Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Trust no-one or nothing except what comes from company RNSs.
Jimmy, do you know if SDX actually used sandjetting to overcome this problem? I'm trying to understand the COS factor with this tech approach. Management is confident, but not "very" confident that they can get through the drilling fluids thickness and flow test, but what if the thickness remains too thick even for sandjetting?
Kas/anyone,
I note the benefits below of using sandjet perforating technology to "offer a cost-efficient, safer and better-targeted alternative to hydraulic fracturing to bypassing deep near-wellbore damage."
Are the benefits a given, to test zones successfully, or is this only as good as the experience and quality of the O&G team using it, and so could still fail? As I see it, all depends now on this last piece of tech to demonstrate commerciality of a CNG operation, using existing funds at any rate. High high reward, but also higher risk than before, eh?
So, I've gone back to re-read the Jan 2024 Corporate Update rns, detailing the Guercif testing/drilling program .
This is what was written about Phase 1:
"Production forecasts are dependent on a successful outcome to the perforating programme.
The Phase 1 rigless testing of a small interval of the MOU-3 Moulouya Fan reservoir has only currently been programmed to evaluate reservoir quality and potential gas flow rates at this location. This may allow the Company to improve upon the design of the Phase 2 rigless testing programme using Sandjet to further evaluate the Moulouya Fan."
My take: you have to be a very clued up O&G investor/professional, to conclude that what was really meant in line one, was the risk of "formation damage". There is no other mention of this risk, anywhere. It's all about the establishment of flow rates to commence a CNG operation.
For the rest of us, who like to read plain English and get a straightforward explanation of what's going on, I feel shafted by PG. I don't trust him anymore. The as may well be there in its TCFs, as the uber bulls (you know who you are!!!), but every micro cap listed UK stock depends crucially on its investor base for its survival and financing. For 13 months now, since the MOU-2 disaster, we have been holding on to the dream, and sucking up the bad news and management excuses.
Enough, for me, now. Reluctantly, I have significantly reduced my large holding and will wait and see how the sandjet testing goes before making a decision on the rest, or to re-invest. I'm a grown up, so not blaming anyone else for my misfortune but I can't get away from the idea now that PG and Lonny are not up to the task here. The technical challenge is too great for them, despite all their years in-country.
I can see this play being taken over by a larger, deep pocketed entity, who will then extract the bulk of the supposed massive, world-beating potential at Guercif. Not my preferred scenario, but it has to be considered. At the very least, I am pretty confident that PRD will be back at the begging bowl for yet another equity dilution this year, well before actual cash flows come in from CM. This setback requires more time, and therefore a cash flow shortfall from a timing point of view.. Not a deal breaker in itself but another headache for long suffering shareholders to endure.
Looks like my post of yesterday morning was rather prescient, unfortunately.
Oh boy. The expectations being built up into this next set of testing and drilling results are by now off the map.
...that this is such an uplifting scientific dvance in the making, but such a lousy long term investment (so far)?
Jimmy,
And that's just for the Jurassic prospect.
The core Mou1,2,4 sands fields for a commercially viable CNG operation are all additional and higher probability of confirmation, at this point in time.
Kung Hey fat choy.
3 reasons why the multiple per TCf will be lower, Keith:
1. Syndicated bank debt finance for fossil fuel- based capital projects is not so easy to come by now.
2. The number of potential suitors for a large scale, multi-year fossil fuel project is also limited compared with the go-go Cove Energy years. Looks like the once mooted Israeli connection can now be ruled out, for example.
3. A local Moroccan buyer, possibly the offtake partner for a CNG deal initially, may have the edge in any competitive challenge for the Guercif assets and may not have to ask for"top dollar" final price with some behind the scenes pushing and prodding. Games will be played for such a potentially lucrative asset. Keep in mind that Predator will never have the funds or the expertise itself to fully develop the field to its potential, and a willing buyer needs to justify to its masters and attractive ROI based on the purchase price, whatever that may be.
Oh, and 4, a range of 1-60 TCf renders detailed projections meaningless at this stage, fun as they may be, to read.
Subject to testing results and revised CPRs, there is much, much to look forward to and even at 1Tcf and $1bn per TCf, we can all see the value upside., in an onshore, low tax regime, low opcost environment at Guercif.
Preferring to be uber conservative at this point, but waiting for the eventual corporate transaction....
Hold this thought for 3 months then let's all re-visit these sentiments and see who was nearer the truth.
Well, maybe so. It certainly is the case that we have reached the "show me" stage now, with no place else to hide. I fully expect positive testing results to be followed by one or more commercially lucrative deals in short order, otherwise the sp will continue to track along a broadly sideways pattern that it has over the past 2 years or so. For me, the risk/reward is off the scale, but nothing is guaranteed in life, except you know what....
Legalwolf, eat your heart out.
We are going into a news-rich period in PRD's life cycle now. Hold onto those golden tickets for dear life, tempting as it may be to trade, take profits after a sudden jump or become obsessed with near term developments. This is going to be a full year story, at the very least. And thank you to the very knowledgeable posters who put in time and effort to explain their thinking about the potential enormity of what we have here. My 0.8% of the company isn't going anywhere, soon. GLA.
Yes, good news albeit another legally non-committal LOI.
The waiting game will go on, unfortunately, as the bulk sample requested by various Chinese entities will not be tested and purified until the end of this quarter, and then BRES must wait for commercial responses, however long that may take. So, best outcome is probably supply offtake deal(s) by mid-year?
The numbers underlying today's RNS are solid from a cash flow generation point of view, but hardly transformation along the lines being discussed regularly by the leading lights here all last year. $80mn discounted npv for CM isn't. A 10-20mmcfpd CNG operation isn't.
This whole RNS is uninspiring, but maybe that's the point. Bring us all down to earth in terms of expectations, which went too far the other way last year, and then pleasantly surprise on the upside.
I can't see any explosive reaction in the sp from this one. But it should provide a much needed floor from which to rise through Q1.
Gudin, your 10.37 post is spot on. There was some wishful thinking in the last PRD rns on this subject.
I can only conclude that an outright sale of the Moroccan interests is being worked on as soon as the flow tests come back as expected, or better, OR, another placing will be required in H1 2024, to fund more drilling. My only wish is that future placings, inevitable for development stage small listed entities, will come at progressively higher prices and that we finally get out of this two-year long trading range around 8p.
Yes, Gudin, there are grounds for believing the last rns, hyping near-term cash flow from CM and a revised CPR, was fluff to soften the blow of no flow test results from Guercif in this quarter, or indeed this whole year.
The flow test numbers now need to be timely, and robust economically, as posters like Jimmy believe it will be, and then the focus will shift right back onto the upside of the Guercif licence and cash flow creation, away from CM.
It seems patently obvious that more drilling at Guercif needs cash from a CNG operation, as the logical funding source. I cannot countenance yet another placing at this level to move things along. Who can?
Fingers crossed that there will be no more regulatory or techbnical obstacles in the way of a January flow test.
That's why, with investor sentiment here so beaten down by delays, regulatory hurdles, technical obstacles, when the flow test results do come out and likely surpass measured expectations, PRD could witness a standout valuation uplift almost immediately, that will surprise by its momentum as little is built in now.
Any guesses on opening spread next Friday/Monday week, assuming things work as they are supposed to?
Mine's 15-19p.