Updated Tennyson Report Key points15 Dec 2023 00:59
The Tennyson report is on beacon energy website, fact its posted every time like a update and talks about all these key points is very positive. They take balanced view, give all the good and bad points.
Stating Sand jetting will be done to increase production, uncertainty if it will be 100bopd, 300bopd, 500bopd extra, all this will be payback and commercially viable, then talking about investor nerves and weak share price, but long term investors like my self its a good opportunity in Tennysons opinion.
1) Stabilised level of around 40 bopd. This is far below the unrestricted potential of the well (calculated using known reservoir and fluid characteristics) of 900 bopd, and illustrates the fact that heavy drilling mud is still restricting the flow.
2) The well does continue to clean up, and Beacon is hopeful that the mud is slowly recovered and the well builds to full potential, however a sand jetting operation is arranged for late January in order boost near term production.
3) The uncertainty in our minds will be whether the immediate response is an additional 100 bopd, 300 bopd, or 500 bopd. With operations costing under €500k, the payback under each scenario makes the operation commercially viable. Even-so, at today’s unstimulated rate of 40 bopd the field is commercial on an ongoing basis, with revenues exceeding field operating costs. To date over 1,600 bbls of oil has been produced and continues to grow on a daily basis.
4) Beacon shares have been weak over the past few weeks as investors nerves around the clean-up set in. While these operational delays and challenges are frustrating, some investors have been detracted from the fact that the company has a 100% stake in a >7 mmbbls discovery onshore Germany.
5) Company is comfortably funded to raise production from the Schwarzbach well and to organically build cash flow to continue developing the field. This, in our opinion presents an opportunistic buying opportunity for longer sighted investors.