Member Info for Quitie

With the uplift due in the next couple days and the AGM next week, I think these prices are a steal. Good news on the back of either of these and it could fly

Some tasty buys today!

Got the uplift due in the next few days (was estimated 27th). A (positive) business update to go with it is exactly what this needs

Apologies if it appeared to be a bit or the likes, never was my intention. Yes it be not be a pressing issue now, with the Nigerians looking to loosen off the regulations and red tape, it would certainly pave the way for it to be looked at more seriously.

I've a feeling HH and ADME won't want to be a minority player in any partnership for too long so expect moves to be made sharpish.. Good point below on how our board is getting too big for the current size of company we have (HH still has the right to appoint somebody else) - I really can see this fly.

Hopefully a business update to go with the lifting update (cargo delivery estimated for 27th) would be timed just perfectly prior to the AGM. Exciting couple weeks ahead indeed!

While £250m is a huge amount of money, it is certainly at the lower end of significant on the grand scheme of things in oil and gas.

When OO got announced, it said he'd already raised approximately this amount of money ($300m) for the first phase of development alone - further development was always going to require further investment.

As HH was quoted before, he will leverage contacts both in industry and in finance to both buy into, and progress developments. I can see him buying out partners if they are holding up cracking on with the project. Will be far cheaper to buy them out early than wait until plans are in place

Pretty sure when HH came in he said funding is not longer an issue. If partners don't want to cough up then he'll just buy them out, again what is very common in the industry..

The low production is due to it being an early production system, this was never designed to be producing 50k barrels just yet. Exactly the same idea with Hurricane Energy in the UK - early production system before a full field development

Very standard way of doing business in the oil industry.

Loans can be configured to suit - if MX Oil had wanted more cashflow, they'd had extended the loan period and kept more for themselves. They were obviously happy with the format they settled on, it would only have been another 6 month and they'd be keeping the uplift profits for themselves anyways.

No projects on this size, even with significant producers, get paid upfront with cash, via placement or otherwise. This will require tens of millions at least

This will be funded by significant bank loans, with the collateral or similar being the production / license etc itself. Bear on mind we're a small partner in this. As with the current development, it'll be paid up front then will be paid back as we produce oil

This report is purely on the Aje field itself, and in particular the reservoirs which are already in production. It states "while any oil production forecast from these two wells beyond 1 January 2022 is dependent on Turonian gas development commencing production when the condensate stream will help support the costs of the oil FPSO"

The Turonian reservoir has already been classified as 'Justified for Development'.

All other potential leads on the block aren't captured as part of the report, as it's a report on the Aje field not the block itself. Further appraisal of the block would be required, and would be a no-brainer once further development on Aje itself has commenced.

You see with the illustration the scale and potential of this field - it has the potential to be a monster.

It also states the appraisal wells flowed at high rates - these aren't currently producing due to them being more condensate, opposed to crude oil which we can process and offload with the Front Puffin FPSO. The condensate would require more significant processing infrastructure.

Would love to hear the plans on further development soon

Maybe should have said 'trying to manipulate' haha. Not to worry anyways, long term for me. I like the quote from the Upstream article.. He knows cash is in abundance for future developments!

Looks like somebody is trying to manipulate the SP with selling individual shares at a time - bit of a joke how much it's managed to drop off the back of it

Got the uplift and hopefully a business update between now and then also!

The amount it moves on such tiny volumes goes to show how tightly these are being held. People know this is as good as a sure-fire winner as you'll find for the medium term

Plans to introduce royalties and taxes for the first time on deep-water exploration — a proposal that has faced stiff opposition from oil companies including Exxon, Royal Dutch Shell Plc, Chevron Corp., Total SA and Eni SpA, the state’s joint-venture partners.
Ensuring that the state derives more benefit from oil and gas contracts.
Addressing the root causes of violence in the oil-rich Niger River delta that has plagued the industry for more than two decades.
Even with all the reins now in his hands, some analysts still doubt there’ll be rapid progress, given Buhari’s inclination for state intervention rather than market reforms. When the economy was beset by falling revenue in 2016, the government imposed capital controls, banned certain imports and refused a currency devaluation amid a foreign-currency shortage.

“I don’t think the government is interested in any reform, judging by history,” said Robert Omotunde, an analyst at Lagos-based Afrinvest West Africa Ltd.

Foreign portfolio investors fled in the face of the interventionist measures, and only began to return when the central bank set up a market-determined trading window for exporters and importers. Confidence remains low. The Nigerian Stock Exchange Main-Board Index has declined 10% since the first trading day after Buhari’s re-election.

To arrive at a new law that satisfies the energy companies will take delicate negotiations in the coming months, given lawsuits filed by the government against joint-venture partners that accused them of taking more than their fair share of crude revenue.

Still, a more compliant legislature gives Buhari the muscle he needs to push his reform agenda through.

“It is more likely they will pass now more than ever because of the mutual suspicion with the leadership of the last National Assembly,” said Bismarck Rewane, chief executive officer of Lagos-based advisory Financial Derivatives Co. “When you remove that, it is more likely to be passed now.”

https://www.energyvoice.com/oilandgas/africa/203655/oil-giants-note-nigeria-now-has-chance-to-open-its-fields/

Really good article here detailing the Nigerian's Governments plans to open up oil exploration to significantly boost development and production.

This is away to be the perfect time to be operating in Africa with a company / backer with such deep pockets. Plenty of the article worth quoting, but here's the whole lot:

Investors’ 11-year wait for the Nigerian government to open up Africa’s biggest crude industry may be over.

An overhaul of oil policy that’s been in the works for more than a decade is among a raft of laws President Muhammadu Buhari could steer through parliament in his second term to help drive investment in the oil-dependent economy. The delays cost an estimated $15 billion a year in lost funding for the industry over the past decade, according to the Petroleum Ministry.

The ability to implement reforms would mark a departure from Buhari’s first four years in office, when he faced hostile leaders of both chambers of the legislature. Since his re-election in February, Buhari loyalists have taken over as the heads of the Senate and the House of Representatives.

“Expect an improved level of harmony between the National Assembly and the president going forward,” said Luke Ofojebe, an analyst at Lagos-based Vetiva Capital Ltd.

The urgency to get the oil reforms going was signaled by a July 4 meeting between the new Senate president, Ahmed Lawan, and head of Exxon Mobil Corp.’s Nigerian unit, Paul McGrath, where they discussed the quick passage of the bill.

“I promise Nigerians, as soon as we inaugurate our committee, they’ll start work on the Petroleum Industry Bill,” Lawan told reporters afterward. “This time around, we will work with every stakeholder in the industry.”

The reforms are needed to drive investment in oil exploration and production that have been withheld because of policy uncertainty. As a result, Nigeria’s crude output and reserves have stagnated over the past two decades, and targets to reach reserves of 40 billion barrels and output of 4 million barrels a day have been pushed back more than 15 years.

Unless new investment comes in, the government may have to cut spending and could struggle to service existing debt. The state relies on oil for two-thirds of government revenue and has failed to meet its income targets in the past three years mainly due to lower-than-expected crude volumes.

The reforms being considered include:

An intention to sell part of the state’s controlling stakes in joint ventures. Another initiative being considered is the conversion of the partnerships into incorporated entities, which would enable them to raise funding from financial markets.

Between OO bringing deepwater technologies from Norway, and YO having previously worked for Schlumberger, it’s great to know they guys are also have and engineering and technical background, opposed to just boring businessmen at board level with numbers and the likes. It’s abundantly clear in the industry that any management that has no experience of what’s actually going on at the coalface are destined to fail. This on the other hand it all very promising.

The more good acreage we have in the same area the better. Makes large scale developments / tiebacks economical, and likely call for onshore development also for the produced gas

Might be a naff shout, but sure it wouldn’t hurt messaging the company (ADME) to query this, given its directly beside us, it would be a valid point to raise

Quoting my post from last week below..
We currently produce around 3k per day from AJE, with us getting 5% = 150 bpd.
With EER's stake (another 15% approx), this would rise to 600 bpd, which would equate to approx $40k per day based on oil prices of $65 per barrel.

Now imagine the full development gets sanctioned and we have the 20% stake.. Based on Yinka's (a major partner in the field), production forecast of 50 to 80k bpd, and assuming $65 per barrel, we could net between $650k and $1.04mill per day, every single day the field is producing. Based on a development of this size and location etc, I would estimate lift costs around $20 per barrel, meaning around 2/3 of the production is pure profit.

Now yes this is obviously longer term (although I'd say medium opposed to long, further development planning is well underway), but this is the potential from a single producing asset / development. That only multiplies the more assets we get involved with.

This isn't on the optimistic side - once the ball gets rolling with this the sky is the limit. While I may be biased being in the oil industry itself, it'll be of high demand for years to come, more than enough time for this to become a billion dollar company and then some!

"And on Yinka Folawio Group website (the operator), they claim the full field development will produce between 50 and 80k barrels per day (early production system currently averages 3k per day - these are put in place to generate revenue prior to the full field development taking place)

https://yinkafolawiyogroup.com/upstream/facts-and-figures-28 "