Had to laugh, thinking of our dearly departed resident troll TheShen / GuntherGobdaw. According to him and the "savvy investors" at the Miami Bitcoin conference just a month ago, renewable energy would be springboarded by crypto mining operations. I warned him that when the dam broke on overvalued tech stocks, that crypto would get slaughtered too.
Well ... Bitcoin is down 35% since the conference (just five weeks ago, remember), and 58% since its high in November. Dogecoin is down 44% since the conference and 88% since Elon Musk hyped it on Saturday Night Live a year ago. The share price of Coinbase, the online crypto platform, is down 68% since the conference, and 85% from its high last November.
Cathie Wood, CEO of Ark Invest, spoke at the Bitcoin conference and predicted that BTC was going to $1m by 2030. LOL. She just bought half a million Coinbase shares on the dip. We'll see how that works out. By the way, her ARK fund which invests in tech stocks is down 78% from its high. I believe this is what she refers to this as "taking advantage of volatility during corrections".
One thing Gunther picked right -- the right time to take a hike! ;-)
Utility, I wouldn't waste too much breath on that pair. Both clearly have a "let them eat cake" attitude to Moroccans. By the way, you are correct about STD123's predictions despite his protestations. But then, his most recent post has so many failures of logic in a single post that one shouldn't really expect much in the way of either truth or reason.
Sleepy and the turf wars:
https://drive.google.com/file/d/16Mj88UV8EKTPKMAyEvAfco8pun-_F6Xp/view?usp=sharing
In spite of selling most of my holding a year ago, I still probably have more invested than many here. So no, I don't want SOU to fail. I'm just bemused by seeing so many unhatched chickens being counted. Most of the news we've had so far has been signposted for the past two years. Revenue from LNG will allows SOU to pay its bills and nothing more. It is worth zero on the share price. Phase 2 is required for the SP Angel prediction to materialise. And we need to see what combination of debt and equity finance is secured. The amount required is a significant multiple of current market cap, so the conditions could be onerous. I'm never getting my money back even without further major dilution, so I admit I have a somewhat detached interest in all this. But I'm not trying to rain on anyone's parade either. There could be a ton of upside in SOU still (though there's the problem of not having any money for drilling). A lot of things have to come together for that. I don't have much time for the constant unbacked assertions that the share price is going to fly because "reasons".
Biz Post: "Energy use increased 4.3 per cent last year and emissions related to that increased energy use increased disproportionately, by 6.3 per cent, according to figures from the Sustainable Energy Authority of Ireland (SEAI). The disproportionate emissions increase is due to use of fossil fuels. A rebound in demand for oil-products was reported particularly for transport as travel restrictions eased. The figures underline the challenges arising from Ireland’s high dependency on imported fossil fuels, the SEAI said. Low-wind periods in 2021 and less rain for hydro-generation meant that less of our electricity came from renewable sources."
From the Business Post ESG briefing: McDonald warns of ‘damaging cliff edges’ in energy transition
There is little to be gained from “unmanageable” and “damaging cliff edges” in the energy transition, Mary Lou McDonald has said in a rare speech by the Sinn Féin leader on the party’s policy on the issue.
Speaking at the Business Post National Energy Summit last week, McDonald’s keynote address outlined the party’s position on upgrading Ireland’s power grid, ensuring domestic energy security; supporting industry and workers through a just transition; scaling up Ireland’s offshore wind and hydrogen sectors, and prioritising renewable energy projects in the planning system due to their strategic importance.
McDonald played up the potential of Ireland’s offshore renewable energy resources and said Sinn Féin would support the industry to make Ireland a major international exporter of clean energy.
“If we get this right, we can transform not just energy supply and security, but we can transform Ireland’s economic model,” McDonald said.
She said that in the immediate term, gas would continue to play a role in the energy system, but that the goal was a “fossil-free future”. She described the government’s 2030 climate targets as “ambitious” but added that they were also achievable. She said the country could “not afford to miss this target or lose any more time”.
She expressed concern, however, about elements of the urgent action and hard decisions others believe to be required on the issue.
“There is very little to be gained in creating unmanageable, damaging cliff-edges for our people or for industry as we navigate our way to a successful and just transition for everyone,” she said.
The government recently defeated a Sinn Féin motion that sought to scrap plans to restrict the sale of turf. The party has also campaigned against the planned carbon tax increase in May.
“As we advance change, the wheels of industry must continue to turn, and workers and families must be able to light and heat their homes . . . the focus must be on creating alternatives that allow for real change,” McDonald said.
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Does that mean Sinn Féin would be in favour of Barryroe to avoid a ‘damaging cliff edge’? Not on yer nelly. All politicians talk out of both sides of their mouth but the populist Shinners make it a fine art. So they will roast the Greens over the turf issue because that's good for the rural vote, but they will still toe the line on climate because it's a popular issue. In any case, the next election is still nearly three years away. Sleepy is in control until then and he is LOVING the energy crunch. Irish energy WILL fall off a cliff, but he'll be ready to trot out plenty of ass-covering excuses for his gross mismanagement.
Another 5% of the company chipped away. At least most of it is tied to share price performance. SP Angel's target price is holding steady at 8.2p. They project first Phase 2 gas at the start of 2025. I guess that's based on FID this year and 24 month pipeline construction. A six month slippage in FID and higher end of construction estimate at 30 months would push it to 2026. Still, hope springs eternal.
The weak low pressure system that moved over us at the weekend produced the only wind output greater than 1 GW for the past 7 days, and that only lasted for 19 hours. At 6am this morning with the country shrouded in fog it was at 9 MW ... a mere 0.2% of installed capacity.
Graham was also working hard to get Phase 1 FID by end of 2020 and in the end he was off by more than a year. And the 2020 projection was when Afriquia were already in the picture and negotiations were "at an advanced stage". The idea of a 2022 FID for a project that is ten times larger sounds extremely fanciful to me. There has not yet even been news of a lead investor, nor do we have any idea what the terms would be. At the start of last year I opined that first Phase 2 gas was unlikely to be before 2025. I would now guess it is very unlikely before 2026, possibly 2027. SOU has a lot of hurdles to jump between now and then.
goza172: "PS, you are the most negative person on this board by a mile!"
Perhaps because I seem to be the only person that sticks to quotes from SOU's own statements and projections. This board is replete with people plucking numbers from their back passages. All the drive-by comments in the last two years about a 10p, 20p, 30p SP disappear under the radar time after time, with nobody thinking to call the rampers to task. Nope, the annoyed comments are reserved for the guy who keeps pointing to the company's own statements. Just today you have someone who has been shamelessly ramping for two years (even though they are down on their investment) claiming that things will turn around on first Phase 1 gas. No, all of Phase 1 gas has already been priced in, and according to SOU's own projections is worth zero when netted against debt. How do people get away with these ramptastic comments? And, no disrespect intended, I see you were criticising people for negativity just in the last 10 days over on Empyrean when it turned out they were right and the SP has been slaughtered. Anyway, I am just one punter with no special insights, feel free to ignore.
The Goobdaw seems to have departed once again, taking all his posts and any threads he started with him. Maybe he'll stay away this time, though I won't hold my breath.
moroccoworldnews.com is hardly an unbiased source. There's an IMF report knocking about somewhere on Moroccan external investment and business-friendliness. It's doesn't paint a bad picture, except for certain inefficiencies and out-of-date practices. It's a while since I read it, but iirc one of the main complaints of businesses is lack of clarity about tax regulations.
Good fiscal and safe regime? It has major diplomatic spats with its neighbours and a government ministry is trying to screw SOU with a spurious tax claim. The risk of being "significantly adversely impacted by political, fiscal and regime changes" is number one on SOU's risk register.
keeptofacts: "what is it ... highlighting the usual 'going concern statement'?"
For someone who's had me filtered for years, you're always amazingly clairvoyant about my posts. Let me guess, your day job is dressing up as a blind guy with a white stick and rattling a tin cup at passersby? ;-)
STD123: "PS, there are no funding issues that will threaten Sound as a going concern. This is total scaremongering and to suggest that Graham and the board would .... blah blah etc."
I won't even ask if you bothered to read the report. You never bothered to read any of the SP valuations either. So allow me to quote your hero himself from the report:
"the Company’s cash flow
forecasts for the next twelve-month period to March 2023,
indicate that additional funding will be required to enable the
Company to meet its obligations. These conditions, along
with other matters described in note 1, indicates existence of
a material uncertainty on the Company’s ability to continue
as going concern."
db71: "What PS fails to grasp apart from reading the report for his/her own agenda is that sound own 2.3 billion dollars of gas!"
What I've grasped is that this is a very different thing from owning 2.3 billion dollars. Hence the monetisation push for the past five years which still has a major funding gap. How else do you explain that Graham was trying to give away a third of the assets for a few million in short term funding via ANGS? A third of the assets, by your reckoning, is worth more than 40 times ANGS market cap.
Anyway, perish the thought that I might be forgiven the heresy of merely quoting the company's own annual report. I'd understand how I'd become Salman Rushdie to the ayatollahs of this board if I'd WRITTEN it. But nope, apparently even READING it is a stoning offence.
Yesterday, the New York Times ran this hogwash: "As Europe aims to reduce its dependence on fossil fuels, some companies in the renewable energy sector are facing a frustrating reality that threatens to undercut Europe’s plans and poses a wider challenge in the global fight against climate change: a lack of money to finish the job. After getting initial start-up money or grants, businesses are struggling to raise funds for larger projects needed to complete the transition from carbon-spewing sources of energy. The funding gap means that Europeans face further energy shortages and rising costs or the prospect of falling short of the bloc’s ambitious climate targets."
It continues in the same vein. Somehow (in the NYT's tiny mind) novel storage technologies that haven't even made it out of the laboratory would bring on the energy transition in a useful timeframe if only free money was thrown at them.
Roger Pielke has a different idea: "... carbon-free energy technologies of production and consumption are increasing their role in the global economy, but when they are not deploying fast enough — leading to geopolitical or economic consequences — then fossil fuels will quickly fill that gap. It’s like an iron law."
The whole article is worth a read:
https://rogerpielkejr.substack.com/p/welcome-to-post-apocalyptic-climate
There's going to need to be a funding RNS before an exploration RNS. SOU do not have the money to fund its Anoual well commitment. There are other funding obligations not specified in the report but they are big enough to create a "material uncertainty which may cast *significant* doubt about the Company’s ability to continue as a going concern" (emphasis mine). If that didn't scare the bejeebies out of anyone, I think it's a case of rose-tinted specs. (Or maybe people didn't read as far as page 70).
Even without mentioning it, I think the report finally confirms what the ANGS bid was all about. One of the funding options mentioned is "a cash generative acquisition". The ANGS bid would have allowed SOU to swap shares for near term cash generation. It was a rotten deal and everyone knew it -- ANGS prospects looked ropy as hell, and the dilution of SOU's assets compared to the potential ANGS payoff was horrific. It suggests to me that SOU has a funding crisis going on. It was nothing to do with building a "world class team" ... SOU is already top heavy with management, who outnumber the techies by 2 to 1.
Also, if you take the 7 million that SOU had in cash, subtract the 1.3 mill that's tied up as collateral, subtract the G&A burn rate to the end of 2023 ... it looks to me like there isn't a whole lot left, and there's no revenue coming in. Falling a year behind schedule on the original plan for Phase 1 FID has served SOU extremely badly. I've no idea what the unfunded commitments are ... but the report says they are "significant". We know there's a million in bond interest (2% for two years) and that's before another a million falls due at end of 2023 for the first amortisation payment. Then there's the Anoual well. Possible Sidi seismic? Who knows.
I've no doubt the company has options, as the report claims. My question has always been: what will they cost? The fact that ANGS might have been the least worst option doesn't inspire confidence. Market cap is in very bad shape for an equity raise.
Oh and let's not forget the six hundred pound gorilla in the business suit -- the Moroccan taxman. That's been dragging on for more than a year and a half and the taxman is clearly not budging, having asserted his claim *twice*. I was also a bit intrigued to see that the SOU group consists of *eleven* companies, only one of which is registered in Morocco (and *three* in the British Virgin Islands). There seems to be some complicated arrangement of intercompany loans -- maybe the taxman is right to be suspicious? Is SOU trying to limit subsidiary liabilities while holding a lien over assets? Maybe the taxman would like his own lien. I don't know much about this stuff, but it sounds labyrinthine. All I would say is that maybe the tax isn't the foregone conclusion I'd thought. Graham has done a good job but in my book the future is still pretty murky.
It's all relative StMary ;-)
If Phase 2 was finished and all the value predicted by SP Angel accrued, I would still have been down 50% as will many here (or worse). Maybe SBK-1 and TE-4 will eventually improve on that. It's a far better plan than poking holes randomly around the desert, and some more sensible heads on here (not me) were recommending it years ago. Still gonna be a long haul and some are still setting their expectations by the Parsons years, which I fear will never be realised.
Very positive stuff. Solar seems like a bit of a diversion, but the story about SBK-1 and TE-4 makes a lot more sense than wildcatting. Could finally put a line under the Parsons era and high risk "step out" drills. I expect Phase 2 financing has a bit of a ways to go and hurdles to overcome ... wouldn't expect it all to be done and dusted and FID taken this year. But still positive.