Member Info for ps200306

I'm so far underwater with this share I can see black smokers and tubeworms, yet *still* can't understand the negativity of the bellyachers on here. Aiming to get one last lot sub-20p this week. Expecting initial stimulation results shortly after that, with an excellent chance of them being positive. Holding till the end.

Manyana: "I was pointing out that Ireland is in hock up to its neck in debts that must be repaid and the UK loan could put Ireland in a very sticky situation if it cannot find the money to repay the loan by 2021 unless the UK treats us kindly which I would certainly now doubt given Ireland's attitude to Brexit."

You need to read up on how the national debt works. The outstanding UK loan of €3.6 bn is way less than the amount of debt we refinance *every year* as it falls due. That amount has typically been €8-10 bn for the last number of years. We faced precarious "debt cliffs" in the years 2017-2020, all of which have been averted. We've refinanced all of our IMF borrowings at cheaper rates. The national debt level is horrendous but with decent management and swapping short term for long term debt it has been smoothed out as well as can be over the next several decades. The one thing we *are* reliant on is the cheap rates available to us because of our EU membership. Irexiteers seem oblivious to the fact that we would sink like a stone were we to try to chart our own course anytime soon.

Global energy demand increased 2.3% in 2018, the highest increase this decade. Natural gas posted the largest rise of any fuel, accounting for 45% of the gain.

https://www.iea.org/newsroom/news/2019/march/global-energy-demand-rose-by-23-in-2018-its-fastest-pace-in-the-last-decade.html

That does sound more straightforward, Soundchew. Also bear in mind that not all Sound holders are UK-ish, with ISAs and generous exemptions. Personally, a dividend payout would be a literal disaster for me, taxable at 52%. Even if Sound was valued well above my average, I could end up making a substantial loss.

T10Boom ... that's the third time you've posted that excerpt from the RNS: "The potential for a positive impact of this fracture network on the net pay calculation was not included in the scope of the petrophysical analysis... ".

And you keep reiterating the NOT INCLUDED bit in caps. Net pay is not the same as GOIP. Net pay is just the total depth of the gas bearing intervals. Ones that have low permeability are excluded from net pay. If the fractures can connect some of them, the total net pay may increase. It doesn't mean there's any more gas down there. I think you're misreading the RNS. (However, IANE by any means).

Soundchew: "If pushed I would think between 3 and 5 pounds is easily achievable if we get the expected news from TE10. (3.5 -5.5bln pounds is not a lot to some of the giants.) "

Nobody pays over the odds for anything just because they are loaded. I go back to the fact that we are going to have 80p nailed on *if* we treat TE-10 as completely proven with no appraisal well. Then let's say we have a dozen undrilled prospects averaging 0.5 Tcf. The only way anyone's paying £5/share is if they value each of those undrilled Tcfs at 80p/share. And given a 50% recovery rate and 47% to Sound, that's £3.2 bn per Tcf in place. Sounds hugely unrealistic.

Soundingoff: "I wouldn't agree with your first sentence. JP is stating in simple terms the three types of value we have on the license. Without knowing the makeup of our inventory, it's very hard to ascertain our value. And I cannot see how he implies the undrilled prospects may not be worth much. That is your assumption IMO."

I'm inferring that from the audio between 25:28 and 29:00 where JP talks about the three types of value. Specifically at 28:08 he says: "and then there's the stuff that we haven't even drilled where there's two ways you could structure that. One is, you look at the seismic and you put a risking on it, and I think I've always said they're gonna risk very very heavily stuff that's undrilled, that's the nature of the industry, but they *might* be of *some* value. And then you could always start doing contingent structures where you say, look, you guys drill that and if it works we get x, right? And that's another way to structure around the risk".

Maybe I'm misinterpreting but when he says the undrilled prospects *might* be of *some* value (emphasis his), he equally implies they might be of little or no value. Brian has also implied this at a previous talk. I give the management a great deal of benefit of the doubt, so hopefully the idea is if you think your customer is undervaluing the undrilled prospects you go for one of those contingent arrangements, though it makes the LE much messier. Nevertheless, given that the large majority of the gas in place is going to be in undrilled prospects identified by seismic, it seems a bit blasé to provide no clue as to how it might be valued.

ericnat17: "I think the point to take away from that is that they have a discovery and they did say that the trap was part of that discovery. The strat trap play type is very interesting as usually the trapped volumes are significant. This play type is evident in Algeria and has proven successful. When TE10 flows it will prove up other similar trap structures on the licence ( a few at least). They will be in addition to 12 other prospects they had identified, they were all closures, according to Brian."

If you listen to Balls Bros, JP reiterates that the valuation of the company will mainly depend on proved-up resources. To paraphrase him, there is: 1) a certain value attached to proven resources, and 2) a certain value attached to discovered resources for which no appraisal wells have been drilled. And then there is 3) a value for undrilled prospects.

In the Balls Bros audio he implies that all those undrilled prospects you are talking about may not be worth very much. Those in the second category -- among which we may presumably include TE-10 / NE Lakbir -- will be worth more, but still depend on the risk appetite of a potential purchaser. So the difference between an estimate of 2.7 Tcf and 1.4 Tcf for TE-10 could make a very material difference, hence my interest in why it changed and what information the change was based on.

I'm not nitpicking -- I'm heavily invested here so have a genuine interest. But there seems a disconnect between the multi-£ valuations being bandied about here and the JP's statement about drilled resources which, even in the best TE-10 case, amounts to about 80p worth for everything drilled so far. And even that might depend on diverting the TE-11 money to drill an appraisal well.

Now maybe the answer to all this is the approach (mentioned in the audio) of selling on the basis of an additional bonus contingent on successful future drills. But that's not the clean LE I suspect many here are thinking of.

Thanks Lelo & Smallsmile.

Did anyone in the pub ask why, given they are so confident about gas below the structural closure, the mid-case for the stratigraphic trap dropped from 2.7 Tcf to 1.4 Tcf ? What did they find that justified halving the estimate? And why was JJ still talking about £1.10 for TE-10 instead of 55p?

Ditto. The input of all reasonable commenters has been helpful and welcome. The pathological liars like MickeyTT and assorted blusterers are just background noise, easily filtered.

L_Y, that was me that mentioned that Providence only own 40% of the Barryroe oil, also me that mentioned the lottery ticket nature of Barryroe shares. I say that because nailed-on success seems to have slipped through PVR's fingers numerous times in the past. We only find out the reasons in hindsight. Who knows what slip-ups await this time round.

As for the demand for oil, I have relatively little worry about that in the medium term. The European Union may have decreased the energy intensity of its economy, but global demand has increased inexorably and relentlessly. check the figures -- it's been on the order of 1.5% to 1.8% increase every year for the last twenty years, with the sole exception of the year of the global financial crunch. Not too long ago in the early 2000s (even as Peak Oil hysteria was at its height) the global demand was 85m bbl/day. Now it's 100m. Even with EVs making strides, the increase in demand for conventional fuels far, far outstrips any dent that they make. Were EVs to increase to even a few percent of the market there would be other infrastructural hurdles to face. Don't get me wrong -- I think fossil fuel use needs to be curbed, and they will eventually deplete anyway, but it is on a timescale of decades at the very least. The short term blot on the horizon could be a severe economic downturn affecting demand, but that is just part of the normal business cycle.

I've long since thought of Providence shares as lottery tickets ;-)

Still think it's a long shot, given past history.

L_Y: "a rational price to sell PVR for would be at £10 per barrel of oil in the ground - hence £3.5 Billion for the whole company. So who might come in an".

Providence only own 40% of those barrels. Still, I wouldn't turn my nose up at £1.4 Billion or £2.30 per share. I'd bite yer hand off for half that.

Manyana, excellent information on the share options scheme, thanks. If, as seems likely, the boys will want to extend their options with sharedholder approval, would that normally be done at an AGM or is there a different mechanism? And given that APEC/COSL probably won't have started drilling Barryroe by the next Providence AGM in June, how do you think shareholders might react (especially if the boys look for even more options and/or a lower strike price)?

Is there anything to stop PVR from just giving the same share options to the directors after the current ones lapse in August? It was done by fiat last time, so no reason it can't just happen again? While it sticks in the craw a bit that the CEO and Technical Director between them own less actual shares than I do, I'd still like to see them incentivised with options to bring the bacon home at some date in the not too distant.

JoeCreed, I appreciate your posts. As for some other wasters, I'm quite enjoying the way my new webscraper treats them ... reminds me of Harry Mudd's wife in the Trek espisode "I Mudd" for any other oldies who remember it.

https://i.imgur.com/EGKgMOO.png

You think the discourse can't get any worse, then it plumbs new depths. I'm getting quite a kick from my webscraper "auto-translating" all SG47's posts... https://i.imgur.com/IyU3Z34.png
JezTheFez has just gone on the trash heap too.

Even though there's a lot of dross among the good posts on here, I still read all of them. Only one poster is thoroughly unpleasant enough to be worth filtering out of my webscrape forever. Henceforth I will only see Shaungreen47's snarky nonsense as * BLAH BLAH BLAH *. Wot a relief!

SG47: "Just had a look at PS2006306's history to look at all the "useful information" that he has posted. Oh dear. I was very disappointed. But not at all surprised."

Ooh, you mean all dozen posts on SOU ever? That's called knowing when you've nothing much useful to say. Compare it to your own 80 mostly backbiting posts so far this year, and a hundred or so a month on average. Just sayin'. And you're not even the worst, though you're up there. Last time I mentioned this, the worst offender of all stopped posting permanently. Just thought I'd try my luck again. Ok, that's my last, over and out.