Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
As Zebra correctly says, it's the unavoidable delay in manpower-intensive workovers that is slowing progress in the field but attention has rightly turned to expanding the CO2 EOR Services business.
In early June PG announced the collaboration agreement with Lease Operators, the first Services contract, and LOL have the advantage of a juicy 10 year contract with Heritage. Bonny Lonny has now been tasked with overseeing the 'next stage', consolidation of opportunities with in-country producers showing interest in increasing output through CO2 EOR.
Fair to say we're due a comprehensive Trinidad update but we do know that injection continues in the AT-4 block, well workovers are being progressed as fast as circumstances allow and, as far as we know EOR production remains on track to produce top end 521 bopd, split 50:50 with FRAM, by this November. See Pg 19 annual report for income guidance.
All the foregoing said we’re all aware that PG marks this asset as the first to be monetised and, as has been suggested by others, ‘sacrificed’ to provide funding towards Moroccan progress. A possibility that can’t be ruled out.
Wouldn't it be so nice, and professional, to one day deliver a news release that doesn't leave readers with more questions than answers. A crystal clear communication requires massive improvement by PRD.
I live in hope rather than expectation.
Noting the AR comment ‘the company might still seek an acquisition of FRAM if new commercial terms were to be negotiated at any time in the future’
The Trinity Innis field consists of 86 wells (granted, not all suitable for CO2 EOR ops).
OIIP estimated at 89mmbo with cumulative production of 23mmbo to date and contingent CO2 EOR oil resources in the range of 5.3mmbo (lo) to 8.9mmbo (hi). That is a lot of oil!
Both PRD and CEG find themselves in far different circumstances since the rejected $1.75m offer a year ago.
CEG declared approx. $10m held in cash/cash equivalent end of May but the bulk of this subject to disputed claims that require resolving. Their future heavily relies on success with their Saffron field (profit on a barrel of oil double, maybe more, than that from TI) and their Suriname assets. Lots of drilling required.
PRD are now of course partnered by Massy putting in place the necessary firepower and ability to hasten field developments. Couldn’t wish for a stronger partner.
So a bid of around $2.5m, equivalent to the cost of drilling a new Saffron well would, imo, be very tempting to CEG whilst boosting PRD’s future market value of this business section come monetisation. I see it as a win for both parties. But, maybe of greater relevance, the current T.I. IPSC between Heritage and FRAM requires renewal at the end of this year. Events could prove most interesting at this point in time.
Let's not forget that PRD already have a solid partner in ONHYM, both parties must be in deep discussion as to the way forward following these latest findings.
Unless legislation forbids the state oil company from a greater than 25% interest in a foreign company's activity, Which I doubt, a compelling case (MOU4) for increased investment, say to 35%, in return for a covered drill cost may be attractive to both parties.
Retaining 65% and full operatorship, without recourse to fund raising would, imp, not be a bad outcome for PRD.
Purely thinking aloud.
I'm thinking it won't be long before Paul comes back to shareholders with a far clearer breakdown and comment on today's news together with guidance as to any changes to strategy and direction.
Should put the boat back on an even keel.
GRH,
OK, when you are able to reply then would be appreciated.
I note my original post was removed very quickly, and yet it was a straightforward question that should not have caused upset or given reason for removal. So Beware, there are dark forces, or influences at work!
2021 is possibly a pivotal year for the Company in terms of production income from Trinidad and the high impact of any drilling success in Morocco. These factors could potentially very much enhance the Company's financial credentials to finally secure the Ram Head successor authorisation.
Pg 7 AR.
More bedtime reading from the book of the month.....
Page 22. The TGB-2 reservoir objective is considered to have the highest chance of finding gas (VERY CONSERVATIVELY estimated at 34% by SLR Consulting (ireland) Ltd's CPR).
My Caps but how many CEOs would have the confidence to state their opinion in writing and so add to expectations.
Good on you Paul.
Received a hard copy Annual Report yesterday, probably the best presented essential literature any company has produced for their s/holders. Oozes professionalism, well done Paul & co. Many of PRD's RNSs are released aimed at guidance to others in the industry, this report will impress likewise.
One query that others I'm sure can offer guidance . . . . . Page 34, Paul states,
'Confidentiality agreements .. (NOTE PLURAL)... have been signed with the Group's preferred LNG supplier and the provider of FSRU etc etc'. The question being are there two agreements here, one of which has yet to be advised, or when Paul refers to Hoegh as the supplier, does he mean in essence the carrier? Appreciate others interpretations, thanks.
GRH..., we keep reading of your £15 target total return, I wouldn't disagree, it should be seen as entirely possible.
But in what timescale. There are relative youngsters that have decided to invest here and who are not particularly bothered by the time it takes to show a decent return. There are others longer in tooth, I include myself, that were attracted to PRD by PG's stated exit strategies and timelines. I cannot, for instance, see monetising T&T occurring by Q1 '22 as intimated by PG and in many ways it would probably be seen as far too soon, resulting in largely missing out on CO2 EOR's explosive growth.
So I'm interested in your opinion as to when you feel £15 total value will be seen by s/holders. TIA