Firering Strategic Minerals: From explorer to producer. Watch the video here.
Useful analogy Wilfer - whilst no holder will be happy with where we find ourselves now, talking the SP down and creating fear and panic won’t help the SP and will likely have no impact on the end sale price.
Market sentiment has little to do with asset value, and that is ultimately for the bidders and Sound BOD to thrash out. There is a reason that Rothschild are involved, and might be useful to remember how long they’ve been retained now. They didn’t come on board for no reason that long back.
And whilst many of us have learnt a lot about O&G along the way, valuing a complex asset like this is not something that any of us is well equipped to do, particularly when their is a wealth of data that we are not privy to and probably wouldn’t understand anyway. Yes we have a feel for TE5 value, but the rest of the licence is data driven and complex, so we are all simply guessing. All we do know is that the TE5 asset alone is worth well north of where we are now.
So best to let those who know how to properly value this, do so- and there in lays the rub. We need to trust JP and others to do this on our behalf.
So time to make a decision - let him get on and do this and bide your time, or sell out. Either way, constant whining isn’t going to influence the outcome.
Turtle, here’s the answer:
‘Except for smaller companies, at least half the board, excluding the chairman, should comprise non- executive directors determined by the board to be independent. A smaller company should have at least two independent non-executive directors.,
And you are bang on, NED’s are a requirement and don’t get paid huge money.
Company rules - must have a chairman and NED’s. as long as the company exists, they have to follow the rules.
And the fact he owns just under 1.7% of the company should incentivise him pretty heavily to steer us towards the best outcome that they can achieve. I’d rather that than a chairman with no shares.
How would you still be making a substantial loss if you sold for a pound? It was only ever very briefly above that, so unless you bought your entire stock above £1- struggling to see how you would be making a significant loss..
i too have spoke with Brian, and the key point from that was that no matter how good the seismic is or isn’t, it won’t tell you about reservoir quality - only the drill can.
Seismic predicted there would be gas at TE10 - and there was. So the seismic was correct in that respect. Getting is out at commercial rates is the issue and no amount of seismic will ever predict that - you have to drill it and test it.
Eric, that’s not correct is it. You know full well that the seismic was done by specialists and not sound. It is what it is and it’s used to identify where the gas is likely to be.
What it absolutely cannot do, is tell you what the actual reservoir quality is - only the drill bit can do this. The gas is there as seismic predicted, but reservoir quality is the issue.
All of that still has value, and when read alongside the Algeria example just given, a major will be more than happy to take an informed view and a much wider drilling campaign to find the sweet spots. Yes of course they won’t pay full value, but we have proved that the gas is there. And TE5 won’t be the only place in the licence where it will flow.
Exactly my thoughts - feels like they had an offer in place contingent on TE10 results. If they had an “either or offer” with one for success and another price if not, now is the time to see if they can push that offer up.
And if you look at yesterday’s comments about new plays and drilling targets in earlier wells, this was all part of the marketing campaign.
Let’s see where it takes us, but my gut feel at present is that we will still do a deal for the Eastern Morocco licence and with all the data, seismic and other prospects, we may still get a palatable price.
Yes we won’t get full value for the prospects, but we can expect to 5-10% of each prospect value based on earlier indications. TE5 proves that there is viable gas there, and every well finds more data and gas. Someone with big pockets will see that opportunity. The Shell/Repsol venture just over the border by example, would I’m sure be very happy to get their hands on both the asset and the data.
This venture is far from over.
Agreed SG.
Clearly not the update we wanted or expected today, however this section of the RNS is intriguing:
“has identified multiple, near-term drilling opportunities in the TAGI, proximal to the Tendrara Production Concession. These include exploration and appraisal targets at earlier wells SBK, TE-4 and TE-2 and at new prospects M5 and B1 which the Company estimates to have a collective exploration potential exceeding a mid-case of 3 Tcf of gross unrisked gas originally in place, supporting the continued prospectivity of the TAGI play. Additionally, continued interpretation has confirmed the presence of material Palaeozoic prospectivity in the northeast area of the Greater Tendrara licence”
Also if TE10 is dead, why would they drop a pressure gauge down there? It clearly has data value for the future is the logical answer. And taken with the above, despite the cost reduction plan, looks to me like that team have certainly not given up on the licence and still believe there is work to be done and value to to be secured.
And the mention of near term drilling beyond TE11 suggests that we can expect to see a revised drilling plan. The question is can this be funded from the cost reduction measures alone, or do they need to secure more funds? If Schlumberger step forward to fund this, that would be a huge positive flag for me - but will they?
More twists and turns ahead it seems, but they are clearly not throwing the towel in just yet.
Highly likely that the cause is simply the absence of definitive factual results. Some will make the connection you mention and assume this is the same at TE10.
I very much doubt it though - this is the most crucial well SOU have ever drilled and it needs to be done right - if the gas volume is anything like what we think it could be, the company future, and LE are totally dependant upon it.
Joe, there is a requirement for NED’s:
“Except for smaller companies, at least half the board, excluding the chairman, should comprise non- executive directors determined by the board to be independent. A smaller company should have at least two independent non-executive directors.”
But appears that this one may have done his job now.
He clearly doesn’t want out before TE10 outcome is made public - tells us a lot.
As for TE11 - it was always a contingency plan and bargaining chip, and I recall JP making it very clear that every extra well drilled brought risk. If TE10 is what we suspect it is, he’ll want to negotiate the LE at that point - provided he can get the sort of offer he seeks for us. What that is remains to be seen.
That chart indicates TE10 has liquids as well as gas and attributes indicative volumes. I presume they mean gas condensate, but I don’t recall that ever being mentioned in an RNS, and certainly not by volume.
The Dec discovery RNS mentions C1 to C5 hydrocarbons, but doesnt mention liquids. So where are the getting the info about liquids from?? Intriguing
Well the $4.5m tech contract wasn’t exactly minor was it.
Granted it’s not the airport contracts that we want to see, but it’s not chump change, and was being negotiated alongside the Iran airport contract, so not to be overlooked. Plus, it’s kept the lights on whilst the Iran issues have continued to bubble
Questions to consider:
1. Why would Schlumberger follow through the conversion to finalise their stake in the asset if they felt it had no/little strategic and monetary value?
2. Is that finalisation a factor in negotiations with a potential buyer of our share of the asset?
Can’t help thinking that this is related in some way to the recent lack of pace. Be interesting to see if things now speed up a bit.
And on the Balls Brothers video, i took it as guarded optimism. The flow rates will ultimately tell us which way we are headed and interestingly, whether TE10 now becomes the revised focus for the infrastructure if flows are better than the baseline economic requirement. JJ’s comments around this were interesting - the infrastructure and planning around it is clearly a bargaining chip for negotiations.
But ultimately, it’s a flow test that will determine our future here. And this is something that the absolutely cannot afford to foul up by rushing - far too much is resting upon it.