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This post has been shared a few times with ref to: Angs announcement.
Its from Malcy's blog. Borrowed from Swizz on the PVR board but it was on the EOG board on another forum.
From Malcy's blog ref: Angs announcement yesterday. Hopefully the start of interest reappearing in the sector.
It will come as no surprise to readers to know that I am not one bit surprised at this announcement nor even that it is Angus that has started the process off. This is a cyclical industry and we are at the point at which the vultures have seen a great deal of hard work and a massive amount of investment injected in projects which are at the tipping point of very substantial returns.
A while ago when I first started writing about Angus post its corporate disaster zone I met CEO George Lucan who gave me chapter and verse about his dreams for Saltfleetby, I believed the story then and now someone has seen it grow into a perfect sized asset in an international gas business which only becomes obvious when it is on the evening news.
For Angus there is only so much one can say because it is now in a bid situation but the way that the market has unsurprisingly hugely undervalued its assets is regrettably the case across the board, so investors should look at other assets equally undervalued if they havent already done so. The fact that Angus has rung the first bell is of massive credit to the CEO and the board who are allowing shareholders the chance to evaluate what appears on the table. After a long time in which the value has lain unnoticed, it is time for the bidders to put the money down, if it is not enough let’s hope the shareholders don’t follow the disappointing record of institutions caving early and cheaply..
I have been very positive on the oil price since the bounce in mid 2020 and last year the price was up over 50%, this was at a time that oil companies cut costs to the bone, sometimes way too much, leading to the price rises that are already coming through. But do not forget the natural gas price which for different reasons has increased by even more than oil since then and has also left a vast panoply of undervalued assets.
Speaking to a leading fund manager recently on how this is panning out for investment in the hydrocarbon sector this year he put it very succinctly. When huge cash flow meets significant capex and opex reductions, the profitability and the inevitable cash flow of the sector is going to result in growth in earnings, asset values and shareholder returns. With WTI at $80 today the scope is incredible and by that I mean downside, after all most companies are doing their sums at say, $50 but most work down to $30, just what are the returns on that basis?
So, Angus has fired the starting gun but as I said it could be anyone.
From UJO RNS this morning.
US$2,000,000 revenues generated to Union Jack at Wressle since re-commencement of production on 19 August 2021
-- Well is producing under natural flow
-- Production remains constrained on a restricted choke
-- Zero water cut
-- Staged site upgrades ongoing
-- For the first time Union Jack is now cash flow positive covering all corporate, administrative and project operating costs
Good news from Chariot this morning in Morocco.
hTTps://www.businesspost.ie/energy/esb-cancels-three-more-contracts-to-build-gas-power-plants-in-dublin-463a0ecd
Posted by Tommy241 on one of the other boards.
Https://www.irishtimes.com/business/energy-and-resources/rising-demand-stagnant-supply-burning-questions-for-irish-electricity-network-1.4767937
Nice to see a bit of life appearing in the share price as well. Good luck to all holders and hopefully 2022 is finally our year.
Also those estimated earnings for 2022 are based on our share of Wressle at 500 barrels a day.
Hopefully that will increase plus the extra from the gas in time.
I think we've all been ground down but news now does seem to be turning in our favour and the revenue the company should soon be bringing in will be the highest since I've been a holder (9yrs).
Lets hope we all look back in 2022 and say why didn't I buy more when these were a penny.
hTTps://www.euractiv.com/section/energy/news/gas-and-nuclear-fate-of-eu-green-taxonomy-now-in-the-hands-of-von-der-leyen/
https://www.thetimes.co.uk/article/new-north-sea-oil-fields-may-go-ahead-if-they-cut-imports-q92ppznxs
Some useful info/valuations in Finncaps end of year figures for Europa ending October 2021.Hopefully we will get the CPR before year end.
From Finncap's morning note today. Link is on the EOG website.
Wressle continues to exceed expectations Production from Europa’s Wressle-1 well continues to exceed expectations despite operating on a highly restricted choke. The full potential of the well will only be known in early January once gas handling bottlenecks are removed, but current performance suggests further upside. The focus at Wressle will then shift to optimising gas monetisation – small quantities are highly valuable in the current pricing environment – and developing the remaining contingent resources, which are three times larger than those currently producing. - Wressle continues to exceed expectations. The Wressle-1 well (EOG 30%) continues to exceed expectations since the successful proppant squeeze and subsequent coiled tubing operations in August. Works to upgrade the gas incineration system have now been completed. Despite operating under a highly restricted choke whilst the upgrade works were ongoing, Wressle produced at an average rate of 666 barrels of oil per day (200 bopd net to Europa) plus 368,000 ft3 of gas in the last week, or 727 boepd (218 boepd net to Europa). No formation water has been produced to date. - Full potential of the well yet to be fully tested. A secondary separator system has been designed and manufactured and is expected to be installed before year end to optimise gas/oil separation. Early 2022 will then see completion of testing of the full potential of the well, after which a decision on the optimal plateau production rate to manage the reservoir will be made. We currently assume average net production from Wressle in FY22 to end-July of 197 boepd. - High-margin barrels. Wressle-1 production is highly valuable to Europa as these are low-cost barrels with an oil price breakeven of ~US$18/bbl. At US$70/bbl, we estimate Wressle-1 should deliver ~£3m of cash flow to Europa in FY22, providing a solid underpinning of its valuation and allowing management to advance other growth opportunities within the portfolio. At US$60/bbl long-term Brent, we value Wressle-1 at 0.8p/sh. - Low hanging fruit. The focus at Wressle will shift in 2022 to progressing optimal gas monetisation and finalising development plans for the identified contingent resources – notably the *****tone Flags reservoir, which has a 2C resource of 1.86 mmboe, almost 3x the Wressle 2P reserves. Two well tests have historically been performed on the *****tone Flags gas cap and oil leg, flowing oil at rates of 50 - 250 bopd and gas at 0.5 - 2.0 mmcfd. Development would be relatively straight forward, involve limited capex and could happen quickly. The project should also get a much smoother path through the planning approvals process, given the partners successfully appealed against North Lincolnshire Council’s objections to the initial Wressle project. We currently value the Wressle *****tone Flags interval at 0.3p/sh within our risked-NAV at US$60/bbl Brent.
You're not alone Tacuma,
From PRD RNS this morning.
Ireland has been transformed in 12 months. At the beginning of the year gas was side-lined in Ireland. At the end of the year another Corrib gas field is required to supply 9 new gas-fired power stations. Our strategy of hanging in there and providing a technocrat's view of the Energy Transition has served the Company well
Posted by BillyRayVal on the PRD board.
https://twitter.com/ole_s_hansen/status/1470300485299150850?s=21
"EU #gas jumps 10% on the opening to €116/MWh (>$38/MMBtu) on low stocks and #NordStream2 worries. On Thursday the EU Council meets and on the agenda is a proposal to reclassify #gas and #nuclear as #GreenEnergy."
So if reclassified as such, I'm not sure how the Irish politicians will be able to argue any more about gas not being green!
Two good posts by Swizz on one of the PVR forums regarding Ireland.(13/12/2021)
It doesn’t look as if that €100 energy contribution gimmick is going to go very far in January, as new close of business highs were reached across European natural gas benchmarks, they closed today at record high settlement prices (intraday was higher in October) the Dutch TTF closed at at €116.084 per MWh and UK NBP closed at 294.54p per therm, That's ~$220 per barrel of oil equivalent!,…GL S
It’s also going to be a testing few days ahead for Minister Ryan, with EU leaders meeting on December 16th, to agree on measures to boost the EU energy resilience, the Commission wants to propose a more strategic approach to gas storage, including measures to ensure a high filling level of storage tanks at the beginning of the heating season and also to agree an end date on Russian supply contracts, plus on December 22nd the EU will be issuing it’s plan for how natural-gas and nuclear-energy projects would be classified under its green investment rules, Ireland’s energy security fragility will be very much under the microscope,…GL S
You'd certainly think with Brian O’Cathain being on the Nelphin board would help.
Apologies, posting from mobile device. It's a rehash of the story on the Irish Offshore Operators twitter feed.
Https://twitter.com/OffshoreIreland/status/1470341295440908289/photo/1
From the PRD board...
https://www.irishtimes.com/business/energy-and-resources/republic-will-need-equivalent-of-another-corrib-gas-field-to-
supply-power-plants-1.4753491
Thanks from me as well CCF.