Member Info for ps200306

I reckon Sharetrader123 bought in after the June RNS at around 4p. Which means he's now down 60%. That's nearly enough to put him in the same boat as all the other miserable whiners on here, me included. The missing ingredient is time. He probably still hopes he can make a quick buck and a clean exit, but the ennui of waiting month after month will eventually take it's toll.

C'MON IN Sharetrader123 -- THE MISERY'S LOVELY!

Denmark can have higher renewable penetration because it is surrounded by much larger economies willing to trade energy with it.

https://www.youtube.com/watch?v=bcdsiHT0iOo

"Sweden generates over 50% of its needs from renewables"

... but only about 12% from wind, and a negligible amount from solar. 30% is hydro and 9% is biomass from the forestry industry -- resources that are fairly unique to Sweden. They also do a lot of nuclear.

If they can do offshore wind for £40/MWh that would be great. The new Dutch field, Hollandse Kust Zuid, is being built without subsidies. However, those 200m rotors need a square kilometre of space each, so it's very low energy density and is also going to take years to build. At full nameplate capacity it could supply 4% of Netherlands instantaneous power requirements or 0.3% of Germany’s. There are single gas turbines that can produce almost as much power as this entire 140 sq.km. field, much more reliably.

I think offshore wind is great, and all the better if they crack the floating variety (although it'll still need cabling). But if you look at the projections for global installed wind capacity, it could top one terawatt this decade. At the typical 30% capacity factor, that's 6% of the projected world electricity demand by the end of the decade. Renewables are simply not substituting for fossils yet, or even keeping up with energy demand increases. And, of course, there is no substitute for oil unless we get a lot more electricity *and* far more EVs in the car market.

The increased cost of emitting carbon will make the economics of CCS more attractive. Renewables simply can't do the job on their own so CCS will mean that fossil fuels remain as part of the mix. If novel technologies like the Allam Cycle, currently under test, turn out to be successful it will be a game changer for fossils.

https://www.naturalgasintel.com/new-incentives-trends-making-carbon-capture-more-attractive-for-utilities-study-finds/

"Demand for fossil fuels worldwide is in decline with the advent of green energy."

Where are you getting that? Oil and gas demand were up last year, as they are every year (source: BP Statistical Review of World Energy 2020). Renewables may be growing strongly from a low base, and supplying the biggest share of energy demand increase, but they are far from keeping up with the overall increase. And they are generally not replacing oil.

'Fraid I know nothing about it, pduk. Maybe others here have some idea. It would certainly have a bearing on my "hitched to the same wagon" hypothesis.

pduk: "why do you feel CIP/Marco will rehash the bond when they in theory can have the entire asset which is worth more and potentially bring it under the C4 Energy banner?"

pduk, as you know I agree with you about the difficult straits the company is in. Any objective observer would have to agree that a company with no revenue, and debts to pay before any possibility of achieving revenue, has got a mountain to climb. Furthermore with the decimated SP, equity investment will not be easy to come by (not, at least, without wiping out current shareholders). That is another thing the optimists here are ignoring -- SOU may survive but their investment may not.

But I do tend to believe Marco has a vested interest in extending the loan beyond next March. It's a while since I checked the details, but I think he's making a million quid a year out of it. By the end of the term he will have made some crazy mark up and still be due his entire principal back. Any of us would be happy to make the returns he is getting. SOU have never missed a payment on the debt. Marco has nothing to lose by extending it while still having a valuable asset as collateral.

Let's look at the alternative where assets have to be handed over. Their value cannot be realised unless they are developed. Sure, Marco might be able to find a buyer so that it becomes someone else's problem, but then SOU could equally well court the same buyer. Realistically, Marco still needs a team in place to develop the assets. Let's not forget he does not just own the debt but is also a major shareholder. (Again, going from memory, he holds about 70m shares unless something has changed).

While I would not trust the guy as far as I could kick him, I think Marco is somewhat hitched to the same wagon as the rest of us. I think he will be incentivised to extend the repayment on the debt.

Herzog, my mistake. I thought you were misspelling SP!

Soundsrich: "reading that rns is like anail in the coffin."

I read that as "like anal in the coffin". Are we accusing the BoD of necrophilia now too? Might not be far wrong! ;-)

"Today's SB now blue, and topped up shares. Storm in a teacup."

Don't know where you're seeing that -- afaics it's down 20%. Not that it really matters, compared to the 60% fall since the June RNS, the 90% that I'm underwater, or the 98% fall since peak hype.

1cagney, if I extraction cost per barrel is $26 then the difference between $45 and $50 oil is more than 25% of our margin. So yes, quite a difference. I take your point that it'll be a fair while before any Barryroe oil hits the market, so any speculation about future prices is fraught, especially in the current economic climate. Nevertheless, someone has to take a punt right now to decide that Barryroe is an investable opportunity.

1cagney, I disagree. If oil was sat at $20 and projected to stay there for years due to massive recession, it would certainly colour the view of any potential partner. Investment decisions are taken on the basis of the projected revenue which has everything to do with the oil price.

Noodle, the 31 Tcf was the high case estimate of gas in place across the whole Tendrara permit. The low case was 9 Tcf which would equate to 4-5 Tcf recoverable, of which SOU would currently own about half. Even those sort of volumes would make SOU a multi-billion dollar company. However, those estimates were all before TE-8, 9 and 10 which failed due to poor reservoir porosity.

Nobody can tell you for certain whether that was due to bad geology, bad management, or just plain bad luck. The only thing for certain is that it has left SOU in a cash-starved situation where developing the existing discovery is now in jeopardy. That requires drilling five horizontal wells and building a pipeline, with the proposed micro-LNG plant as a stepping stone to full development.

At one level, the potential of the wider Tendrara is now irrelevant. There are so many hurdles to rescuing the company and turning it into a cash generator -- a project of several years IF everything goes right -- that these shorter term objectives are the only things worth worrying about.

daveyboy, I agree with your gross numbers but the value to SOU depends on the percentage they retain after any deals that are done. The broker estimate based on the total resource and your estimate based on the revenue stream can be brought into reasonable agreement as long as the same percentage is considered in each case. We get an SP of 8p assuming SOU gives away half its current holding. But yes, we could make 16p in the (perhaps unlikely) event that SOU retains its current share and there is no further significant dilution.

ST, significant swings are most often a feature of thin trading volumes. With more liquidity there are more people trying to find the "right" price level. It's as simple as that.

No superiority here, I'm the biggest mug in the game. I'm also a lot more sanguine than before about unsupported claims such as the SP being "well into double figure" by first gas. You're the one not answering posts about your justification.

ST, it just that you seem to be desperately searching for bias confirmation. You've stated previously that the SP could be "well into double figures" at first gas, and that "everyone I’ve spoken to agrees that double figures are well achievable at first gas". Can you or anyone you've spoken to provide a basis for their estimate? We've had a lot of people on here in the past prematurely counting their fortunes on the basis of faulty reasoning.

Regarding the price swings -- on 22-July you posted that the large price swings were evidence that the share price was not going to fall back significantly. Now you're saying you don't understand large price swings. I get the impression that you have zero experience of share trading despite the moniker. Which is why I think your questions about the SP just reflect wishful thinking.

Sharetrader, why do you keep asking posters what they think the SP might be? Anyone giving you a number that is not based on the value of existing discoveries is plucking a number out of their a$$. You have a broker's valuation from last year valuing it at something like 8p based on certain assumptions which may or may not be accurate when we get to first gas. Anything after that is forward speculation about undiscovered resources.

The oil price is actually remarkably resilient give the catastrophe that may yet befall the economy. If that happens you could see prices halved. For now I'd say things are looking good, and hopefully enough to make the consortium jump in.

Steady on there. Even assuming that some sort of farmout is concluded, the probability of even getting a survey boat launched this year is diminishing. Linn has said it could be H1 2021. Then the clock STARTS ticking on the permitting for appraisal drilling. God knows how long it could all take.