RE: £2billion+8 Jun 2022 11:50
FF,
"Cant see any approach till NE drill results IMO , which if successful should see a good addition to reserves. Maybe £2 billion/£7 a share achievable after that !.."
Agree that should NE come in then metrics do change. I would put around ~£5boe on any commercial discovery ( until they confirm it as 2P's ) and favourable accompanying data given proximity to Bruce and of course it would then de-risk SE too which may add ~£2boe to estimated p50's. Combined Eigg could add ~£380m pre CPR, which in turn would alter my evaluation to ~£1.68bn or ~620p/s. You also have the variable of commod prices, come EoY could add significant amount to our CoH.
Flip-side is NE could do a R3, massive over-run on both cost and drill time and end in P&A (as per BP), commod prices fall-away, which of course would drain our cash a little more but not materially affect my original estimated valuation of ~480p / £1.3bn as reasonable opening offer.
So, little downside from here, but plenty of upside to play for. Will ACW et al be able to ignore an offer tomorrow >480p/s, hummmm who knows. NE discovery would for certain open SQZ up to an approach, given Rishi's tax benefits going forward to get production on-line in 2025-26. Failure at NE would leave SQZ's cupboard totally empty for the foreseeable so our board really need to have something in their locker just in case so I would expect, would need, to see some form of corporate action between now and NE results, if not very shortly afterwards. Maybe that's why they have asked for SH's views at AGM ....they have run out of ideas, lol.
N Eigg is a binary drill afaic, success will be a mammoth leap forward for SQZ, failure will see us parked on the hard-shoulder waiting for recovery services in the form of another deal.
aimo & dyor
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