Member Info for ps200306

... and arguably if the precedent is set that this is a taxable transaction it makes it much more likely that the bigger charge will be upheld too.

Correct, it's no Moroccan carpet. The larger part of the SEME charge was dropped as it was agreed it would represent double taxation. This is just the residual part covering an alleged disposal of assets to Schlumberger. The remaining (much larger) SEMS tax bill is still in the offing.

More press mentions:

Ian Guider in the Business Post: "Barryroe might be Providence’s last chance to strike it lucky. The oil prospector has been in business in one guise or another for 40 years. Will Barryroe finally repay investor loyalty or has government appetite for fossil fuel prospecting passed?"

Manyana: "I love the way you read my posts so assiduously and then comment."

No you don't. If you did, you'd be defending them against my claims of idiocy. But you can't.

It's a discussion board -- if you don't want your posts to be read, don't post. Like I said a long time ago, I won't engage with your childish jibes, but it needs pointing out when you make outrageously misleading claims about PVR as you are wont to do. Over and out.

Manyana: "The license to drill was going to apply to a drill in 2023 so we still have time before then to get the approval."

It's not a license to drill. It's a petroleum lease undertaking. As per Linn, it would still take about a year to put together the Environmental Impact Assessment for a drill, and a separate permission to actually commence drilling would still be required. If PVR doesn't get their lease undertaking NOW, there will be no drilling next year.

Manyana: "Providence could wait until then and then seek funding from the EU for the drill and development."

SERIOUSLY, what colour is the sky on your planet? The EU doesn't hand out money for drilling oil wells. The very idea is laughable. The taxonomy for sustainable activities doesn't change this one iota. From the horses mouth (ec.europa.eu):

"The Taxonomy is not an instrument of EU energy policy. It is a tool to increase transparency in financial markets for private sector sustainable investments. It does not mandate investments and does not prevent any economic sector from receiving investments. Member States remain fully responsible and competent for deciding their own energy mix and for striking the appropriate balance – in terms of energy security, energy price stability and their commitment to decarbonisation and climate neutrality. The Taxonomy is an important element in the sustainable finance toolkit to help fund the Green Deal."

Sometimes I firkin' despair at the delusional outlooks on this board.

"Licence next week ..."

We have absolutely no reason to think there is a decision imminent except for an off-the-cuff remark from the chairman back in April, backed up by precisely ZERO justification. He has no influence over the powers-that-be, and may just have been told that there is 90 days worth of bureaucracy to go before a decision can be made. It's still up to Ryan to sign it off, and we can be pretty sure Ryan would prefer to shave his gonads with a rusty sickle than permit the extraction of oil in Irish waters.

Also, intuition, experience and common sense should tell you that something that was predicted for "within 90 days" which hasn't come to pass after 85 days is probably delayed or deferred or wasn't a good prediction to begin with. The idea that Menton could predict things outside his control with to-the-minute accuracy is highly improbable. I'd say there's a 50-50 chance that PVR will have to resort to law to try to budge Ryan. That said, I am not as confident about this assertion as I am about the fact that the EU doesn't dish out free money for drilling! You have to laugh, otherwise you'd cry ;-)

0.6p would be a 40% dividend at current SP! Anyone would bite your hand off for a 6% yield, implying a SP of 10p.

I don't think the share price is down because of anyone playing the market. It's due to lack of liquidity. Apart from brief spurts of buying on positive news, the volumes being traded have been lacklustre for a very long time. A positive spin would say that nobody wants to relinquish their golden tickets. A negative spin would say nobody's interested. Regardless, the time when value can't be ignored will be when SOU is paying a dividend from cash flows. That will be some time between 2025 and 2027.

Be careful what you wish for. There is a small but non-zero chance that FF or FG will have the backbone to stand up to Ryan on his catastrophic energy policies. The populist leftwing SF are unlikely to rock the boat and would pander to popular green sentiment even without the Greens in power. Barryroe's best chance (and it's a slim one) are with the current set of muppets.

"We've all heard the stories of children digging pits in the DRC in Africa searching for cobalt, However even in more structured countries our renewable needs are destroying whole areas.
https://news.sky.com/video/battle-for-chiles-critical-minerals-12643766 "

Onshore wind turbines use 4 to 6 times as much copper per installed megawatt as fossil fuel plants. Offshore wind needs 7 to 10 times as much. Solar PV uses 11 to 40 times as much! Only about a quarter of copper for wind power is in the turbine itself. 50-60% is for cabling. The rest is needed for transformers, components etc. Then consider that Ryan wants to build 30 GW of wind -- five times current capacity -- as a buffer and exportable commodity. Copper usage will easily go up by a factor of 20. Then there's all the concrete, steel, eye-watering amounts of rare earth elements, etc. for wind turbines. The world's largest turbines are now approach 1000 ft in height. And that's before we get to the planned increased use of electric power for heating and transport, lithium for batteries etc.

https://en.wikipedia.org/wiki/Copper_in_renewable_energy

https://www.americanexperiment.org/so-you-want-wind-turbines-but-dont-want-copper-mines/

https://www.woodmac.com/press-releases/global-wind-turbine-fleet-to-consume-over-5.5mt-of-copper-by-2028/

https://www.copper.org/environment/sustainable-energy/renewables/

I went reading about the state of hydrogen infrastructure when I first heard Ryan bloviating about it. It is years, if not decades away from being ready for prime time. Hydrogen can be added to natural gas in small quantities in existing generating plant. Beyond that its flame front propagates too rapidly and causes the equivalent of a backfire. Fully hydrogen burning plant is possible but the City of Los Angeles (for example) is planning one for 2045.

Then there are hydrogen fuel cells which so far are not used for large scale stationary power applications. They would have to scale up by a factor of a thousand by 2030 to make a dent, and another factor of 6-7 by 2050.

https://www.reutersevents.com/renewables/renewables/order-magnitude-changes-needed-large-scale-hydrogen

On top of that, add the cost of the new infrastructure for generating, storing, and transporting hydrogen. That's in addition to all the added cost for wind turbines and the added grid capacity to connect them. You are adding multiple layers of overhead to generate the same power.

Ryan is happy to criticise immature technologies that he doesn't like (modular nukes, CCS etc.) but he is literally betting the farm on a different set of non-existent technologies (grid-scale batteries, hydrogen). I genuinely believe he is a dangerous nutcase who has no business directing energy policy in a first world country.

Encouraging that they are not anticipating further dilution for either Phase 2 or drilling. There'll still be a raise next year for G&A and there's a stack of warrants outstanding, plus some debt due before first LNG revenue, but maybe not too bad.

Domdrew, if I had any idea what I was talking about I wouldn't have invested here. Happy to be educated if you have anything to share?

Same here. You'd like to think the big boys who are accumulating know what they are doing, but there are still several mountains to climb -- get around the kamikaze government, raise $65m for an appraisal well, and then bazillions more for field development. Whoever puts up that money won't be doing it for the good of their health either, so even in the best possible world there's no guarantee of what would be left for the average punter after dilution.

Personally I have my doubts that either the energy security review or a decision on the Barryroe lease will emerge before the autumn. And when they do, I will not be holding my breath for a positive outcome on Barryroe. We already have the National Energy Security Framework response to the Ukraine situation, published in April:

https://www.gov.ie/en/press-release/be971-national-energy-security-framework-sets-out-the-governments-response-to-the-impacts-of-the-war-in-ukraine-on-the-energy-system-in-ireland/

It is a litany of Green aspirations to make people walk or take the non-existent bus instead of drive, retrofit homes with heat pumps, increase renewables, and so on. There is literally no sense of urgency about the actual energy emergency that Europe is facing. It talks about a daily review of gas imports and a release of our imaginary strategic oil reserves (which are a combination of stocks held in other countries, and options to buy from countries that will have nothing to sell when we need it).

We need to recognise one fundamental fact: Eamon Ryan is rejoicing and singing hallelujahs over the fact that we are being thrust into energy poverty. It is beyond the wildest Green dreams to have fossil energy forcibly curtailed and they will take every advantage of it. They can point at Russia and say that fossils are even more unreliable than wind turbines, because supply cannot be guaranteed. They will NEVER, EVER admit that this could be helped by unlocking indigenous sources of fossil fuels. Unless Ryan is grabbed by the scruff of the neck for a timely "come to Jesus" moment, he will not relent. And there is no sign of any political will to do that because of the potential loss of a Green coalition partner or because they AGREE with the Green agenda.

Manyana: "It clearly states that the only license Providence has is SEL.1/1 which is still clearly owned and active contrary to your statement ."

Can you read? It says in black and white that the license expired in July 2021. An expired license is not an active license. Providence's own annual report says that the exploration license expired in July 2021. Take your weird ideas up with them.

Manyana: "If Providence was not the "owner" of SEL.1/11 after June 2021 why did they allow them to do a site survey"

The site survey authorisation was granted in February 2021 while the exploration license was still extant, and continued to be valid thereafter.

Manyana: "When did Providence apply for a petroleum license? It's current request is under the standard exploration license until they have drilled the exploratory well at "K". If that is successful they will then apply for a petroleum license. Until then they are subject to standard exploration license SEL. 1/11."

Providence's exploration license expired on July 13th, 2021. They submitted an application for a Petroleum Lease Undertaking in April 2021, which is under consideration. That is the only "request" they have outstanding. If they are to drill an appraisal (not exploratory) well at site K, it will be under the terms of the Petroleum Lease Undertaking. They cannot even *apply* to drill anything until the lease undertaking is granted.

If you're not clear on this, what do you imagine they are waiting for? Especially since, according to you, they were set to discover lots of oil during a seabed sonar survey (even though that's impossible), and a single well at site K can unlock vast quantities of oil (even though PVR themselves say they need 10 wells -- 5 production and 5 injection -- just for the first phase of an initial field development).

Manyana: "I mentioned the 1992 document which was further clarification to the original law which was set years prior to that."

The 1992 document is not a statutory instrument. It does not have the status of law at all, let alone being "the official and current law". You suggested Varadkar might "like to point out where his contention [about needing financial backing] is covered in the Licensing Terms for Offshore Oil and Gas Exploration and Development 1992, which is the official and current law". I showed you that it's there in section 3. It's not "the law", but it doesn't matter because the 1960 legislation already grants the minister the right to do everything that's in the 1992 document. If it didn't, the 1992 document would be illegal.

Manyana: "But one element in that original document, which was a law, stated 'such lease shall be made subject to the payment to the Minister of such moneys ....' ... In other words, if the minister was being paid a fee for the license, it was a legal entity that the minister was not the custodian of the lease unless the lessee did something illegal."

You will find in Chapter 3 section 6 of the legislation that there is a clear distinction between:
a) the licensee under an exploration licence, a petroleum prospecting licence or a reserved area licence which is for the time being in force and includes that area,
and
b) the lessee under a petroleum lease which has not expired and which includes that area.

Each term is then separately defined -- petroleum prospecting licenses (section 9), petroleum lease undertakings (section 10), and petroleum leases (section 13). You are quoting section 13.

PVR DOES NOT HAVE a petroleum lease, has never had a petroleum lease, and has never paid money for a petroleum lease. It paid for an exploration license, which expired in July 2021 and at the end of which "the Licensee is required to either forfeit the licence or apply to the Minister for a successor authorisation, which could be either a Lease Undertaking or a Petroleum Lease".

Manyana: "So, has Providence been paying a fee for the Barryroe license, is it still paying a fee for the license? If so, Ryan will end up with a big bill for all the payments Providence has paid over the years if he tries to crush the lease".

THEY DO NOT *HAVE* A LEASE. What's more, the terms of the extension of the Barryroe exploration license to July 2021 (previously 2019) included a commitment to assess the potential of the underlying Jurassic which, as far as I'm aware, they never did due to the APEC failure. So PVR could be accused of not even carrying out their commitments under the exploration license, let alone not qualifying for a lease undertaking by way of lack of financial resources which the minister is entirely within his rights to consider.

PVR can certainly make the case that they should have the right to progress their involvement in Barryroe through its normal course, but it is by no means a slam dunk.

Manyana: "And Veradkar is talking through his hat when he says " “My understanding is that to get the renewal, part of the process is that you have the financial backing to actually do it,” Perhaps he would like to point out where his contention is covered in the "Licensing Terms for Offshore Oil and Gas Exploration and Development 1992" which is the official and current law."

The Licensing Terms are not a statutory instrument so they are not any law at all, let alone "the official and current law". As to Varadkar's point, apart from nitpicking about the difference between "financial backing" and "financial resources available", he is quite correct:

1.5 The receipt of an application will not create any obligation on the part of the Minister to grant any authorisation.

3. In considering an application the Minister will take the following into account having regard to the authorisation applied for:
(a) the work programme proposed by the applicant;
(b) the technical competence and offshore experience of the applicant;
(c) the financial resources available to the applicant; and
(d) where relevant, previous performance by the applicant under any authorisations to which the applicant has been a party

Manyana: "to think that since 2012, with all the latest technology in seismic that they do not know a lot more now than they did back then when they declared it commercial would be unthinkable."

There has been no new seismic on Barryroe since 2011. In any event it is no guarantee of success -- they had the same sort of 3D seismic for Druid/Drombeg, which was a complete dud. That's why appraisal drilling is needed in combination with seismic. The 2012 48/24-10z well established the presence of an oil-bearing interval, and the seismic allows the areal extent of that vertical interval to be modeled.

Manyana: "What I believe is that the number of wells has been the issue. Barryroe was original defined as a "shallow" field (25m) covering a large amount of ground that would have needed 24 wells due to the possibility of non-contingency so the current assessment, in my opinion, is that they have assessed that the K area of the Barryroe field is the "sweet" spot which will mean it will supply huge amounts from a single well, hence the appraisal."

This is an impossibility. The assessed volumes are based on the vertical and areal extents of the oil bearing interval, and the porosity and oil saturation of the rocks. The productivity potential of any given well then also depends on the permeability of the rocks and viscosity of the oil. Even if you could get the whole billion barrels out of one well (which you can't) but it was at 10,000 bbl/day, it would be no use. Providence themselves estimated that a single 1000 foot horizontal well could do 11,000 bopd under natural lift. Any real development plan would have to be doing ten times that at peak. The only question is what is the smallest commercially viable early field development scheme

SP Angel does make that point: "we think that a yield-based valuation may be more appropriate once the project is onstream and its future stable cash flows have been derisked."

What does one say about today? Great news for the company, cannot deny that Graham is solidly delivering on promise!

54 million traded, 6% drop? WTF? How do you begin to make sense of that? If you bought in on the mid-April operational update on Phase 2 financing, you are down 50%?!

Still, at this price has to be a potential multibagger for any brave soul willing and able to take the plunge. Not going to know until the dust settles from Phase 2 financing and the final dilution picture emerges. I still find it hard to believe that's going to be this year -- Attijariwafa is only a part (an important one!) of what sounds like a labyrinthine arrangement. A lot of other pieces will all have to line up and be triggered together.