Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
For reasons I don't really understand, the market is imposing a soft cap on the Company of around £1bn. Doesn't seem to matter how much good news we get, the market just won't credit a company with no reserves or production with more value than that. Crazy in my view given Mike Smith's comments, but there you go. Not long now till Alkaid 2.
To my mind (after proving the oil is commerical of course!), this is the single biggest risk facing the company - that it is vulnerable now to an opportunistic takeover bid. If you said the 2.5bn bbl recoverable were worth the $3.10 / bbl paid for Pikka by Oilsearch, you would get to a valuation of 850p / share.
No problem, buddy. I'd love to hear from someone like Mike Smith a pros and cons argument of our tighter acreage Vs superior location comparison net net in terms of NPV / bbl with Pikka.
always happy for + sounding announcements from them, with the usual caveats. But a couple of points looking at their announcement:
1. This does not stem from any fresh drilling, just more seismic. And once again, the cite Pantheon results.
2. Note the very high CoS used. I’m curious in the notes it says these % have been “reviewed and endorsed by LKA”. I wonder what that means? I’d certainly love to be able to use % like that.
3. Note that they run with the headline 1.03bn, but when you read the release, the pertinent figure is the one attributable to 88 which is 647m.
This is the possibility that worries me the most. As I said on the other board, it doesn't really matter what the share price is, unless the Company is raising money, or conducting a transaction. In the end, gravity / results will tell.
The one caveat is that I worry we are so horribly undervalued at the moment, we are vulnerable to an opportunistic bid. And whilst a bid of say 150-200p might feel good on a one-day basis, it would actually, IMHO, represent a terrible outcome for a company with this potential.
I’ve said it before and I’ll say it again. Markets can stay irrational longer than you can stay solvent. There is more or less no limit to how disjointed share prices can be from fundamentals nor for how long. Eventually the truth will out. As Buffett also says: in the short term the stock market is a counting machine. In the long term it is a weighing machine.
Having said that, this is one of the most extreme examples I have ever seen and I’ve been around a while. It doesn’t really matter where the stock is unless the company is either raising money or conducting a transaction of some kind. And it won’t be doing either of those until AFTER the Alkaid 2 result.
Personally I think they should change brokers.
This is a very interesting 5 minute clip. Note Jay's explicit statement about superior permeability and porosity. That was implied in this morning's RNS about "quality" but it's nice to hear it stated explicitly.
BOOOOOOMMMMMMMM!!!!!!
Direstraight: a lot hinges on the Alkaid2 result. Although it would probably be an overreaction, if it fails I think stock gets cut in half. If successful (which I strongly believe it will be) I do not see how the stock can trade below $1 / bbl of oil recoverable which is at least a triple from here. After that I expect the company to conclude either a farm in or sale which would result in upto say a further doubling from that level.
I hear you and I share your frustration. But unless / until something happens where the share price actually effects the business, it doesn't really matter. So it matters if the price is "wrong" if the Company is raising money, or negotiating a buyout or a farm in (since although they shouldn't, the farm in partner will inevitably have an eye to the implied equity value when negotiating their %). The rest of the time it doesn't really matter. However, one thing I would say, is that I am concerned the lowly valuation leaves us vulnerable to an opportunistic takeover. Since although, say, 200p might sound lovely when the shares are at 95p, it would actually represent a terrible outcome for a Company with this much potential.
It’s a very interesting question how far a successful Alkaid 2 result could / should take us. If we said that the goalposts are $9/bbl (rough NPV no from PANR slides @ $70 WTI) if we achieved fully proved up reserves (which Alkaid2 alone cannot achieve) and the current val of the 2.5bn bbl recoverable is $0.30 / bbl approx, where would a new “fair” value of these barrels be? In my view anything less than 10% I.e triple would be ridiculous. I could easily argue 25% which would be say $2.25 / bbl which on 2.5bn bbl would be $5.5bn / £4.6bn which would be >600p. I’m reality that’s probably won’t happen but you get my drift.
That’s really helpful, thanks Scot. A couple of questions if you know of the top of your head: with respect to the testing of the SMD and Alkaid deep during this Alkaid 2 drill, do we know if the answers on those will be before, after or simultaneous with the production test results from the horizontal well?
Second, if they are not flow testing SMD and Alkaid deep, presumably the most we can hope for is “encountered hydrocarbons”? Would it even be possible for them to give a resource estimate?
Do I understand what is going on on the other board correctly? People are so ****ed off with Pro, that they have decided, en masse, to quit it and join somehting else called The Guild instead? (whatever that is). And the Guild requires some kind of coin or something, which presumably people expect Pro not to be able to obtain? This is probably the happiest day of Pro's life he has gotten so much attention. Why can't we just mute and carry on?
Cheers buddy. I don't know why everyone gets so worked up about pro. Just mute him and get on with your life! Simple!
This is getting depressing. On the other board there's been more or less nothing apart from *****ing about each other for days. For the love of god can we try to restrict ourselves to, preferably fact heavy, observations about the INVESTMENT CASE FOR PANTHEON!
Pro has posted ELEVEN times on the other board today. Including some in the small hours I suspect after drinking heavily. The man needs help.
OK, I know this post is contradictory, but here's a suggestion. Let's just ignore Pro.
I filtered him ages ago on the other board. I've come to the conclusion he experiences something akin to sexual arousal when people respond to him, mention him, or complain about him. He's just as happy with you swearing and belittling him as anything else. He's DELIBERATELY just seeking attention. Any kind of attention.
So let's just filter and never speak of him again.
You've got to admire Pro's prodigenous output on the other board. I muted him ages ago, but he's posted EIGHT TIMES today!!
Just think about this for a minute. Supposing Alkaird 2 flows at the 1,200 bopd rate the company has discussed ( 150 bopd per 1,000 foot lateral, 8,000 feet). If, for simplicity, I do not assume any decline, with oil at $120, that would be $53m in revenue per year from just one well......