Member Info for ps200306

And since you got me on a roll:

Annual coupon from gas purchaser loan: 1.55m
Coupon from bond: 0.67m @ 2% + 1.0m @3% deferred.
My estimate of $3.5m annual costs therefore leaves SOU with $1.3m to cover everything else: wages, consultancy, maintenance of permits, etc. etc. etc.
BUT, from 2023, SOU has to amortize the bond at 5% every six months, i.e. an ADDITIONAL $3m annually.
Remember, SOU total revenue from LNG is only $8.8m.

Then in 2027 approximately $27m falls due for the bond ($33.5m less $3.5m converted into shares, less $9m already paid, plus approx. $6m in deferred coupons).
In 2033 the $13.5m for the gas purchaser falls due.
If you make annual provisions against those loans ... well, don't bother -- SOU doesn't have enough revenue to do so.

So, ST123, what have I missed? Are you noticing any net revenue for SOU?

Oh, and I forgot this:

ST123: "You mention the company debt but like the rest of us are clueless as to what that currently is."

Do you actually read the company news?

Bond: EUR 28.8m = $33.5m (RNS 28-Oct-2020)
Gas purchaser: $13.5m , with an 11.5% coupon and 12 year term (RNS 20-Jun-2020)
Tax bill: $0 - $14m (RNS 03-Sep-2020)

Total: $47m to $61m.

ST123: "PS you spout some facts mixed with much speculation and are kidding no one. "

Care to be specific? Of course you won't. You'd be forced to admit that everything I cited is public information available via RNS (with one single exception that I noted).

"We do not know the tax situation or the outcome of what will be finally agreed with the bond holders."

But we know what's proposed. Do you think the bondholders are going to come back and say: "nah, it's too generous, we want less"? What I have presented is the *best* case. The debt figures I used are available via RNS. I have made allowance for the tax being either zero or $14m.

"We are unaware of so many factors that it’s pointless trying to pretend otherwise."

Feel free to enumerate the possibilities. You won't, of course. Your aim is simply to cast doubt on EVERYTHING. Weirdly, though, you are utterly convinced that the SP will rise in spite of your protestations that we can't possibly know ANYTHING. Catch a grip man. Investors are forced to make their best estimates of company prospects ALL THE TIME, despite limitations to knowledge. We actually know a great deal about SOU's roadmap for the next several years (not to mention their track record from the last several).

"we all know that your past narcissistic predictions of the company’s demise have turned out to be false"

Point out where I made such predictions? You won't. I (mostly) bailed out of SOU because its medium term prospects are poor no matter WHAT happens. It has painted itself into a corner. I haven't -- and I don't -- say the SP can't go up from here. Just not by enough for *me* to justify staying invested. Everyone else's mileage may vary.

"you slowly appear to be changing your tune"

Nope.

Your position is bizarre in the extreme. You've spouted "in Graham we trust" month after month. But you accuse *me* of speculation for using actual numbers issued by the company? I can only think of four possibilities, none of them flattering: 1) you're getting paid for running PR, 2) you're joking, 3) you're in denial, 4) you're an idiot.

Finished the report. Summary: the plan is to increase renewables penetration to 70% by 2030.(Actually, just wind power -- there's nothing else). There are no feasible power storage technologies on the horizon, so system adequacy and resilience is a big challenge. Interconnectors will not solve it because neighbouring countries face the same challenges as us. Meanwhile, a third of our baseload capacity using coal, peat and distillate fuels will be retired. We need lots more gas-fired generation for resilience. Total gas consumption will go down, but peak gas usage will go up. Our gas supply is highly vulnerable as Corrib and North Sea fields deplete. We are lacking gas storage facilities. We need an LNG import terminal. The cost of changes to the power system is eye-watering and the gubmint better tell the public to brace themselves.

Sobering stuff.

ST123: "Ps more figures provided but again speculative. I’m not saying some of them may very well be correct but you do not have the insider information that would allow them to be up to date and correct."

What sort of drugs are you on? Every single number I used was from an RNS, and I gave the date of the RNS so you can look it up. It's price sensitive so there *is* no insider information unless Saint Graham (in whom you trust) is a crook. The sole exception was a P/E ratio, which I suggested you should choose yourself.

"Like I said earlier you do not know any more than anyone else’s so stop trying to prove otherwise."

And like I said earlier, I'm not claiming to. It's all easily accessible information that every shareholder knows unless through willful ignorance.

http://iae.ie/news/national-energy-and-climate-plan/

Ho-Lee cr*p! I'm only a quarter of the way through that report so far, but I thoroughly recommend it to anyone interested in numbers. I admit I started it out of selfish interest as a PVR holder, but now it genuinely scares me what the Greenies want to inflict on us. €7 billion EVERY year needed for the power system alone, including provision for EV charging points for one third of the vehicle fleet, and heat pumps for one third of homes. And that just gets us to 2030, with vastly more to do for net zero by 2050. If those costs are passed on to consumers the effect on electricity prices are staggering. (If you averaged them over the 26 TWh we used in 2017 it would triple the cost of electricity. Even if the assumption was that we double electricity generation by 2030 -- and right now we only manage about 10% increase per decade -- it would double the price by my reckoning). No wonder the report says: "The implications for the cost of electricity should be communicated to electricity customers and Irish industry as soon as possible".

Just as scary are the implications of relying on intermittent generation from renewables. At one point last December, Ireland's entire 4,000 MW of rated wind capacity was producing a total of 1 (one!!!) MW. During winter 2010 there was a FIVE WEEK period when wind power produced at less than 10% of capacity, including a ten day period when it was close to ZERO! What happens when we hit the targeted 70% penetration of renewables in 2030? A period of low output could not be compensated by any existing or planned interconnectors. Either we have a very large boatload of gas generation on standby or we are in serious, serious trouble. I don't think it's an exaggeration to say people would die.

I'm beginning to side with Bjorn Lomborg (look him up on youtube) -- the trillions that the world plans to spend on green initiatives is completely nuts. It will hurt us way, way more than climate change.

Btw, if anyone *had* been paying attention, they could have called me out on the number of shares and warrants in my figures. Turns out I included a couple of hundred of million warrants that were part of October's bond restructuring proposals in addition to the latest ones. One set supersedes the other, of course. The total number of shares and warrants is a "mere" 1.8 billion.

[For clarity, these break down as: 1,326m after last share placing (RNS 3-Aug-2020), 160m promised to gas purchaser (RNS 29-Jun-2020), 241m shares and warrants to bondholders (RNS 29-Mar-2021), 60m warrants from years ago at 24p and 30p which, it's fair to say, are unlikely to be exercised (RNS 2-Oct-2020).]

So here's your chance to show off your arithmetic skills folks. 4 million mcf / year at $8/mcf (RNS 29-Jun-2020), less $13m for LNG plant lease, multiplied by 47% SOU share. That's your gross revenue from LNG. P/E is based on earnings that could be paid out as dividends to shareholders, i.e. net of all taxes and costs. So deduct $3.5m which is an (almost certainly lowball) estimate of the bond coupon, gas purchaser loan interest, and SOU running costs. It completely ignores up to $60m of short term debt which SOU will certainly have to make provision for. Now multiply by your favourite P/E ratio. Divide by the number of shares. Divide again by a dollar-to-GBP factor. I get a shareprice of 4p. How about you?

In reality, if SOU makes provision for their debts, their net revenue out to 2027 is LESS THAN ZERO. There is NOTHING to return to shareholders. In fact, they HAVE to raise pipeline money or they are bust even after LNG. Fullscale production of the horst could net SOU an addition $75m/year IF they retained 47%, which of course they have no chance of doing given that $150m would have to be raised for the pipeline. The Parsons deal was worth about 19p/share according to Malcy, but I suspect that would be much less were it to happen now given the extra shares issued, extra debt, and a sixth of the gas diverted to LNG. But now we ARE moving into pure speculation, so I'll leave that to others. Also, whatever about the pipeline, I think it's exceedingly unlikely that SOU could raise money to do more drilling anytime in the foreseeable future.

Apologies in advance to anyone offended by the mention of, you know ... actual numbers.

ST123: "his opinions like ours are speculation at best."

Except, you don't HAVE an opinion on price, speculative or otherwise.

ST123: "What we have observed however is Graham and the board working hard behind the scenes trying to deliver a path to first gas under trying circumstances. Graham has performed well since taking up his position and I think we can all agree he is more trustworthy than the previous CEO."

Serious question -- do you get PAID for this continual PR hype?

ST123: "How long this will take and by how much is anyone’s guess but anyone claiming they know more than anyone else are either liars or deluded."

And where did I claim that? All I've done is post numbers from RNS's that anyone paying attention has seen already. The only variable I introduced is an industry average P/E ratio which you can google yourself. In fact, you could quite easily dispute it and find a value of 25 or more, compared to the 17 that I used, depending on the source you pick. But I guess everyone -- you included -- is too busy taking offence and clutching their pearls at the outrageous idea that someone would actually offer a valuation. Why is that?

ktf: "oh look the bid is up again... not working for you today, is it?"

I think *you* need to let go of the obsession that I am willing the share price downward. If SOU gets to first gas it will be worth (after the latest dilution) about 6p per share based on revenue (i.e. if you ignore about 3p per share worth of debt). That's a 3-bagger from here, so yeah, fill yer boots.

Thank you sundance. The pearl clutchers want to ignore that I still have a very considerable amount of money sunk in SOU. A small fraction of what I had, admittedly, and what remains has been decimated but I am still invested here. I see absolutely nothing wrong with pointing out that Graham has overpromised and continues to underdeliver on his pronouncements. Nor is it irrelevant to point out that shareholder value continues to evaporate under their noses as, for instance, yet another 20% of their equity effectively disappeared on Tuesday. These are very simple calculations and hardly controversial, so the shoot-the-messenger attitude is intriguing to say the least.

ktf: "the only failure I see is you ... personally I'd rather listen to people who are good at investing"

LOL. A very Trumpian response. So who DID you listen to when you bought into this dog? Same person that gave you the tip for that AIM stock you lost 20k on a while back and had to fess up to your other half? (Posting history's a b*tch, isn't it? ;-)

Interesting to have an official admission that the cost of wind power should, by rights, include the cost of underutilised gas generation plant. Doubt if we'll see it factored into official figures though.

ktf, so you reckon a nonchalant declaration that "we failed", as an afterword in an RNS that was only put out under pressure to quell media speculation, is adequate? If you think that the end of exclusivity is not a particular problem for negotiations then you must also think that the *start* of exclusivity was not particularly noteworthy either. So you agree with me that the December RNS was diversionary bovine faeces.

Bottom line is that Graham intended for FID in H2 2020, on the back of which intention he sucked shareholders in for more cash. We got a meaningless RNS in December announcing FID in Q1 2021. Now that's missed too, and Graham can't be bothered putting out more than a footnote in an otherwise unconnected RNS to say "progress is continuing (without exclusivity)".

You seem to have the same lack of ambition as our pal ShareTrader123. Ironically, he's the guy that kept insisting Graham was not only aiming for FID in 2020 but that he had PROMISED it. But, "in Graham we trust". LOL.

Agree with you Mamms that it's last roll of the dice for PVR. However, I don't think the current market jitters are telling us much about the likelihood of SpotOn coming up trumps. An update from Linn would be nice, but then what's he gonna say other than "progress is continuing". I do think it will absolutely shocking if Linn has led us back up exactly the same garden path as the bronzed incompetent.

Does nobody else find the lack of an RNS today absolutely shocking? It's as if Graham thinks he can fling out any sort of "news" to placate the plebs and ignore other prior commitments. The bond proposal RNS in no way explains what happens now that the period of exclusivity with both ItalFluid and the gas purchaser have expired. There is now no binding agreement, even in principle. The December RNS said FID by March 31st. The latest RNS says there'll be a noteholder meeting on April 14th. Is Graham even going to bother his ass explaining the dependencies involved? Does FID occur the day after the bondholders agree, or are we then waiting on the tax bill? It's hard to believe that commercial sensitivities prevent him from even setting out the basic parameters.

Deal full finance: 100p in three years.

True, LW, but I am not as pessimistic about first gas as the pearl-clutchers on here seem to think I am. The bond proposal is a significant development and I can only presume Graham has done his homework this time and has enough bondholders on side. There *is* still the small matter of the tax bill which I would think needs to be sorted before contracts get closed. Six months elapsed already on that one and it's obvious the simple "we don't owe it" excuse didn't work. It could be several more months before FID is taken which might present SOU with a short term cash problem. But then, they're adept at the fake good news RNS's like the June, December, and now March ones and if they can jack the share price up a couple of pence it'll be time for another of those well-practiced cash raises for yet more dilution.

But no, my misgiving , as I said, is simply that SOU just isn't worth that much anymore come what may. Two billion shares and counting, a trickle of revenue from LNG, up to $60m in debt and no net cash for most of the 2020s. It just ain't a pretty picture. If it takes this long to borrow $15m, where is $150m going to come from?

Ok, I give up, ST123. The SP will rise and it's anybody's guess what it might do. That seems like a very sensible basis on which to commit your money for several years.

You're absolutely right Rubber, I did. That was then, this is now. When the facts change, I change my view. Do you? For starters, that 90p per share would be less than 30 now, based on dilution alone that has ALREADY OCCURRED. Does anyone thing SOU is going to raise many times its market cap to pay for a pipeline without suffering the same again? The last deal that might have raised pipeline money had us giving away 70% of Tendara, and that didn't even cross the finish line. And of course the 90p was based on starry-eyed estimates of the resource potential as marketed by the former CEO. As I say, that was then, this is three drill failures later.

I presume there'll be another RNS tomorrow given that the exclusivity period ended today. Or does Graham think that the bondholder proposal means he can say nothing about the latest missed deadline? I suppose he has form, as that's what he did in December. He put out a last minute RNS about a "letter of exclusivity" with a supplier, completely neglecting to even mention that the plan up to that point was that all contracts would be signed, sealed and delivered, and a final investment decision taken in H2 2020. Is this going to be another bait and switch?