Member Info for MountTeide

£200 million has been raised in equity and debt !

And nearly all spent if you believe the laughable carrying value of the assets in the accounts.

My estimate of the cost of the build out to date is £30m and thats being generous !

The last paragraph of the Buffalo project overview is very interesting ...... as it suggests in the event of commercial success with the Buffalo 'Attic' well, the field life of the development could be considerably extended in a very cost effective way, by redeveloping adjacent fields that were previously abandoned while still delivering relatively high flow rates through Buffalo's ultra low cost OPEX shallow water production handling facility.

'A great deal of information about the Buffalo target is known from its previous period of production. We know that the field contains high quality light oil like that at Dorado, and we know that the reservoirs produce at prolific rates initially.

We also know that there are major operational and cost advantages in this field residing in shallow water depths of around 30 meters.

On this last point, in the Buffalo-10 well success case, there may well be the opportunity to aggregate nearby resources from exploration within the PSC and CVN-controlled adjoining permit, and potentially from former nearby fields which, like Buffalo, were still delivering flow rates of around 3,000 to 4,000 barrels of oil per day when abandoned.'

Savannah Energy PLC commences gas sales to First Independent Power Ltd’s 180 MW power generation plant

Mark's SAVE's entry into the high growth Port Harcourt Industrial Area

hTTps://www.youtube.com/watch?v=Roe84MryWmQ

Glencore to sell Chad oilfields to Perenco - Reuters - 4th November 2021

'Glencore has reached an agreement to sell its oilfields in Chad to Anglo-French oil company Perenco, a company spokesperson told Reuters on Thursday.

Mining and trading giant Glencore entered Chad in 2012 and acquired the oilfields in 2014. But the purchase took place just months before a major oil price slump in 2014, and Glencore put the fields up for sale in 2019.

“Glencore has reached an agreement with Perenco S.A. for Perenco to acquire Glencore’s Chad upstream oil assets," the spokesperson said.

"The Transaction is subject to certain conditions precedent, including the approval of the Chad Government," he said, declining to say how much the deal was worth.

Perenco did not immediately respond to a request for comment.

The oilfields produced about 7,700 barrels per day (bpd) before Glencore placed them on care and maintenance in early 2020.

Perenco, which is active in 15 countries, including several in Africa, is known for acquiring mature oilfields.'

Doubling production in H2/2021 could not have been better timed by the management to leverage the $30/bbl rise in the Brent price in 2021:

Operating Cash Flow Generation/yr:
$110 million - at production of 10,000 bopd at $52.5 Brent in Jan 2021
$481 million - at production of 20,000 bopd at current $82.5 Brent price

The result - a 337% increase in operating cash flow - this demonstrates well the Power of Leverage that a rising oil price has on a largely fixed cost operation; and in particular, when the overall OPEX/bbl is materially lowered by a production increase (Montara) and newly acquired production(PM) with a very low OPEX/bbl.

The Power of Leverage in a rising oil price environment:
Production of 20,000 bopd at $82.5 Brent produces the same operating cash flow at $20/bbl OPEX as:

28,700 bopd at $62.5/bbl Brent
36,666 bopd at $52.5/bbl
50,770 bopd at $42.5/bbl
82,250 bopd at £32.5/bbl
155,200 bopd at $25.0/bbl

AIMHO/DYOR

A highly indebted second tier Indonesian Coal Miner looking for its first mining industry diversification project is a step up from the professional shysters at Aeturnum, who gave Manini the mother of all public rogerings......a disaster that cost long suffering shareholders a four fold dilution for sweet FA.

Initial market reaction to today's news seems highly muted.....suggesting a high level of anxiety that if another high risk throw of the dice to keep Manini in the lifestyle he has become accustomed to at shareholders expense is the best he can come up with; then the assets have proved to be not very attractive to specialist industrial metal miners, who the market were led to believe had been in the data room in numbers.

AIMHO/DYOR

Jadestone could not have timed better the doubling of its production to 20,000 bopd at sub $20/bbl OPEX - with the Maari deal potentially taking it to 23-25,000 bopd (plus a circa $70m cheque) , the stage looks set for a tremendous 2022!

Bank Of America Sees $120 Oil By June 2022 - Oilprice.com

https://oilprice.com/Latest-Energy-News/World-News/Bank-Of-America-Sees-120-Oil-By-June-2022.html

Average sales price in H1/2021 was $4.2/Mcf ($25.2 boe), up 7.7% on H1/2020

H1/2021 - Production: 21,774 MMscf
$4.2/Mcf - Average Sales Price
$91.7 million - Revenue

H1/2020 - Production: 21,476 MMscf
$3.9/Mcf - Average Sales Price
$83.6 million - Revenue

Zen - exactly.... driven by the rising oil price, diesel has skyrocketed from N120/L in April 2020 to above N350/L ........the timing therefore is perfect to cut new gas supply deals with local manufacturers and businesses, most of whom rely on diesel for power generation in the face of the erratic power supply across most of the country.

That's new annual revenue of $22m up to $31m; virtually all of which will be operating cash flow, since the additional operating cost is negligible.

Very welcome news - 35 MMscfpd is circa 6,000 boepd .... supplied at an operating margin of probably close to the current 80%.

With respect it might be an idea to become acquainted with the fundamentals by reading the CPR and Brokers Notes before making an investment !

Both state 18 months to 2 years post the B-10 well appraisal before first oil - which by offshore standards is very quick !

The Conversion of a tanker for use as a FPSO take circa 18 months ! For a purpose built new building FPSO its 4 years !

According to recent research by PcW, six of the seven largest economies in the world by 20250 are projected to be emerging economies, led by China (1st), India (2nd) and Indonesia (4th)

The US could be down to third place in the global GDP rankings while the EU27’s current 16% share of world GDP is projected to fall to just 9% by 2050( the corner shop that time and highly protectionist policies left behind).

China, SE Asia and India - with a per capita O&G consumption of just one tenth of the transitioning West, it does not take a PhD in Economics to work out where the growth in energy demand will be coming from over the next 30 years.

2000 - GDP US$
$2.4 trillion - GDP of China, SE Asia and India

2020 GDP US$
$2.3 trillion - Africa - (52 Nations and pop of 1.34 billion)
$2.5 trillion - UK
$16.0 trillion - EU
$22.0 trillion - USA
$33.0 trillion - China, SE Asia and India

2050 - Estimated GDP US$
$27.0 trillion - EU
$29.0 trillion - Africa
$48.0 trillion - USA
$60.0 trillion - China
$120+ trillion - China, SE Asia and India

Source: The World in 2050: PwC

ADV's business strategy is very similar to that employed highly successfully by the management at Jadestone Energy (and when previously when at Talisman Energy) for well over 20 years......

Buy carefully selected, priced to sell, modestly run mid/late life producing assets with re-investment potential and undeveloped discoveries with proven resources that can be developed and quickly brought to production cost-effectively, that are being sold off by larger players exiting maturing O&G basins.

Then use their proven expertise as a specialist second phase asset buyer/operator to lower OPEX while maintaining/increasing production. When Talisman Energy took over the the Beatrice and Buchan fields from BP, the oil major reckoned the fields had 18 months to 2 years commercial life left ....some 20 years later Talisman were still profitably operating the fields.

Jadestone's first producing 'one trick pony' asset was the Stag field in NW Australia, acquired from Santos for a net $6m in late 2016, after a $50m offer by a SE Asian O&G company fell through due to the field having $60/bbl OPEX in a falling oil price market(it bottomed at circa $30/bbl). Shortly after Jadestone completed the deal in 2017, oil was back above $60/bbl and they had got the OPEX down to $30/bbl......within 18 months at $75 oil, the field was throwing off $8m a month in operating cash flow for an asset they paid $6m for.

After starting Talisman North Sea and SE Asia from scratch, they developed both companies into mid caps that were subsequently sold for circa $5bn and $6bn respectively.

Like Jadestone Energy, the Advance Energy management look to have the track record, industry expertise and reputation to secure the financial backing necessary to quickly grow the company into a significant player in the very fast growing, high demand, premium priced Asia/Pacific energy market, where the buyers market regional O&G basins are currently being vacated by the majors as they transition into renewables.

AIMHO/DYOR

IMO 2020 preparation spike aside, ship bunker prices hit further new 7 year highs this week, not seen since the days of $100+ Brent during 2010-2014.

At today's $86/bbl Brent price, Jadestone's Stag production should be realising circa $93/bbl inclusive of the most recent regional premium to Brent.

Marine Fuel Oil and Major Oil Benchmark pricing - Change compared to pricing on 9th December 2020 in brackets - (all prices rounded to nearest whole number)

$122 / (+43) - Marine Gas Oil - APAC Average
$102 / (+38) - VLSFO - APAC Average
$93 / (+35) - Jadestone / STAG - $10.15/bbl latest premium to Brent)
$87 / (+35) - Jadestone / Montara - $1.5/bbl latest premium to Brent
$87 / (+35) - Jadestone / Peninsula Malaysia - est $1.5/bbl premium to Brent
$87 / (+35) - Maari - est $1.5/bbl premium to Brent
$86 / (+37) - Brent
$86 / (+42) - High Sulphur Fuel Oil - APAC Average
$84 / (+36) - WTI

At today's Brent price, 2021 guidance OPEX and latest IMO 2020 premiums to Brent, Jadestone should be realising circa $67/bbl operating cash flow for its Stag and Montara production, and circa $69/bbl for its Peninsula Malaysian production.

With estimated current total production of circa 19,500 bopd(13,000 bopd /Montara and Stag - 6,500 boepd / PM), Jadestone should be realising circa $482 million/yr of gross operating cash flow per year, with the potential to increase to $543 million/yr by December on completion of the Skua and Swift work-overs, and up to $629 million/year on completion of the Maari acquisition.

Current market cap: $552m.

Estimated Annual Revenue at $86/Brent:
$627m - Current
$707m - Plus Skua and Swift Work-overs (Early November)
$819m - On Maari Completion (plus a circa $65m-75m net consideration cheque)

AIMHO/DYOR

RISC CPR
'Production is initially constrained at 30,000 bopd by the oil handling capacity with a plateau duration of 0.7, 1.3 and 2.2 years in the 1C, 2C and 3C realisations.'

'RISC estimates operating costs of approximately US$60 million per year'

Some thoughts:

This suggests an ultra high cash generation performance during the plateaux production phase:

30,000 bopd is 10.9 million bbls/yr - with estimated operating costs of $60m/yr, this would deliver OPEX/bbl of $5.5 at plateaux production.

Suggesting operating cash flow(attributable to Advance Energy) during estimated PLATEAUX production of:

At today's $85/bbl Brent price
$313 million - 1C (8.5 months)
$585 million - 2C ( 1 yr 3.5 months)
$989 million - 3C ( 2 years 2.5 months)

At $60/bbl Brent
$218 million - 1C (8.5 months)
$403 million - 2C ( 1 yr 3.5 months)
$683 million - 3C ( 2 years 2.5 months)

The Buffalo Field was abandoned in 2004 while still producing 4,000 bopd - Brent then was $25/bbl

Buffalo Redevelopment Plan
Operating Cash flow at 4,000 bopd and $60 million OPEX/yr:
@ $38.5 Brent - Zero
@ $60.0 Brent - $16 million Net to Advance Energy
@ $85.0 Brent - $34 million Net to Advance Energy

Production level producing ZERO Operating Cash Flow Level at various Brent Prices:
1,878 bopd at $85 Brent
2,630 bopd ar $60 Brent

AIMHO/DYOR

'Tennyson's April 2021 note said...

"At US$60/bbl Brent price we value a redevelopment in excess of US$200m (>12p/Share) unrisked, net to Advance."
This looks conservative:

From the CPR, using the Contractor NPV tornado diagram I calculate the value of redevelopment(net to Advance) at $60 Brent to be $239 million(14.9p/share inclusive of the regional low sulphur light sweet crude oil $2-3/bbl price premium to dated Brent)

Value of Redevelopment(net to Advance Energy):
$297m @ $70 Brent (18.40p/share - with regional oil price premium)
$356m @ $80 Brent (21.90p/share)
$412m @ $90 Brent (25.30p/share)

So, at today's $85 Brent the value of redevelopment(Net to Advance) could potentially be in excess of $384 million (24.16p/share) for the 2C scenario, 41.97p/share for 3C, and 17.33p for 1C.

AIMHO/DYOR

175 million shares(17.5% of the company) has changed hands in the last week.

The purchase price of the Buffalo farm-in was negotiated when the price of Brent was circa $40/bbl.

In the event of success with this 95% COS drill, at $85/bbl Brent plus the $2-3/bbl regional premium, the economics of the asset are beyond transformational.

The Buffalo Oil Field is a proven oil field that produced 21 MMbbls of premium grade ultra low sulphur light sweet crude over 5 years in the early 2000s, at an average of 11,000 bopd for 5 years.

At today's oil price this would have generated $1.87 billion of revenue against the $525 million it generated in the early 2000's when Brent averaged $25/bb, before it was abandoned while still producing 4,000 bopd due to the low oil price.

More importantly, at today's $85 Brent the Field would have generated well over $1.25 billion more OPERATING CASH FLOW!

AIMHO/DYOR

L2 opened 3 v 3 / 4.0p v 4.20p

Quickly moved to to 1 v 2 / 4.3p v 4.4p (rest between 4.45p and 4.75p)