We would love to hear your thoughts about our site and services, please take our survey here.
BEY.LON still there as far as I can see. Also see BEY.L on Yahoo Finance.
https://www.londonstockexchange.com/news-article/BEY/half-year-report/15652534
"But it seems Ireland thought it was going to get about €2billion from the levy on oil companies..."
Under the EU's marginal pricing scheme for electricity, the price paid to wind energy providers is the highest bid at any given time and is set by the price of gas. They're the ones that should be paying a windfall tax. Will we see Ryan scapegoat them as much as the fossil fuel companies?
STD123: "This tax issue is a blow however it's not cast in stone yet. There is still an appeals process where it may be reduced or go away but worse case is it will have to be paid. Will the company have to do a raise?"
'Tis but a scratch! You do realise the tax bill is equal to SOU's entire market cap? Quite uncanny how you pop up out of nowhere with such bromides literally every time the SOU boat is rocked. You haven't commented on SOU since July 13th, when you said:
STD123: "Fishysaurus you enquired how the tax bill has shrunk to 2mill. That's an easy answer it's just like buying a carpet in Morocco. You go in the shop and he is asking 13 mill for it and then you barter him down to 2 mill."
WL: "If I was in charge of that major/farm in partner I'd be thinking a large contribution to Sound's bill could get the deal done and would be small change in the grand scheme of things once Tendrara's billions are unlocked."
I'd be thinking a large contribution to SOU's bill would net me some of those billions for myself. As of today the tax bill is bigger than SOU's entire market cap. Hopefully they won't have to pay it until revenue starts flowing. If they have to be bailed out, whoever does it will drive the hardest bargain they can.
Btw, I presume the tax bill is in Moroccan dirhams (MAD). Graham calculates it's about 10% less in dollars due to exchange rate fluctuations. That doesn't help SOU, though, because GBP has fallen about the same amount as MAD vs. USD. On the up side, iirc, the gas is priced in USD so a net benefit to SOU should rates stay similar.
Ditto mebo2. That's what I've been wondering about for a long time.
ktf: "Morocco needs the gas, they're not going to shoot the golden goose."
The gas *IS* the golden goose. SOU is just its current minder. The ruling seems pretty grotesque but it is what it is. It seems a whole lot less likely now that SOU can wangle their way out of it. It's basically the worst case scenario.
Obviously it's completely manageable if SOU can spread the payments out AND defer the first one to 2025. That's the first year that SOU's net income turns positive according to the SP Angel valuation, assuming all other things go according to plan.
Not sure what Curran can do other than commence legal proceedings against the government. Ryan is being dragged kicking and screaming toward allowing limited gas storage under the government's tight control, but no LNG imports. The chances of him voluntarily signing off on licences for Inishkea or Barryroe are less than zero, as he is implacably opposed to them. He will just state that they are incompatible with Ireland's climate change targets (like he did for the LNG terminal).
I'd be happy to see a *legal* approach. Explorers are entitled to progress existing licenses. Ryan can't run DECC as his personal fiefdom, deciding what to grant at his personal ideological whim. Somebody needs to remind him of that, and quick.
Don't buy on my account! I'm just a know-nothing internet randomer and I'm still pretty negative. Based on the 0.1p SP downgrade due to the recent tax announcement, you could be looking at another 1p if the full tax bill gets upheld. Wouldn't be holding my breath on the near-term exploration either. I do hope they drill SBK-1 first. It's a small accumulation but looks like the best shot at adding some value and they could do with some good news rather than another duster. Only 0.3p unrisked value per share value on the current research note, though. If you see 7.5p total per share in the next 24-30 months I think it would be a good result.
Yeah Fr.Q, I also thought the Boldy love-fest in the Phoenix was something of an enigma.
Interesting valuation update. Value of the core assets has been downgraded due to the tax bill and depreciation of GBP vs USD, but upgraded due to a higher forecast Brent price, leaving the value pretty much the same. Also interesting to see them forecast that SOU can give away 25% equity in TE-5 in return for the remaining Phase 2 funding requirement, and still keep the same valuation due to lower risk. That's somewhat reassuring for those looking out for further dilution.
Also interesting to see new valuations for the exploration element, premised on a 30% farm down of interest in return for 100% carry on three wells. I would call these pretty speculative (as indeed does SP Angel) based on the recent drilling track record. Only SBK-1 with its smaller accumulations looks like a solid bet having previously flowed gas, while TE-4 looks like a much longer shot (having previously failed) and Anoual is a wildcat and Sidi also a relative unknown. Nevertheless it's still interesting to have these, and if you let your imagination run wild on the *unrisked* numbers ... well it's enough to drive this board back to the ramptastic speculations of former years ;-)
I will spell it out for you one last time. There will be no further response to your childishness.
Providence have applied for a Lease Undertaking on Barryroe. The find is classified as 2C resources according to Providence's own commissioned assessment. Both of those things tell you that the find is not yet declared commercial.
Lease undertaking issued under Section 10 (1) of the 1960 Act. (https://assets.gov.ie/77790/49e9b28a-60a8-4556-af30-f91699e3b2f2.pdf):
"When a discovery is made in a licensed area and the licensee is NOT in a position to declare the discovery COMMERCIAL during the period of the licence, but expects to be able to do so in the foreseeable future, the licensee may apply for a Lease Undertaking. This is an undertaking by the Minister, subject to certain conditions, to grant a Petroleum Lease at a stated future date. The holder of a Lease Undertaking is required to hold a Petroleum Prospecting Licence which will govern activities under the Lease Undertaking."
"A lease undertaking is a ministerial commitment to grant a petroleum lease at a future date on an oil or gas discovery that has NOT yet been declared as a COMMERCIAL find". (https://www.irishtimes.com/business/energy-and-resources/providence-presses-government-on-urgency-of-key-barryroe-lease-1.4793995)
Definition of 2C (i.e. Contingent) resources from the Petroleum Resources Classification Framework of the internationally adopted SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS) (http://info.specommunications.org/rs/833-LLT-087/images/PRMgmtSystem_V1.01%20Nov%2027.pdf).
Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, by the application of development project(s) NOT currently considered to be COMMERCIAL owing to one or more contingencies.
"Please quote from the item exactly what Providence said that I misinterpreted."
It's the first sentence. Then go back and read my post of Monday 14:31 where I explained it to you. You're welcome.
Manyana, I don't engage with your childish outbursts which are very unbecoming for an 80 year old. I do, however, like to correct your regular gaffs and factual errors lest you actually lead people astray. Now, I can tell you had difficulty getting past the BIG LETTERS at the top of that article. Those are the headline, which wasn't written by Providence. You should try to get as far as the first sentence where it tells you what Providence actually said.
Providence said that the well drilled on Barryroe had a *commercial flow rate*. That just means that if you developed the field and got those sorts of flow rates per well (extrapolated for horizontal producer wells) that it would be commercial. It's different from declaring the field commercial, which requires demonstrating that there *are* connected volumes of hydrocarbons that can be exploited using available technologies at a profit. It's more than a semantic distinction, as the important industry definitions of contingent and proven resources depends on it.
Policy Statement on Petroleum Exploration and Production in Ireland:
https://www.gov.ie/en/publication/3bcaf-policy-statement-on-petroleum-exploration-and-production-in-ireland/
No change for existing authorisations, except to make the government look increasingly hostile to any new activities. Petroleum Infrastructure Programme being wound down.
Sorry for being the perennial pessimist but I wasn't especially impressed with this. It's going to be all about the dilution. In the previous RNS SOU were pursuing "potential vendor financing, secondary subordinated debt and partial asset disposal options" for the remainder of the financing. Now it's down to one option -- a farm out. It's good that they claim to have parties interested in both the Phase 2 residual financing and the appraisal/exploration plays. But since SOU has no money they will need a 100% carry so could end up giving 25% of their holding away (25% of 75%, since the amount to be raised is approx. 25% of the Phase 2 costs). Also, like JoeCreed, being in a farm out process at this late stage of proceedings doesn't feel particularly comfortable. Nevertheless, it's all progress.
It's a slightly weird article, saying the pipeline "will transport up to 5,400 billion cubic meters of gas to Morocco annually, representing almost half of Morocco’s gas imports in 2017."
5,400 bcm is 200 tcf, which is nearly twice global annual consumption. That's clearly wrong, so maybe the comma in 5,400 means 5.400 which is common in Europe. That means we're talking about 200 bcf, but that's still five times Morocco's annual imports. But then again, why would anyone build the longest pipeline in the world to transport just half of Morocco's 40 bcf needs. That would be the equivalent of just TE-5's Phase 2 output.
Hard hitting article in the IT today about Ryan's head-in-the-sand attitude to LNG, Barryroe, and Europa:
https://www.irishtimes.com/business/2022/08/05/caveat-hydrocarbons-may-eventually-kill-us-but-the-economy-could-die-first/
"The Minister for the Environment doesn’t want to say yes to fresh permits or leases that might allow existing licensees to make progress on their exploration blocs – if they start pumping oil or gas out of the ground it would embarrass the Green Party leader politically. But he is loath to say no, lest it causes a big scene and the companies turn to a third party, such as a judge, to make their case. Instead, Ryan simply ignores them, dragging out their requests in an extravagant show of can-kicking, deep into the road ahead."
"Providence Resources, which is soon to change its name to Barryroe and whose largest shareholder is Larry Goodman, has been waiting for 16 months for a lease from the Government for an appraisal well that is essential if it is to bring the estimated 300 million barrels of oil at its Barryroe prospect to the surface of the Celtic Sea bed."
"Meanwhile, Europa Oil & Gas last week received a patronising brush-off from the State, as it waits impatiently for an extension to the first phase of a 15-year exploration licence for an area adjacent to the Corrib gasfield off Ireland’ west coast."
...
"Ryan may flinch at the political discomfort of being seen to facilitate pumping oil from the Celtic Sea or gas from off the west coast. But that is vanity. Producing hydrocarbons at home is infinitely better than buying them from the imperialist Vladimir Putin or the regime of Mohammed bin Salman in Saudi Arabia ... How can that acknowledgment of reality be squared with Ryan’s indulgent foot-dragging on Providence and Europa? His approach helps to leave Ireland vulnerable to external price shocks and security of supply issues."