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Been reading up on this interesting concept of EFC (Equivalent Firm Capacity). An intermittent power source such as wind may produce lots of energy, sometimes even in excess of demand. But its usefulness to grid planners takes into account concepts termed LOLE and EEU -- respectively: "Loss of Load Expectation" and "Expected Energy Unserved". The former refers to those times when the source is unavailable to supply power to the grid. This may not matter, of course, at times of low demand. That's why planners seem to prefer EEU as a measure of those times when demand cannot be met. Even that doesn't imply blackouts if demand can be managed appropriately: "energy unserved" just means energy that would have been used had it been available.

Why does any of this matter? Because, apart from the day-to-day market for electricity, there is also a separate Capacity Market. At a capacity market auction, licensed electricity providers pledge units of production (CMUs) for future contributions to the grid. Consumers can also engage in the auction, by pledging Demand Side Response units (DSR CMUs) -- basically a promise to reduce consumption below a baseline level in response to reduced grid capacity. CMUs are worth money, so obviously nobody should be allowed to sell capacity they don't actually have. That's why you need an Effective Firm Capacity calculation for renewable sources like wind and solar.

On the basis of the EEU metric, a derating factor is calculated and applied to renewables capacity to turn it into an EFC. And it's pretty bad. The best factor is 14.65% for offshore wind. Note, it's not a *discount* of 14.65%, it means 14.65% of the installed capacity can be counted as Equivalent Firm Capacity. For on shore wind it's 8.98%. For solar it's 1.17% !

And it gets worse. The more you install, the lower the derating factor becomes as your renewables become a larger part of the mix. The numbers above are for 2020-21, by 2023-24 it drops to 12.11% for offshore wind and 8.20% for onshore. This all assumes little or no storage (suggesting the modelers agree with my prognosis that grid-scale storage is a pipedream). The derating factor for solar improves slightly because solar thermal storage has the potential to offset generating time by a few hours.

The numbers quoted were calculated in the UK. The actual numbers used in the market are set by whoever runs the capacity auction. So we see that in Ireland last year: "As of June 2020, the all-island installed wind capacity was 5,511 MW. Based on the Capacity Market derating factor of 0.094 for wind in the 2020/2021 T-1 Capacity Auction, this corresponds to 518 MW of wind capacity for adequacy purposes."

Sources:
https://www.emrdeliverybody.com/Prequalification/EMR%20DB%20Consultation%20response%20-%20De-rating%20Factor%20Methodology%20for%20Renewables%20Participation%20in%20the%20CM.pdf
https://www.eirgridgroup.com/site-files/library/EirGrid/EirGrid-Group-Winter-Outlook-Brochure-2020-2021.

No, I'm still expecting that Phase 1 is coming. Many a Friday deadline ends up with lawyers burning the midnight oil over the weekend and news hits on Monday. Only problem is that this one involves a cheque arriving in the bank. Hopefully nobody would be mad enough to inform the market that it's done and dusted before the money has actually arrived. And while lawyers can work the weekend, bankers don't.

Well, there's the small matter that the $18m loan from Afriquia Gaz was going to pay for SOU's G&A as well as their commitments to ItalFluid. We're not expecting Phase 2 news until February (even if SOU broke with previous habits and the deal actually came in on time). It's a long time to wait for an alternative source of money that SOU needs to keep the lights on. Not impossible, but it doesn't sound very prudent.

I've heard it all now. Phase 1 (which is currently at 300% of the original time budget) is so far behind that we might as well wait for Phase 2. And we discover this on the day that the Phase 1 deal was supposed to close.

Nothing amazes me more than the confirmation bias and lack of self-reflection from posters here. Not wanting to single anyone out, there are many examples, but to take just one:

keeptofacts, 28-Sep: "seems to me like news on lng / fid etc in the next few weeks at most."

03-Nov: "pretty sure Graham would have negotiated a longer extension than a month if there was any doubt about getting this over the line."

03 Nov: "can't believe anyone would waste their time with a one month extension if a positive result within that timeframe wasn't nailed on."

03 Nov: "no guarantees obviously, but my view is that we'll get a run of good news in the next few weeks."

09-Nov: "I think we will see some decent positive news this month, probably pretty soon."

30-Nov: "looks rather like we don't need an extension :) hard luck old chap."

01-Dec: "looking good to me. think we might be having a good Christmas this year :)"

06-Dec "Think this will start moving properly north soon."

17-Dec "perfectly normal. People hype up a date, rns doesn't arrive (as no sane person thought it would) ... "

Now, I happen to think the LNG deal will happen as anything else would imply we were totally led up the garden path. But even at that, nobody seems to be the slightest bit concerned that IT ISN'T WORTH ANYTHING, other than saving SOU from going to the wall (which is important of course, and keeps the show on the road for possible actual, valuable developments).

Dear Santa,

No doubt the elf shortage is affecting supply lines. Nevertheless, your no-show for the last ten years is making me seriously question your existence. Please send a CEO, a strategic review, and a funding announcement. Milk and cookies in the usual place, but this is your last chance.

Yep, never been a SOU deadline they didn't manage to miss. I could well be wrong, but I think if the AG money had arrived in the bank we'd have heard about it, and seems unlikely they would be able to time such a transaction to exactly coincide with the deadline date of 17th. I'm expecting a delay or a diversionary RNS. Remember this entire thing was supposed to be all done and dusted a year ago, and instead Graham dropped a diversionary RNS the day before Christmas eve to announce a letter of exclusivity with ItalFluid and an extension of the exclusivity arrangement with Afriquia Gaz.

No doubt the rampers who have descended in the last week and snapped up 120 million shares will manage to exit with their profits quicker than you can say "yet another missed deadline".

Some tidbits from Predator this morning:

"In response to Ireland's lack of any operational gas storage facility, the Ram Head technical evaluation included a potential solution to develop a 10 to 15 bcf gas storage facility in an existing gas discovery based on management's 20 years of experience in the Celtic Sea in identifying potential gas storage reservoirs and developing gas storage desktop projects. Such a facility would link in to the FSRUP project to provide summer storage of gas and security of indigenous gas resources during times of peak gas demand and volatility in gas prices."

"Towards the end of 2021 it was announced that 2 GW of new gas-fired power generation would be required to be built. Gas supply required for full operation of the power plants would be 300 mm cfgpd, equivalent to discovering another Corrib gas field or developing the deep discovered gas at Ram Head. The additional power-generating capacity is designed to provide security of energy supply at peak times of demand. This would coincide with peak periods of demand in the European gas market when gas prices are most volatile and gas supplies may be stretched to meet demand. Ireland currently would import the gas required at these peaks times via the interconnector with the UK. Gas price volatility would not be addressed in this manner and electricity prices would continue to come under pressure, having risen 57% in Ireland just this year."

https://polaris.brighterir.com/public/predator_oil_and_gas/news/rns_tool_widget/story/xo707dr

I should have mentioned that the 8.2p target does not include any exploration potential. The valuation method is a bit opaque but you can sanity check it against historical forecasts. If anyone remembers the famous "value of 1 Tcf to SOU" of £1.50 -- which turned out to be only half that -- it actually accords reasonably well. Take half of £1.50, bump it back up a bit for the recovery of the Schlumberger share, multiply by the 0.377 Tcf recoverable in the Horst, divide by 3 to reflect the share dilution since the original forecast, knock off a chunk to reflect that the LNG is not worth as much as pipeline gas, knock off another chunk to reflect that SOU never expected themselves to be paying to get the gas out of the ground, and another chunk to reflect £3.5m annual G&A costs for a good number of years, and you arrive in a very roughly similar ballpark.

"Anyone modelled it at all?"

Yes -- SOU's corporate broker, SP Angel. Most recent target price as of August 9th, assuming Phase 2 closes and SOU retains its 75% working interest, is 8.2p.

https://www.soundenergyplc.com/media/1689/1-soundenergyagfinalsw.pdf

Gotta love the irony of someone predicting £1.00 but admitting that they will exit at 4p themselves. That's not how it works. For a sustained rise you need investors willing to buy in at higher valuations. There's clearly a raft of investors just waiting for their chance to flee at fairly low breakevens. That selling pressure will constrain any rises. It's why only real intrinsic value will lift this share. The intrinsic value -- if this week's expected news arrives -- is zero. It's still all about Phase 2 which gets you to c. 8p, assuming no dilution.

"considering we have one of Ireland’s preeminent PR and communication experts on our board, the silence from Providence is very baffling"

She's a non-executive director. Do the PVR non-execs do any more than get together for a quarterly Zoom meeting to talk about their share options? No evidence to the contrary so far this year. Time to get some executive muscle to move things forward.

Yeah, nothing except funding really matters right now. Been that way for years.

Have you *looked* at Sinn Fein's climate policy? It's identical to the Greens apart from a couple of minor nuances. No new offshore exploration, a total ban on onshore fracking, closure of coal and peat generation by 2025, no importation of fracked LNG, no investment in fossils by state or semi-state entities. They go further than the Greens in some areas -- all data centres to be powered by self-generated 100% renewable energy (not just renewables purchase agreements), fossil fuel plants like Moneypoint to be replaced by biogas, NOT natural gas.

There's a few extras in keeping with SF's socialism, such as community owned wind farms instead of evil corporations. Also no new carbon taxes without spending it on infrastructure for workers, feed-in tariffs for domestic microgeneration, dialog with trade unions as a central part of a just transition, income support for workers during the full duration of transition, ownership of various entities by workers' cooperatives, and "an equity lens to understand the impacts in terms of gender, race and class".

SF are pushing the message that: "Fine Gael and Fianna Fáil want to leave it to market forces... At the same time it is carving up the Irish Sea into speculative boxes for fossil-fuel extraction and agreeing to a beef deal with Brazil that has hastened the demise of the Amazon". While they probably understand that confiscation of existing offshore petroleum licenses would be illegal, in all other respects they are trying to out-green the Greens and to do so within a framework of Socialism .

I find the idea that SF would be more Barryroe-friendly fantastical. They are Socialist populists. They want to leverage the popular green outlook. Sure, they'd prefer if evil corporations paid the 125 billion euro price tag for the "just" energy transition. But the average person is going to see the boosting of public coffers through fossil fuel extraction as hypocrisy, which is why populist politicians of all stripes will not push it.

https://www.sinnfein.ie/files/2019/SF_Climate_Justice_Nov_2019.pdf

Meanwhile Jimmy Menton hasn't even found us a CEO let alone come up with the strategic review. Realistically there's one working week left in 2021. I don't trust this crowd to produce anything to be honest -- completely new board with a boatload of share options and little or no skin in the game. Talk is cheap. If they don't put out hard information on actual solid funding in the immediate future one can only assume PVR's swansong is imminent. This has been a bull**** company run by bull****ters for the last decade and now events on the ground have overtaken them.

Manyana: "Sinn Fein and the Independents (mostly farmers) will certainly be the next government. ... So all we need now is a constitutional crisis and a swift general election and Barryroe will be on its way..."

ranger4: "When it comes to signing off for barryroe exploration Sf will not work out any better than previous fg,ff,green gov"

Ditto ranger4, don't know what fantasy Manyana is living in. There's not a hope that SF will be more Barryroe friendly. They are populists courting the young green vote. SF senator Lynn Boylan wants to reduce the voting age for that very reason. For anyone who doesn't know her, she has a master's degree in Environmental Impact Assessment and European Environmental Conservation Management, and is the sponsor of the "Protection of the Native Irish Honey Bee Bill 2021". Barryroe friendly? I think not.

TO'R wanted to prove up gigabarrels of oil without the messy business of PVR having to transition from explorer to producer in its own right. I presume the endgame was to farm out production to a major and watch the dollars roll in. Now it has to raise finance on its own and is finding that nobody is queuing up to take that risk.

I don't believe there is anything materially wrong with Barryroe. If TO'R knew of such an issue and hid it from the market it would be a massive fraud. Everything about Barryroe looks right. There are numerous successful exploration drills. Seismic shows that the field structure is less complex than the more heavily faulted Seven Heads field overlying it. However, there is only so much risk that can be mitigated without appraisal drilling, so there will always be some amount of risk associated with Barryroe funding.

There are thousands of billionaires who could develop Barryroe on their own, and tens of millions of millionaires. The existence of people with money is not in doubt. The question is whether they are interested in funding the project and what they want in return. Barryroe development costs are not "small change", they are 10% of Goodman's entire personal net worth. Rich people didn't get rich by putting themselves personally on the hook for risky projects. I also doubt they'd put up six times the market cap of a company without expecting to own said company. I'm afraid this suggestion is from fantasy land.

Tincan, it's definitely possible for LNG plant to be modular so that you don't need to replicate the whole lot in order to scale up production. I think the bigger issue is that the margin on LNG is less than pipeline gas because of the inherent inefficiencies. The route SOU is trying to take makes sense -- LNG revenue to keep the wolf from the door while aiming for Phase 2 to maximise profits.

It's the most hated phrase in the Sound lexicon, but allegedly correct in this case: 12 to 18 months.