and reasoning. BEY do not dispute this in their RNS, they simply say they will see how they can address the financial position. Whatever happens now, shareholders will get royally done over. It's a firesale to raise cash or they are gone. Even if they get 9bn shares at .75p, I think the prospects of changing the Govt position are vanishingly small - if Ryan is politically-suicidal maybe but otherwise no.
A final point here, no one will ever say in an RNS, 'that's it - we're donald duck ed' - they'll say things like 'it's an unrealistic timeframe' which means it can't be done, or 'we'll consult with our shareholders' which will be an extremely short consultation....
That's how I see it. This is VERY BAD NEWS and if you don't see that, then you need to question whether it is hope over logic.
That's a complete misrepresentation of what has just happened. LOGP have said they can't raise the money by 21 November saying it's an unrealistic timetable - basically BROE is dead and you see this as good news?
I understand the desire to be positive but I think you are misrepresenting what has just happened. The department has said they have to show access to the necessary funds to do the 1st stage of development (circa €100m) before they will be granted a licence. Now, the not so learned may say that those rules (to show the money up front) were only put in place in 2019 after the initial licence was sought. However, they were in place when THIS licence was sought (sure, go to the high court and sort it out in 2025/26). Even if they have backers who say, we'll underwrite this by issuing 5 billion shares @1.5p or whatever is going to happen, LOGP have been clear to say, it's not going to happen for them by 21 November - they say, it's an "an unrealistic timetable" i.e. it can't be done.
So despite all the positive spin, this decision is the end of BROE- it's madness but there it is.
It's actually quite clever by Ryan, there will be no law suit either as the department aren't refusing to grant the licence, the partnership just can't come up with the development cash (and before you start talking about how easy it would be to get the money, they couldn't raise a few hundreds of thousands in the past and twice failed to raise the cash so there is a strong track of failure - hence the reason the Department can claim justification for requiring to see the money up front).
Run.
The thing is, I'm sure there is a lot of discretion in the award of a licence. You can be sure Ryan took advice before saying, 'show the money up front and I'll consider giving you a licence'. I can guarantee one thing, Goodman et al will not put 10's of millions on the line to protect a one or two million investment. It seems crazy to me, give them a a licence, see if there is oil or gas that can be developed for winter 2024 when things will really get bad, and it costs the State nothing. Instead, he's protecting his reputation with his constituency - so much for the good of the country. Anyway, I think I have said many times that Ryan would never, ever, grant a licence. I'm sorry to be right. It's a genuinely stupid decision.
I just saw this in the paper. Eamonn Ryan will not approve BROE now or in the future. It may be that the Government will fall or that some other event occurs but Ryan will never approve BROE https://www.independent.ie/irish-news/politics/eamon-ryan-doubles-down-on-opposition-to-new-shannon-gas-facility-despite-crisis-in-ukraine-41960872.html
Against that statement, do you think he'll approve BROE for testing? Would he want to see it proved up, then financed and brought online? I don't think so.
I agree it's important to remember what happened. PVR drilled BROE with a really old and ill-maintained rig. While it drilled to the required depth (and hit oil again) - the rig then broke down before a lateral flow test could be done. A lateral flow test was needed to demonstrate whether there was compartmentalization or not. If there was significant compartmentalization then the field might never be commercially viable and compartmentalization was a major feature in the seven heads field that sits above BROE. PVR ****ed away millions taking a case they could not win against the firm that supplied the ****ty-rig. The upshot of the failure to do a lateral flow test is that the concern regarding compartmentalization never went away and basically, no-one would fund BROE's development. There has been a huge amount of BS about how technology improvements now allow mapping of the field and can allay fears over compartmentalization but that's not true. PVR also know that the field has big risks that need to be addressed - hence the need to do more appraisal drilling. And yes - they had the money to do this before and chose not to. They clearly weighted up the risk/reward and went for other projects. BROE has significant risks and is not the certainty presented here.
PVR want a permit so they can conduct an appraisal programme. The purpose of the appraisal programme is to demonstrate that the field is viable. I always thought this was done years ago but apparently not. The cost of the appraisal programme is €65m which they don't have but they think they could raise the funds with the permit. Goodman has invested about £4m in the company to date. He'd have to invest double that and hope all other shareholders take a punt with him to meet that €65m.
If the appraisal programme goes well, then PVR would farm out BROE to an oil development company and have the field developed to start production. Earliest estimate of starting production is late 2026 (assuming nothing is challenged in the courts and no faults show up in the field). The field has always been presented as mostly oil but some gas (they don't really know but it could be a lot of gas, the appraisal programme should determine this I guess). Let me know if there is a mistake in this summary.
In my opinion, I see everyone talking themselves into a frenzy about why Ryan must do this and must do that. I'd say it's not obvious. For a start he's a complete clown but putting that to one side, PVR does not have much credibility - look at the last three farm outs, everyone waiting for a monday morning RNS -at one point it was just a few hundred thousands. At another point in time, they had money which they spent on everything except BROE, why? Even if everything goes gangbusters there will be no production for 4 to 5 years. Will there still be a problem then? Maybe, maybe it will be worse or maybe there will be no problem and oil at $30 a barrel. I'd say Ryan will mull this for a year or two yet.....
It is interesting that Goodman has come in as a major player. The issues haven't really changed for BROE though - they are looking for a license and €65m to prove it up. The problem is that it would take years to get BROE into proper production and the current problems will have passed within 12/18 months. The UK have said that Ireland will be treated as part of the UK with respect to continuity of gas supplies (even if they block the interconnectors to the continent) so the immediate threat is not so severe.
In practice therefore, I doubt all the hysterics will change much. Remember as well, if the Department issue a license, the first thing that will happen is a trip to court as the challenges come in....
Who knows, don't PVR still own the old Kinsale field, could that be used for storage? That might be the play.....
The problem here is that while the Macro picture (the Green Deal v's an Energy Crisis and high prices for gas/oil) might tilt back towards PVR and BROE getting developed, the Micro picture of PVR (how it is run, it's assets and ability to raise funds, its track record) all mitigate against it. Even if they could raise the money to prove it up, they'd be trying to start a new industry off the coast of a relatively hostile administration.
From the PVR RNS: "One of the principal preliminary conclusions from the technical review is that the key uncertainties impeding the future development of Barryroe could be substantially reduced by further appraisal drilling."
They raised +/- £2.5m in 2021 through the exercise of warrants and we know from the annual accounts that "At 31 December 2020, total cash and cash equivalents were €2.110 million" so let's say they had £4.5m, running costs and that seabed appraisal etc. will have put a serious hole in that. They need funding to even drill an appraisal well. They probably need money just to keep the lights on - that sentence in the RNS is a killer - if they don't get a permit from the minister, or even if there is even a delay - it's game over " In the absence thereof, and indeed without receipt on a timely basis, the Board may not be able to achieve its stated objectives, with fundamental and serious consequences for PVR's future viability."
I saw the email, looked through it see that (a) there is no financing (b) there is no licence (I guess that's what they refer to in the 'lease undertaking' and (c) BROE is a long way from being actually proven up as an asset.
I then saw the article in the IT which should give everyone serious cause for concerns:
It said the granting of the lease undertaking for the Barryroe field, which is subject to ministerial consent, is “fundamental” to the execution of the board’s strategy.
“In the absence thereof, and indeed without receipt on a timely basis, the board may not be able to achieve its stated objectives, with fundamental and serious consequences for future viability,” it said.
So it looks like the last 10 years were all more of less bu11**** - the asset is not proven, hence no one will invest. So there needs to be further appraisal but they don't have the money for that. But, there is currently no licence so no one is going to fund a drill.
So, a little foot dragging from the Dept. or even a judicial review of any decision means PVR are toast according to the statement from the board. That's the most likely outcome now.
It is a terrible indictment of the stock exchange/company laws. There has been a real misleading of shareholders for more than 10 years. If there was a scrap of competence in the Office of the Director of Corporate Enforcement in Ireland, they ought to be kicking in the door of PVR and taking action against current and former directors....... it's a cluster****.
I have never posted under any other moniker. I got out of PVR about two years ago. I lost a lot of money on it and honestly, the lessons learnt were not worth it. Most of those lessons were about how we delude ourselves, about confirmation biases and so on. I pop back occasionally to see what's happening or today when got an email from shareholder services telling me Linn quit - which is how it was presented in the press.
I hope for your sake that something extraordinary happens (Goodman comes in, throws €250m at it and gets it over the line) but honestly - I don't believe that's going to happen (no matter how it is expressed). What bothers me is the way shareholders have been, and continue to be, misled. If they were honest, shareholders would have lost a lot less money. BTW I thought Linn was brought in to wind up the company. At some point they will have to pull the plug, will they go again (new share issuance) or pull the plug this time?
The dreamers are thinking this is good news, it's not. If it was planned in any sense, there would have been a replacement announced at the same time.
I really think it shows how poor governance is in Ireland and on the AIM. I would say that Linn recognises that they can't raise funds (now or in the future) and that they are bust. Rather than stringing it along, he's getting out now while the lights are still on - someone else can sit in the hot seat when it actually goes bust. This has been true for four or five years now.
Such a waste of time and resources on this board, with this share....
There are was a moment in time when, if BROE was what is claimed, when it could have been developed. I think that moment has passed. The IEA published a report today that says "that investment in new fossil fuel supply projects must stop immediately". I think it would be hard for Ireland Inc. to support a new project (even if not strictly banned under the current legislation, slow walking every step would be deemed par for the course).
The annoying thing is, PVR had the money in 2016 and chose to drill something else. That really suggests to me that BROE is, and always was, not really proven. If it was, PVR could have developed BROE and then drilled Druid/Drombeg. What they did made no sense otherwise.
https://www.ft.com/content/2bf04fff-5b2f-4d96-a4ea-ff55e029f18e
and the original
https://www.iea.org/news/pathway-to-critical-and-formidable-goal-of-net-zero-emissions-by-2050-is-narrow-but-brings-huge-benefits-according-to-iea-special-report