Member Info for RagstoRich

Ah I've only been looking at the Annual Reports.

So the key issue with the field going forward is the gas issue - GKP are already flaring gas I assume (with a temporary allowance to do so from MNR), the gas re-injection was always a long shot in fractured carbonate, and the SH-9 well looks to have killed that option further. So I'd be keen to hear others views on what the solution is now - obviously sweetening the gas and selling is on the table, but what is the local market? The 5.5 years for the new gas managementplan is beginning to make sense - major infrastructure is needed I assume? A small power station built?

Thanks for the clarity. I was asking because the cost oil makes up a huge proportion of the field revenue. The graph in the old ERCE CPR shows this quite clearly.

A good upside should prices get back up to a substancial number and the KRG start paying back revenue at full tilt. But I thought the company would be highlighting this outstanding cost pool far more than they are (as I said no mention at all in the 2019 annual report)!

Hi Folks,

I noticed in the 2018 results (and also on the GKP website) there is a stated $500MM outstanding petroleum costs pool.

I'm surprised this isn't mentioned in 2019? Am I missing something or is this $500MM that GKP can claim costs on going forward? Are the KRG not paying our full entitlement of cost oil?

$10 oil in 2 years? I think that's very unlikely.

The industry has changed due to the pandemic, the biggest thing that's happend is the huge change in the shale industry. People are aware that oil will be reaching peak soon, therefore the whole focus of the industry has changed to projects which pay back money quickly, are easy and fast to develop. Shale requires tonnes of constant capital injection, and is very very slow to pay back if you want to keep production running (in fact in a lot of cases it ultimatley doesnt pay back). Shale is now dead, OPEC have already shown that they are now ready to take back control on pricing, Saudi voluntarily cutting an additional 1MMBOE a day to keep prices going in the right direction.

When the pandemic is over, people will go back to the office, travel abroad and do everything they use to. This will take oil demand very quickly back to where it was. The difference is, the shale oil will not come back on stream like it did. I am very bullish about oil. Yes it will be replaced over the long run, but demand reduction does not mean that prices will remain low, its much more xomplex than that.

Gas re-injection is out the window due to the complex crest of the structure post SH-9.

The 5.5 years they are earmarking for the new gas management plan (sweetening and exporting the gas) is far too long, this is what they should look at trying to reduce.

Bradford - totally agree. The gas management plan going forward will be key to achieving some sort of "decent" value from the field. The current plan (which is earmarked to take 5 years +) seems extremely slow. There is a huge amount of oil here waiting to be produced but GKP are held back because of the gas issues.

I wonder if they could farm down a % and try and find a company which could help invest what's needed here to get production up. There is only so long things can tick over for without some more serious CAPEX injection into this project.

The orignal plan was gas reinjection, however the results of the SH-9 well showed that the crest of the structure is more complex than they thought, so injection wont really work if you cant figure out where you are injecting the gas back into the structure.

The lack of any gas reinjection wont make a huge difference, you'll have gas released from the oil as pressure drops anyway, so even if there was never a primary gas cap there is likely a secondary cap formed / forming already which will expand and aid oil production. This is actually a far more efficient way of producing than via aquifer drive.

The reason re-injection was preferred is it is far easier to do than a) sweeten the gas and process then b) find a buyer, c) get it to that buyer and maintain a steady production of gas. It makes things far more complicated which is why we now see an increase in both the gas management implementation time and the cost of the plan. Gas here has high H2S and CO2 so it needs quite a bit done before it can be sold on.

I don’t agree, XOM would be in exactly the same position. Cairn is owned mostly by American shareholders, some of the largest in the world and U.S. they will have been using the US and UK gov to put pressure on India.

The problem is that the Indian tax regime is completely disconnected from the Indian gov....

You missed the cash, the Senegal deal includes back costs for all of 2020, I think it’s $600million in total?

They decided to destroy the economy years ago, modi etc all had the chance to end these tax cases but didn’t.

I highly doubt the Indian gov will pay out, which is why the rise isn’t 80-100% today. I do think a likely option is for cairn to sell on the award to a third party for a few hundred million £ and cash in sooner rather than later, it’s a buyers market out there and cairn could clean up with cash in the bank

The dividend will be given on the current number of shares, you own, the consolidation is then applied so that the share price should (in theory), remain the same pre and post dividend. The company market cap will fall by the amount of the dividend but the share price should remain stable because there are less shares in circulation

https://www.energyvoice.com/oilandgas/42682/cairn-energy-sells-off-mariner-stake-as-part-of-north-sea-asset-switch/

http://far.live.irmau.com/irm/PDF/2409_0/Samo1wellunsuccessful Thank goodness, and good on the technical team at Cairn for not going for this....

Snow Leopard was always doomed to failure, anyone who works in the industry would tell you it was one hell of a risky well (I'm still not 100% sure what they were targeting).

Wild Horse on the other hand is the interesting well... I've no idea why they didnt forget about Snow Leopard and just go straight to WH......

Dont think that rumour has any truth, operatorship goes to Woodside at development. So Cairn don't have that to sell on. We shall see though. I'd rather Cairn held on to Senegal until the field went through development and sold it on for a chunky price! They can afford to do so with their new production.

To see how this reacts tomorrow morning. Looks like they have run out of shares! Not sure why there has been a release from the company with only a ~40% rise (if that). Look at GATE - a 1000% rise and still going (no idea what is going on there and I am staying clear)

Is £2 per share, then I'm cashing in. Whether this is reached over the next few days/weeks or months I ain't budging! Any news and this will go into orbit!

a £7.5k + 8.5k buy for me, opportunity here?

More volume than the whole of Friday already..... Very excited about this one, great concept behind the company and so little shares in float that mad rises are possible on tiny volume. Same goes for the downside though I suppose..... But confident this will come good. AUCT state they are looking to complete a takeover within a year..... the type of time scale I like.... Any good news and this will multi-bag. Problem will be knowing when to sell.

Managed to get a good chunk of £3.5k shares for 71.5p.