focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
ExploratIon - These are historical wells and none of the drills were on 3D or modern technology. I suspect u believe shell uk are drilling to for fun
$21.3m minimum carry value with Cairn energy and shell
- Pensacola 3D carry net $5m benefit to Deltic & all associated licence costs to 31/03/2021
- Selene 25% well carry net $7.5m benefit to Deltic & $300k cash payment.
- Cupertino 3D net $5m benefit to Deltic & all associated licence costs to drill and drop decision.
- 10% well carry on either Cupertino or Cadence net $2.5m and $1m consideration payment.
- Cadence remapping and potential additional 3D, dependent on work programme but all licence cost carried to drill and drop.
- P2560, P2561 and P2562 2D processing /3D in the future dependent on the work programme
– The deltic shares is selling at a big discount to the risked NAV valuations for the five leading projects Pensacola, Selene, Cupertino, Cadence and Dewar.
– High impact drilling planned in 2022 on Pensacola and Selene that has transformational potential in a success case.
– The work programme until the end of 2022 (including 2 drills)is fully funded and the company has no debt. Note $1m consideration due from Cairn Energy.
– Deltic’s strategy is endorsed by Shell and Cairn energy - With farmout for Pensacola, Selene, Cupertino, Cadence and the other 3 licences.
– Small but highly effective and experienced team with low overheads.
– UK North Sea gas prices at 10 year highs in a very stable regulator regime.
– Gas focused and well positioned for the energy transition.
Deltic obviously cannot comment on this until they know any benefits from the rig costs from shell and the Selene well decision is not made yet. Deltic are funded for the drill and drop decision on the 5 blocks with cairn energy but it’s likely they will look to put funding in place the end of 2022 for any well decision. We have 2 partners with deep pockets and that will see any discovery developed
Just to clarify the funding position in Delt £11.52m. End of March. If we take £2m a year cash burn to June 22, we are down to £9.2m and Pensacola and Selene costs are approx £8.5m, leaving £0.7m + £0.7m for cairn deal is £1.4m, which will see Delt fully funded to include working capital to jan 2023
To have volatility in the markets. All looking good in Deltic and hope we get a proactive video later this week to get the market to understand the recent transaction with cairn. Hopefully we can finish the week at 2.5p as uk gas prices now at £1.22 a therm.
How is it disappointing? These were never going to be drilled before May 2022...we are 8-9months off drilling and what’s the big deal?! When u got into Delt at the said 0.85....there was no confirmed drill at all. Maybe you should derisk if worried about activity. I very much doubt u hold now.
I think it’s a total waste of time trying to find negatives that probably don’t exist. Even cairn / shell will have exploration budgets and a certain amount of capital. Deltic have now removed all the risk of costs with cairn to a drill and drop decision. Selene and Pensacola funded after $1m payment from cairn. These shares are going to be in high demand .
End 2021 cash forecast of £8.5m: We look for a cash position at end 2021 of £8.5m which is up £0.5m compared with our March 29, 2021 note reflecting a reassessment of Pensacola outlays between 2021 and 2022. The cash forecast assumes G&A of £1.72m, up 1% on the previous year and £2.0m for project related outlays. The latter reflects £1.5m for Deltic’s share of Pensacola licence and project costs and £0.5m for other project- related spending.
Hefty cash outflow in 2022 of £9m reflecting two wells: For 2022 we are looking for a Deltic cash outflow of almost £9m. This reflects carryover financing of the Pensacola well of £2.50m, Selene well costs of £4.50m, other project related spending of £0.50m and an operational outflow of £1.48m. The overall outflow would imply theoretical net debt at 2022 year-end of £0.45m. This compares with net debt of £0.27m given in our March 29 note with the variance reflecting a slightly higher G&A assumption