Member Info for ps200306

Battle: "I suppose when you think about it, Barryroe is the only gas field that is available at the moment to replace the Corrib field."

I think that's over-egging it. Corrib will probably turn out to contain something under 5 years of total Irish gas consumption. I'm basing that on 1) guesstimating maybe 45% of consumption averaged over ten years, with long tails at the start and end, 2) a Gas Networks Ireland graph showing a trajectory of something under 200 bcf of annual demand, which would correspond with 5 years worth of Corrib's 1 tcf.

The independently audited estimate of Barryroe gas is 207 bcf (35 mboe), or one year of Irish consumption. Not to be sniffed at but it's not going to set the world on fire (figuratively or literally).

The point (which I have made before) is that according to the best and only information we have so far, 97% of the value of Barryroe is oil. Notwithstanding that Linn and co. may go prospecting for more gas with a new appraisal well, wishful thinking about a greener, more politically acceptable, natural gas bonanza will not make it real.

It intrigues me why anyone thinks one would make this stuff up. What would I have to hide? Lot of cloak and dagger people around today :-)

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

Utilityone1: "I have to say i cannot believe a word you post."

Your incredulity could be connected to your illiteracy / innumeracy. Get the sums right first.

nyforever, absolutely -- nobody to blame but myself. Lesson learned. I have an overall average of 17p, so not impossible to recover some fraction. Good luck with Echo ... fortunately I never fell for that particular hype.

GRH, I don't generally contact random people on the internet. I've nothing to say that I'm not happy to discuss right here in the open.

Sorry to spoil the enthusiasm but I wasn't all that impressed by the Q&A. The right sort of words were said, but we've heard it before. It had the air of a couple of football managers forced to give the mandatory post-match interview and doing their best to look serious while not saying anything of much import. From here on in I'm only interested in actions, and it will be a long day before we see any of those. 18 months if we're lucky to get the LNG up and running before revenue starts to flow, and then another year before we start to see any exploration well results? That could take us to four years after we decided to "monetise the assets" post TE-10. I'm confident the assets are there but whether SOU retains a decent percentage and gets to see a pay day is a lot less certain. I do know my half million shares at an average of 80p will always be a car crash ... the other 3.5 million at 8p has a slim chance of faring better, given lots of time.

AJED, I hold my Providence shares on Euronext Dublin with Saxobank UK as broker. No problem seeing up to date Euronext prices in Saxo's platform, or even just on Yahoo Finance.

Agree with all that Delboi. The upside potential is enormous. Can't quite bring myself to believe it's going to happen with the oil price struggling to stay above break even and a global recession threatening. Fingers and toes are crossed though.

I don't disagree with the figures. But a 10x valuation increase per bbl does not necessarily translate into 10x share price with all the dilution coming down the track. The latest raise increased shares issued from 657m to 835m. If/when warrants are exercised it will increase further to 1,191m. And 40% retention for PVR could be optimistic, given someone else has to put up all the money and keep PVR afloat. Hope springs eternal, though.

If you're talking about the warrants they have a year to decide to buy or not. They get them at 3p no matter when they buy. So they'd be mad to buy now rather than waiting to see what happens.

I'd happily be a Green if only they had sane policies. We'd need to get rid of coal and peat burning. We have a great wind resource which needs to be backed up by bucket loads of gas powered generation. Shutting down gas exploration and LNG terminals is insane. The massive build out of solar that they went is even more insane. Solar in the British Isles has got a ten per cent capacity factor and will be near zero output for days or weeks on end. It's a pity there is no actual Green alternative to this bunch of self-righteous eco-zealots.

LW, I have never subscribed to that con job stuff, though I do think APEC were dodgy opportunists. It is a historical fact that the oil majors slash capital expenditure during an oil slump. And yes, there are price spikes as a result when things pick up. Maybe SpotOn's consortium is different. Maybe it's a bunch of service companies with idle capacity, deep pockets, and a multi-year time horizon. I'll believe it when I see it as it's not the way things have traditionally worked. And as FrQ says, the Greens are another looming obstacle. Will anyone invest if that bunch of loons holds the government to ransom?

For once I agree with ranger4. Nobody is going to commit money to this project until there is a clear end to the economic slump in sight. WTI hit $13 this morning. In inflation adjust terms that may just be its lowest price *ever* ... or at least as far back as records go to the 1860s. Brent is at $27, the supposed break even price for Barryroe. Why would anyone invest money in a project that was going to return zero if everything went perfectly to plan? In the worst case the slump could last years. In the best case it will surely last longer than October, when PVR is supposed to conclude its discussion with SpotOn.

Thanks Jar09, Ducati2 and Exploration.

testpack3, good post, agree with all that. I've been trying to figure out the cost of the micro-LNG facility and am wondering if anyone else can check my amateur calculations. Taking the lower end of the estimate in the video of 10 Mmcf/day of output, if something akin to the GSA price was achieved it would be worth $30m/year gross. LNG output is typically measured in gallon/day or tons per year (tpy or tpa). The necessary conversions are 1 tpa = 2 gal/day and 1 gal = 82 scf. If you google "how much does micro lng plant cost", among others you will find this:

http://gasprocessingnews.com/features/201910/driving-the-viability-of-micro-lng-projects.aspx

... and this:

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/10/LNG-Plant-Cost-Reduction-2014%E2%80%9318-NG137.pdf

Both date from 2018/2019 and they are US- and UK-centric respectively. From the first we see that "generally speaking, in the US, a competitive target installed price of a micro-scale facility is less than $500/gal of daily LNG production capacity." The second gives between $600 and $2000/tpa for the cost of the liquefaction plant. That is $300 to $500/gal/day.

So we take our 10 Mmcf/day and it converts to 120,000 gal/day. And we see that the capital cost of the plant is about $60m. That eats up all of the first two years revenue. (Actually it doesn't matter whether we pick 10 or 15 Mmcf/day as the capital cost scales accordingly -- it's two years of revenue regardless). Seems pretty pricey. At the end of two years there's a lot of free cashflow. But it may temper people's idea of when SOU will turn a profit. On the other hand, there's room in the cost range to get it down closer to one year of revenue. Will be interesting to see what SOU's own projections are.

I may have all this entirely wrong. DYOR and all comments welcome.

Do you think they *deliberately* made it look like they asked their granny to design their website?

LW >>> 'If APEC were, as you imply, con-men, then what have they actually gained from the whole exercise of pretending to be entering into a contract with PVR?'

It didn't work out for APEC. But it did seems as if they were trying some underhand way of getting a million dollars paid to themselves, perhaps to circumvent Chinese government restrictions. Who knows. It didn't work out for them as their backers didn't come up with the cash. For all we know it was never more than an extreme long shot, if even that.

The same applies to SpotOn. It is not necessarily a con job, but it is at the very least devious to suggest PVR are in negotiations for a farm out when the entity they are dealing with has nothing like the funds that would be needed to make this happen. PVR are talking to a middle man who MIGHT have some connections that MIGHT lead to a farmout. The middle man will make an absolute ton of money if it works out as they will potentially own over 5% of PVR independent of any slice taken by the ultimate farminee. Why wouldn't they have a go? The risk to them is very small.

But we have no idea if they have the remotest chance of finding a real backer. One thing we do know is that they face extreme headwinds. The OPEC+ cuts are only a fraction of the decrease in oil demand caused by Covid-19. Prices will contain to face downward pressure. Oil majors are slashing their capital spending left, right and centre. Until we hear something concrete about a real backer you'd have to be nuts to think this has much chance.

Linn sounded as confident as you would expect. His job is to get shareholders enthused. I see we are back to an "oil, or oil and gas" play. No longer pretending or implying that Barryroe could be a gas field. He also mentioned that the reservoir is unlikely to flow for long under a natural pressure drive, and will need water injection. On the plus side, I think Linn misspoke when he mentioned 350 mboe "in place". That is the assessed recoverable resource. However, the plan to drill only two appraisal wells must be a worry: it's a lot of eggs in two baskets. He did mention a possible third well in case of going for early production. Good to see he has his thinking cap on about early monetisation. That could pay for further development and keep initial costs down -- which might prevent PVR from having to give away most of the farm in the initial deal.

It's great that we are in talks, but we are talking to an entity with no money of its own. That is not a farmout, nor even a discussion about a farmout. It is effectively outsourcing the search for a farmout to SpotOn Energy who are a mere facilitator. The idea that Equinor or some such is hovering in the background pulling the strings is farfetched.

LW >>> "They said no-one would be interested in farming into Barryroe. Someone is. Too good to be true?"

We're a long way from a farm-in yet. We are in a lengthy discussion with an entity who we know does not have the money to farm in. They will have to raise it. Two previous suitors have stepped up to that plate. Each of them failed. We are in an unprecedentedly bad environment for oil -- economy on a downturn, oil demand curtailed, prices in the basement, negative political and popular sentiment. The very definition of a proven reserve is one that can be extracted with existing technology AND is economically viable. So far we have a contingent resource that has not even been appraised. Somebody somewhere will be taking a cold hard look at the risks involved -- someone who has to fork out tens of millions of their own cash proving up the reserve just to get to the starting point. I want to believe it will happen. But I'm not naive enough to believe it's any sort of slam dunk. Anyway, all will be revealed presently. Any with the cajones can take a punt on what could be a fifty-bagger from here. I've got all I want for now.

BullsEye10 >>> "Then it's a day light robbery. How could PI's cant able to participate and thrown out to bin. Can't PIs challenge this? Im really concerned with the current state of affairs as I will have significant hit with this move."

The significant hit happened with all PVR's previous disasters. The chickens are coming home to roost. But yes, you can challenge it by voting against the new issue at the EGM. But you will lose because, as annoying as it is, this is actually your BEST option as otherwise your shares are completely worthless. Yes, shareholders are taking a one third dilution for a paltry $3m and this will increase to a 50% dilution if the warrants are exercised. The alternative is annihilation.

The people who make the big money will always be the big boys who jump in last. With warrants, SpotOn Energy can get 5% of the company for just a couple of million quid. That could eventually turn into 5% of $20 bn worth of oil. Us private investors will get the scraps if we're lucky. But scraps are better than oblivion.

>>> "Can someone let me know how we can stop this never ending off subject discussion."

You can't. We've got a Grade A moron who loves the sound of his own voice and has decided to squat here. From bitter experience there is nothing you can do except suck it up and never respond to the troll or do anything to encourage him. I'll go first by ignoring the predictable response to this post.