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STD123, as long as you're paying I'm sure Malcy will tell you whatever you want to hear!

STD123: "The 50p per trillion estimate is not SOU specific and has been applied to many companies sitting on such reserves."

So the value *PER SHARE* is independent of the number of shares? Then SOU should just issue another 1.6 billion shares and double the value of its gas. Why don't you suggest that to Graham -- he will surely recognise your financial genius.

"The 50p per trillion estimate is from Malky. Before you start rolling on the floor Malky has used this estimate for years"

The number of shares has tripled in those years. Basic arithmetic should tell you that if he was right then, he can't be right now.

All stocks are up on positive murmurings about Ukraine. Oil is down. Low volume on PVR -- 10% rise is nothing significant.

STD123: "The rule of thumb is that for every trillion cubic foot of gas roughly adds 50p to the share price so we would not need the full trillion to achieve 30p."

Whose rule of thumb is that, then? Was it the one from back in the day when we had about a third of the shares on issue compared to now? Also, that one didn't seem to factor in the cost of getting the gas out of the ground or transporting it, or the cost of the associated finance. And note, it's *recoverable* gas, so I reckon you'd need 2 Tcf GOIP for the shares to be worth 30p. Maybe a bit less because Anoual isn't as far from the Maghreb–Europe pipeline as Tendrara.

"As I have previously stated it is a pointless exercise trying to work out a current valuation"

So you can say what a future Tcf is worth, but you can't say what the current ones are worth? Sounds very odd. Especially when there's already a valuation from the official broker.

Hi quelfromage1,

It's true there's no ideal energy solution. All forms generate waste. Sellafield isn't representative of the nuclear waste issue though -- it was a reprocessing plant. It reprocessed nearly 10 kilotons of spent fuel, at a lucrative £1m per ton, but it had some pretty ropy design and organisational issues. There are some pretty novel high burn-up fuel cycles today, and thorium which produces no transuranics. However, realistically, the bureaucracy involved in deploying entirely new fuel cycles is prohibitive. The only chance for fission is standardised modular designs based on existing technology that don't need custom certification processes for each installation. These can be walkaway safe and the waste storage problem is very manageable.

I'll get laughed at for saying it, but I actually think fusion is not as far away as is supposed. There are four different fusion concepts that I know of which are all due to hit significant milestones by 2026, and one of them plans to be producing net electricity by then. These are all privately funded enterprises with serious money behind them. There are half a dozen others besides these four, but they're the ones I'm keeping an eye on. Fusion research has been quietly revolutionised in the last decade by the introduction of high temperature superconducting REBCO tapes, and hardware/software capable of simulating turbulent plasmas.

But as I said, we shouldn't depend on technologies that still need years to mature. Leave the hopium to the Greens with their batteries and green hydrogen. And hopefully persuade them that we still need hydrocarbons between now and then.

We are doing "better" than the UK with wind power equalling about 9% of primary energy. Though that was in 2020, an above average wind year. Even at that we missed our targets for renewable energy for 2020, like the UK and Germany. We achieved 13.5% overall (target was 16%), with most of the remaining renewable energy coming from biomass.

In today's Business Post there's an article saying we're almost certain to miss our targets for 2030. I've no doubt the response from government will be to say we need to double down on our efforts with wind. At what point do we acknowledge that wind power just isn't capable of getting us to where we want to be? In the meantime we'll have spent enormous money, caused environmental damage, increased prices, and quite possibly wrecked the grid and the economy with it.

"The Annoual licence will be getting drilled soon anyway, if successful and with the LNG plant opperational I see a price around 30p plus not unreasonable."

I can't even *think* of a suitable response. Given the number of upvotes that comment got, I'm afraid that delusions about this share are still widespread. As someone pointed out, the market is forward looking. LNG is already priced in. Given the SP Angel valuation for Phase 2, a single Anoual drill would have to find more than a Tcf of recoverable gas (three times the size of the TE-5 horste) to give that sort of valuation. To say it's unlikely would be a massive understatement.

Wind provided 53% of Irish electricity in February, and hit a new record for peak generation at 4,584 MW early in the month. Lobby group Wind Energy Ireland was quick to fire off press releases. They didn't mention that we got three named storms in the month, causing loss of life and electricity outages. They also seem to think that an average wholesale price of €175 per MWh was a noteworthy achievement. It's four to five times the monthly averages for most US regional markets for example.

January was a more average month with 30% of electricity from wind. March figures will be interesting to see, since the wind died pretty much on the first day of the month, and the first and last weeks of the month have been extremely lacklustre.

"Gamblers in O&G shares (like me in 20 at present) should just be honest with themselves and others: they have no interest in anything but profiting so should give up ranting about energy security etc."

Speak for yourself. I've been following energy issues and the O&G industry for 20+ years, far longer than I've held shares in them. I'm VERY interested in energy security and strongly in favour of nuclear technologies as the main hope for long term, low carbon baseload power. My objection to wind energy is that it is diffuse and unreliable. Far from now being "the cheapest form of energy" as Green ideologues claim, it is an ultra-expensive, resource hungry, environmentally unfriendly monster. It uses crazy amounts of land, copper, and rare earths per megawatt of capacity, and that's just the turbines themselves. It also imposes uncounted costs on other sectors of the energy market.

This is not idle speculation -- look at the government's own costings for 2030 and beyond in Ireland. Or show me a place where energy costs have actually gone down as a result of all this supposedly "free" wind. Germany has higher energy prices than its nuclear powered neighbour to the west or its coal burning one to the east. Its lauded Energiewende program is a dismal failure. Environmental objections to wind farms are widespread. Electricity prices have soared -- they are 43% higher than the EU average and 50% of electricity bills are taxes and charges to support renewables. And after all that Germany missed its 2020 emissions targets. Merkel admitted in 2019 that if they were to phase out coal and nuclear they would have to rely on massively increased gas. She forgot to factor in that their main supplier is a psychopath.

I have written here numerous times that Barryroe is not going to save the world, nor even Ireland. On the other hand, I do have a pretty good idea of how utterly dependent modern economies are on oil and gas. Axing the supply before we have a viable transition approach is batshyt crazy. Lunatics like Ryan are happy to drive us over a precipice, appealing to non-existent technology that they hope will come to the rescue. That includes battery storage -- which has a role in peak shaving but cannot conceivably be an answer for long term storage -- and green hydrogen which is disastrously inefficient. Like numerous biofuels entrepreneurs in the last decade (until their projects all went bankrupt), Ryan is applying "Silicon Valley" thinking to energy -- falling technology costs will fix any problems. But energy is not like software -- you can't fool the laws of thermodynamics.

If you want to bet on future technology that will actually work, there is Gen IV nuclear, and there is the Allam Cycle (under development for years and which delivered actual power to the grid for the first time last November). The latter burns fossil fuels with 100% carbon capture. Of course, the Greens are ideologically opposed to nukes and fossils, even low carbon o

I presume this refers to the Annoual well commitment.

"What was the broker saying we were worth on the day the sp reached £1.02?"

a) Different broker, b) that was exploration, this is development.

Never ceases to amaze me how twisted the panties get round here when someone merely dares to repeat the valuation given by SOU's own official broker. Zero for Phase 1, 8p for Phase 2 (assuming no onerous strings attached to funding), additional exploration potential.

Pity Sleepy Ryan didn't get his head down at school and get an education and a proper job. Maybe the country wouldn't be getting screwed by a failed bicycle salesman on a power trip. (Or is that a power *nap*. Whatever.)

"Really? Just because you keep saying this, that does not make it true. You probably mean to say it offsets all possible liabilities".

Not being cheeky but that is what "net" means.

"and whilst we are at it, let’s ignore booked reserves and resources."

Yes, booked reserves are an asset but not one that is being assigned much value until SOU shows how it is going to get them out of the ground, and at what cost.

That's my interpretation of why the share price has been sitting at roughly the same level for the past two years. I'm open to other explanations from all the people who upvoted your comment and clearly take umbridge at mine. However, they'll also have to explain why SOU's official broker also values Phase 1 at zero.

Manyana: "I don't know about you but it hasn't been too windy lately."

I have actually never seen it as low as today. Our 4.5 GW of nameplate wind capacity was producing less than 45 MW this morning -- 0.1% of of capacity! And it was the same all day, while system demand was above 5 GW:

https://i.imgur.com/G1xGjyo.png

It's been a pretty bad week too. As usual when we get a big lazy high pressure parked over us, generation falls off a cliff:

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

Can you imagine what it would be like with the 30 GW that Ryan wants to build after 2030? Electricity would be worth essentially nothing at times of peak generation, making it impossible for backup generators to compete. And when the wind dies for two weeks (or two months as it did last year) ... well, 30 x 0 = 0.

Malcy's right that Sound has transformed from explorer to development company. By the time first gas flows, that transformation will have taken six years. What has always seemed obvious to me is that the transformation marks the end of the speculative valuations of the past, and the start of more realistic ones. Anyone who imagines the share price just randomly taking off one morning has missed the point. A developer is valued on their future cash flows, not on dreams of hitting some unknown jackpot. While Graham has indeed turned the company around against some pretty stiff headwinds, most of what is happening now is already built into the valuation. We are now on a well-signposted path, not a series of make-or-break drills.

Malcy says SOU deserves a rerating, but for what? As a reward for a job well done? That's not what investors (savvy ones, at least) pay for. The net cash flows from Phase 1 LNG will be zero, and right now that's what SOU is worth. Phase 2 will be a different story, but it's going to be some considerable time before we know where the large amount of money for that is coming from and what strings will be attached to it. I don't see anyone piling into this share until there's a lot more clarity.

The US is begging oil producers to increase output. Actually, they started doing it last November during the run up in oil and gas prices. Back then they were trying to pressure the Saudis and Russia to increase output. Ironically it was at the COP26 summit that energy secretary Jennifer Granholm said in an interview: "The message is we need to increase supply at this moment so that people will not be hurt during the winter months". Biden at the same time was criticising OPEC+: "The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right". Oil was a mere $80 -- that already seems like the good old days.

https://www.cnbc.com/2021/11/05/granholm-opec-message-increase-oil-supply-so-people-dont-get-hurt.html

Now they're at it again. Granholm says: "We are in an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and minimize harm to American families". To oil executives she said: "I hope your investors are saying these words to you as well: In this moment of crisis, we need more supply ... right now, we need oil and gas production to rise to meet current demand".

https://www.cnbc.com/2022/03/09/us-energy-secretary-granholm-calls-on-oil-and-gas-companies-to-raise-output.html

The hypocrisy is nauseating, of course. CNBC says: "In her appeal to an industry that has felt alienated by the administration, Granholm said the Department of Energy and the Biden administration broadly are ready to work with producers."

But I will take hypocrisy any day over the frankly scary attitude of Ryan, who is staring an energy apocalypse in the face and still yakking on about green hydrogen that might come on stream ten years from now (*IF* he puts a bolt up the backside of his planners). The Biden admin at least has the good sense to recognise a crisis coming down the tracks when they see it. Ryan is tinkling the bell on his pushbike and expecting the train to get out of his way.

Ryan won't change his mind, but he might conceivably get overridden. The pain for consumers is going to get very real starting next month. A 200 quid rebate on the leccie and a temporary reduction in fuel duties is not going to soften the blow very much. Paschal Donohoe is quoted in the Irish Times and Examiner last week saying "all energy costs cannot be covered by the State" and there are "no plans for further action on energy prices". For now he is backing Ryan's blather about accelerating the transition to renewables. However, everyone already knew that was years away and came with its own eye-watering costs. The near term price shocks are on top of all of that and could focus a lot of minds very quickly. No "acceleration" can avert that, especially when Ryan's planning bureaucracy is already seen to be an albatross even for wind suppliers.

IOOA has tweeted the full Indo article:

https://twitter.com/OffshoreIreland/status/1506321306576424966

Ryan really is a mealy mouthed twat. Says we can't be nimbys about wind farms up and down the Irish Sea. But apparently we *can* be nimbys about other people's hydrocarbons which we will continue to import with gay abandon. He's also a condescending twat -- says he wants to win the energy argument by "patiently explaining energy economics". So when's he going to lay it out? All we've seen so far is an unworkable plan to spend 125 billion of taxpayer's money on an insecure energy system, to save 0.05% of global emissions by 2030. Delusional!