Member Info for Morningsun

Skittish, that is quite interesting, AAog let that ability to issue up to 44mln shares expire yesterday. Why on earth do that and ask next week for new approval to issue shares.
Makes no sense, unless he didn't want to issue at these levels and will only after releasing great news and higher sp showing acceptable reason for doing so, instead of just issuing because he could.
Or not at all as not necessary due to other options.

Anyway, good confidence building news I would say!

MS

Thanks Skittish,

Trucking is indeed a challenge and not sustainable in the medium term even but short term it IS an option. It's 52 km to the Djeno terminal and one can just avoid the centre of the city. It takes an hour and a half (according to the mapping tool), depending on traffic of course but that just adds extra trucks.

Anyway, it is clear long term more investment is needed, very likely in export facilities given your remarkls about the CORAF refinery.

One would prefer to export anyway as it gives more options then just being dependent on that local rfefinery. Unless a big player steps in and actually builds a proper refinery, pipelines and import/export terminal for all the production in the region and export distillates instead of/as well as crude export/import. But that also depends on the longevity of the fields and the security of the region.

Certainly won't be done by AAOG at any point.

MS

Nice post Tiburn. Thanks.

However, they are wrong about the size of the storage capacity. With only one day worth of storage you put unnecessary risk on the supply chain. You will always put in a minimum of the maximum normal to be expected business interruption, which is usually two days.

In the two days you can still produce from your field while you can fix whatever you have to fix. Even when you use pipelines. IN fact, I would put in two 1,000 cbm tanks to make sure that you have max flexibility. You don't want to have to stop producing, unless the refinery is down for a longer term.

MS

Hi Pg,

yep you could be correct.... or I. We posted about this last time ;-).

Anyway, we will see. How I wish to be on site, for many reasons, not just gold and copper ….

MS

TomE, last week Reddirt notified us that the second drill was on it's way. This is in line with GHG stating that the second drill would be coming soon but started with one drill.
with 1.5 weeks per drill that means one drill has done 2.5 drills and one is to start. With one week per drill it means 4 drills done.

Just another perspective.

MS

30% more buys than sells and we are 7% down....
Go figure.

MS

Copied the stages 1 and 2 deal here below:

o Stage 1: Newcrest incurs US$10 million in expenditure (inclusive of the Minimum Commitment of US$5 million) in relation to the Tenement Blocks (the "Stage 1 Commitment") within a period of 12 months;

o Stage 2: If Newcrest incurs an additional US$10 million in expenditure in relation to the Tenement Blocks (the "Stage 2 Commitment") within a period of 12 months from the date following satisfaction of the Stage 1 Commitment, Newcrest will earn a 40% Farm-in interest;

The minimum spend is USD 5 mln. They would just not complete stage 1 to avoid having to get to that USD 10 mln.

However, what jumps out at me reading this again is that NC actually don't get anything for the money spent until end of stage 2. They are going to have to complete stage 1 AND 2 to actually get a share in the HV, which is 40% after completion of stage 2 and spending minimum of USD 20 mln. Correct? That is an even better deal than I already thought it was.

In the mean time, while NC is 'aggressively' drilling out HV, GGP is drilling BH and Firetower to prove up that massive potential.

MS

PG, from my recollection the minimum spend is indeed USD 5 mln. The spend can stop then never coming to USD 12 mln if results at HV are unexpectedly 'not good'.

On that, IF HV is not good, by the time that emerges we have the other drill campaign results out. They won't all be bad, if any even are ;-) That is the beauty of this company now.

NOT a one trick pony.

MS

Dsmith, besides the fact that you produce a consistent 2000 bbopd instead dwindling 1500 to 500bbopd , which is a substantial difference over a year, the topside needed for 2,000 bbopd is very likely a lot simpler and quicker to put in place than for 5,000 bbopd. Long term you would want to have at least 2,000 cbm of storage capacity on site to cover for any two days logistics fall out. This is not so easy to get and to put in place, either ready made or constructed on site (welding, etc). In case of the 2,000 bbopd short-term option you get away with as little as 400 cbm which you can buy almost everywhere very short term.

Hope this helps.

MS

Think about what you just wrote there HS.
There is a 20ft piece of concrete in the drill hole. It was supposed to stop the oil flowing out. It didn't for whatever reason. Good ness is that the oil is from the Djeno and it's flowing on it's own. That is what was RNSed.

Not much more to say as the flow rate is totally irrelevant compared to an unobstructed flow when there would be no concrete plug. Hence they did not RNS the flow rate as it means nothing.

Hope this helps.

MS

TomV, that is exactly my sentiment. Not happy with the Sp where it is now but that is not why I invested.
I invest on the basis of assets and management. Those are good here.

The fact that we have multiple assets is great and reduces risk.

The fact that NC was willing to put USD 5 mln into proving HV means all to me. They know the area really well and although USD 5 mln is not much for them, they would certainly not invest such amounts if they didn't think there was a good chance of the gold actually being there in the required volumes and qualities.

It is that simple, and that is why I am not bothered by the current SP as that is not why I am here. Couldn't change it even if I wanted ;-)

MS

Marine, how does that work then that you knew (pas tense..) that 20p would never be reached again.

That can only mean that you did/do not believe that the Djeno can produce at 5,000 bbopd… because

5,000 bbopd * USD60/bbl * 365 days * 56% share = USD 61 mln or GBP48.5 mln per year.
With 238mln shares in issue that is 20p per share. Sure, that's a bit crude calcs but that's only one year and no multiples used either.

Not saying that the way process is run by AAOG is great, far from that, but I can't understand that the wells around us are delivering this production (and better) from the Djeno and you concluded (.) that 20p will never be reached again... How did you get to that conclusion?

MS

If we get to 5,000 bbopd, can we still truck that? Well, let's see.

Typical oil trucks go up to 43,900 liters. That is about 37 mt per truck at API 36 (845kg/cbm).

A bbl of oil has 158.987 liters hence that truck can hold 276 bbl. At a production rate of 5,000 bbopd it means only 18 trucks per 24 hours or a Truck every 1.5 hours.
Would be crazy to build a pipeline for that.

If the refinery is an hour away it takes a truck 3 hours for a round trip (half hour filling, hour drive, half hour discharge, hour drive back). That means at a production rate of a truck load every 1.5 hours you can do this with 2 truck on a continuous rotation. Add an additional truck (or two) to cater for delays on the road. Add a couple of buffer tanks (2000 cbm total) to cater for 2.5 days of production in case of delays, road blocks or so and we're on our way.

So, the answer is yes, we can easily truck 5,000 bbopd to a refinery which is about an hour's drive or so away. Why build a pipeline which hold delays to build, and costs.

MS

Cool! I've been plastering walls. Some successful as well ...
No worries, I get told off all the time so this BB is just another dimension ;-)

JD,
Still waiting with great anticipation of that post you promised.
MS

Spike does have a point there Skittish. Tried that but couldn't. Had to go and chase through the courts as couldnt base withholding payments based on contract clauses.
So, it always depends on the detail of the underlying contract, which we don't know. Surely if they have withheld payments then they must have had a good base for it in the contract. Alternatively, they may just have been balancing their own books until SNPC started paying up....
MS

Exactly HAT.

In the grand scheme of things a couple of percent sold or bought doesn't make much of a difference in the long term. Someone will buy them ;-)

Soon everybody wants them.

MS

If you look at the trading pattern you find that at the start there were more sells.
However that changed mid morning and now more and larger buys but the SP isn't responding upwards.

Small volume anyway.

MS

I would agree clumpet. Makes no sense to take the risk of any concrete to damage the infrastructure. So, must be another way to get into production and from what I have read on here drilling out the concrete plug seems the most sensible. Side tracking was classified as complicated too by someone on here.

Hopefully we will know by close of play tomorrow.

MS

Thanks PG, indeed in the interview published on the 22md of May 2019 GH states that NC had started with one rig and the second would follow shortly.

So, sounds to me that they have been drilling with one rig until now. However, I conclude that from what this reddirt person has posted as GGP nor NC have informed us of when the second drill will commence or has commenced.

Does it matter? Only to manage expectations.

MS