Member Info for ps200306

About 80 shopping days left until SOU run out of money ... again. Expect some ambiguous good news between now and then. That's usually the cue for a raise, rinse and repeat. I notice Sharetrader123 has gone very quiet.

I only saw one. It was a rebuke to those dissing soundboy. It might also have made a somewhat less than innocuous comment about the former management.

No. Some comments have been removed.

I wasn't entirely being sarcastic 1cag ;-) My own holding is on Euronext and (along with some judicious averaging down) I'm down less than 50% on PVR for the first time in several years. I was just noting that it was because someone played silly beggars paying 25% over yesterday's asking price for a massive €69 worth of shares. But I'm more than happy to treat it as a sign of great things to come. I *am* cautiously optimistic that Linn is going to bring home the bacon and give us a ten-bagger from here in the next couple of years.

JH77: "Pretty disappointing rise in the SP so far today....all things considered."

Oh I dunno, it's up 25% on Euronext. Only thing is, the number of shares traded is about the same as the number of cinema tickets sold during lockdown ;-)

I guess we're gonna need more substantive news than "we do actually own the acreage we're trying to farm out".

I agree it's important to have green credentials, but I don't believe CCS is likely to happen anytime soon in spite of the Greenie heading up DCCAE. The cost of electricity generation using current CCS techniques can go up by a factor of 3-5, rendering it economically unviable ... which is why you don't see anyone doing it. Even the Greens might have difficulty selling those sort of costs to the public. Read about it here: https://cleantechnica.com/2016/01/19/carbon-capture-expensive-physics/

It's possible there will be a technological breakthrough and there's an excellent candidate technology under test right now in La Porte, Texas. The Allam Cycle is a way of burning an oxyfuel (a mixture of natural gas and pure oxygen) in a dense CO2 stream which is used as the working fluid for power generation. The CO2 from fuel combustion mixes with the working fluid, with some of it recycled back into the combustion chamber and the rest siphoned off as a sequestration-ready pipeline stream. There are other major benefits like a much smaller generating plant and not needing cooling water. Without something like this I can't see CCS being feasible, and even *with* it we may not be talking about a commercialisation timeline of any use to Barryroe.

What's the big difference? Ryan was Minister for Communications, Energy and Natural Resources from 2007 to 2011.

Ironically, Ryan's last spell in government saw the initiation of the Corrib gas field. I don't think the government can justify massive delays in permitting. The license arrangements are an agreement between the government and the licensees to develop hydrocarbon resources with commitments on both sides. For instance, Providence's last extension on Barryroe involved a commitment to evaluate the Triassic and Jurassic plays. The government has to play ball to allow that to happen. During his Proactive presentation Linn expressed no worries about the upcoming survey permit, and just acknowledged that they will need to seek future permits well in advance of when work is planned, to allow for red tape.

ivans: "didnt know that we still have large warrants to be converted. how much more still remaining ??"

The raise earlier in the year include one 3p warrant and one 9p warrant with each share issued. It was basically a 50% dilution assuming all warrants are exercised. Can't remember the exact numbers (175m of each?). Check the RNS's. Basically, for the purposes of calculating a value for PVR assume 1.2 billion shares on issue -- which there will be after warrants.

EXTREMELY positive presentation from Linn. I like the cut of his jib. Reading between the lines, he's amazed that the Barryroe development was so comprehensively screwed up by the previous management.

As well as the "large proportion" that he expects PVR will retain, there was more info on the funding through initial development. 80% to be raised through the Norwegian export credit facility, the remainder on the bond markets. In other words, aiming for little or no further dilution of shareholders. Other info: SpotOn negotiations are proceeding as per plan; no reason to expect undue delay in the permitting process; has no interest in inheriting the Kinsale infrastructure other than existing gas pipeline to shore.

He mentioned late 2023 for production but wasn't clear to me if that's Phase 1 development or full field. Regardless, I see a lot of reasons to be positive here ... very glad I've been topping up! Carry on, Mr. Linn!

Presentation is up on the PVR website. Not a lot we didn't know already, but good to see it all pulled together. The payback time for development is discussed -- one year for initial development and 2.5 years for full field development.

JackSpade: "The figures I am quoting are from Alan Linn himself, who hopefully knows a lot more than the rest of us poor schmucks. He did quote a value differential of X 80 based on a share price of 3.5p."

Jack, from memory Linn was valuing 100% of the oil and did not factor in that PVR doesn't own all of it. The big unknown is what fraction PVR will retain after a farmout. Optimistically assuming 40% would give you an eventual valuation closer to 80-100p. On the other hand, that's only for oil in the Wealden/Purbeckian with deeper prospects as yet not evaluated.

1) 110%
2) 0%
3) $5
4) Fill yer boots

ST123: "Graham did promise that a final investment decision before the end of the year he said they “would” and not hope or try so that was a promise in my book."

Ok. You win. It's a promise. Have a look at this other list of promises: https://www.soundenergyplc.com/about-us/our-journey/

"Sound announces exclusivity for sale of Eastern Morocco. Selling 51% for headline $112m, solving development funding, and retaining production and exploration upside." That was a year ago. What happened to THAT promise?

"Heads of terms signed with a consortium for the front end engineering and design, construction and financing of the required infrastructure for a 20 inch pipeline and associated facilities under a ‘build-own-operate-transfer’ (BOOT) structure". That was over two years ago. What happened to THAT promise?

"Introduction of partner to Sidi Mokhtar". Four and a half years ago. What about THAT one?

And they haven't even mentioned 2020. FID by Q2. What happened to THAT?

If you believe that Graham has made you a promise, then keep in mind all the other promises that SOU has failed to deliver on. The only consistent thing is that each promise is followed by a fund raise to suck in people like yourself. The weirdest thing about your blind optimism is that you yourself are now down 60% even AFTER averaging down. You scoff about predictions of 1p but we finished the week at 1.17p. To be honest, Graham does not strike me as much of a mover and shaker. And my impression from the latest Q&A is that he's out of his depth. In any case, we will know soon enough. There will be no second chances after this one.

Cheerfully yours,
ps200306

ST123: "Considering we were promised a final decision by the end of the year, is this really feasible?"

You're very fond of the word "promised". Of course we haven't been "promised" anything -- no sane CEO would do such a thing. The aspiration for end of year has exactly the same status as the aspiration for end of Q2 had back in February. It'll happen if it happens.

ST123: "Given the tax issue is ongoing and having to line up his 3 ducks in a row with just over 10 weeks to finalise things then do you think that this is being a little optimistic or do you think the FID will be delayed beyond the end of the year?"

A little optimistic? You really are hilarious. The choice is not between end of year or a little later. A SERIOUS MIRACLE IS REQUIRED HERE. And no, I am not being miserable. I am being sanguine about the prospects of a lender forking out tens of millions to a company that has now demonstrably mismanaged its affairs and is loaded with debt. It's not a question of "we have a valuable asset, therefore funds are guaranteed". It's a question of whether the next company in the queue for a loan looks like a safer bet, without the murky past and the looming tax bill.

Obviously nobody can predict what will happen, but Graham's body language did not convey that we are barreling toward a happy conclusion faster than you can say "77 days to Christmas".

Levelup: "I wanted conviction from Graham that the tax bill was a mistake. We didn’t get that which is worrying."

Exactly my thoughts. In general I thought he looked sombre. He gave the impression the tax thing could drag on well into next year, and that we wouldn't hear anything in the interim. My additional worry is the "triple lock" he mentioned in relation to the gas sales agreement, LNG contractor, and financing. The gas purchaser needs to be assured that SOU can deliver the gas, the LNG contractor needs to be sure that SOU has the money to pay them, and the financiers need to know that SOU have a guaranteed income. Each of the items depends on the others. I would have thought the tax bill and the bond would also factor into SOU's credit worthiness, but those are potentially not going to be sorted until next year. Is that going to scupper the chances of having the other three items sorted in Q4?

ST123: "The Q&A did not offer the confidence we expected and although they promised a final investment decision it seemed they required a few things coming together which still may happen but also may not."

Why, how dashedly miserable of you ST123. What happened to "in Graham we trust"?

ST123: "Either way as you say the SP would increase but a more realistic value would be nearer 6 p IMO."

Is that based on anything other than it's higher than your breakeven, or did you just pluck it out of your a$$? You're a great one for offering opinions without a shred of evidence to back them up.

ST123: "Ps yes you took a not very well written article and cherrypicked one sentence to support your miserable outlook."

Once again, as already explained, no I didn't. I quoted one sentence and agreed with it based on the actual facts. I didn't use it as evidence. I didn't use it for support. I simply said it was correct and went on to illustrate that from the actual evidence, none of which was taken from the article. If you think anything I said was factually wrong, feel free to provide your "alternative facts". (But you haven't, so I guess you can't). With a combination of negative factors arrayed against SOU, and the need for every one of them to come out right in order for the company to keep going, my view is that the chances are probably worse than 50-50.

Nor am I miserable. I am down a large six figure sum on this dog which I am quite willing to write off. Indeed, my assessment is that I likely won't have any choice in the matter, so there's no point worrying about it. I don't know why you feel the need to project your own attitudes onto other people's judgements. Even if I WAS miserable -- what's it to you? How about you look after your own interests -- as I said, there's a bazillion cheap SOU shares just waiting to be hoovered up by a savvy trader like yourself. Perhaps attend to that and leave other people to their own prudential judgements. This is a discussion board. You may feel entitled to your self-appointed role in scolding everyone with a different opinion to yourself. I, in turn, will feel entitled to ignore you, especially since you have offered no alternative sensible rationale other than "in Graham we trust".

ST123: "stop using a rubbish article to support your misery"

I didn't. I quoted one sentence: "the plans are going nowhere fast", and I then supported that from the actual facts on the ground. We were told on 17th February that FID would be taken by end of Q2. So with this "promise" (as you referred to it) now being for end of Q4, we are six months behind on what was a four month timeline. Does that sound to you like we are going somewhere fast?

The Q&A told us nothing we didn't know. Again, nobody but you expected otherwise, as any material facts would have to be disclosed via RNS. Ironically, Graham is now using the famous phrase "12 to 18 months" for LNG development. So as I said, first gas is now 2022 -- probably mid 2022 *IF* all goes according to a revised plan that is currently about 150% behind. What we DO now know is that the tax situation won't be sorted any time soon and we won't be told anything about it in the interim. There is NO conclusion to the bond issue which is ongoing. There is NO movement on Sidi. And the LNG purchase agreement, the contract work for the LNG plant, and the financing of same, are in a triple lock situation where each depends on the others. So again, there will be no news until there is news, watch this space etc., and any problem with any of those three moving parts will kill the whole project.

Meanwhile, the question of where SOU gets funding for what is now a minimum of 14 months of operations between when cash runs out and first gas wasn't even addressed in the Q&A.

If you can't see any likely company-killing risks in there, I suggest you go and fill your boots with SOU shares which are now on special offer, rather than complaining to me about MY assessment. I've got financial plans to make, so you'll have to excuse me if I don't have time for head-in-the-sand blind optimism.

pduk: https://www.mees.com/2020/9/11/corporate/morocco-gas-development-dont-hold-your-breath/62206900-f435-11ea-8db4-7f54f7a2aa5a

The last sentence is the most damning -- "the plans are going nowhere fast". Too true. After wasting the three months to February getting jilted by a potential partner, and the six months before that on speed dates that came up with nobody except said jilter, the LNG plans were announced on Feb 17th as an "innovative, fast-track, cost efficient, micro LNG scheme targeting first LNG delivery during 2021".

We were told "the Company expects that it would be in a position to take a final investment decision on this development solution during Q2 2020, which would enable first LNG delivery during 2021". Well here we are in Q4 and hardly a peep has been heard. Instead of the expected FID in Q2 we got a non-binding HOT on gas sales. That news was used to leverage an equity raise that diluted us 20% for a relative pittance -- though even that was well above where the share price is today. Apart from that, there's been nothing other than the crushing news of a tax bill we can't pay.

There's no actual physical work going on. How long does it take to merely *talk* about the LNG arrangement? We've no news on funding -- either for development costs or ongoing admin costs to get us to first gas, no news on debt, no news on the tax bill. And by the way, having obviously slipped on the FID decision it seems unlikely that first gas is even in the first half of 2022 at this stage. Whatever is going on, this is clearly not the "fast track" that was announced in February.

As such, I consider the current plan to have already failed. At this point, no news is bad news. While certain posters stick their head in the sand over lack of progress and declare their blind faith in the BoD, I consider my very substantial investment here to be a write-off. Nothing short of a miracle -- in fact a whole series of miracles -- is going to revive this dog.