Member Info for rossannan

Trek

I have now heard back from PB - he does not hang about!

You seem to have confused SPT and PPT.

PB makes the points that Coho 1 will not reduce SPT payments as it is a gas target and that the costs cannot be deducted against other production (but will however build TXP’s PPT pools, potentially useful down the line).

He also makes the point that natural gas production is not subject to SPT so the only tax Coho 1 will attract is 12.5 percent crown royalty.

Trek

I’m obviously not expecting to hear back from PB until later today at the earliest, even though he is usually surprisingly quick to respond to queries, but I still do not see how your argument, which I must confess I do not follow, establishes that the CAPEX on a gas well like Coho 1 in any way reduces TXP’s SPT burden. It remains my understanding that only the CAPEX on an oil well can be offset against SPT (which as you know is charged on crude oil production, not gas production).

Trek

I did.

Trek

I have copied your post to PB and will let you know what he thinks.

Gizzy87

Though, to be fair, although I have not sold a single share (remember the 67,245 shares that I bought on 26/7 and posted about on here?) it is often better to travel than to arrive so I will give you this at least - I would certainly consider selling in advance of the actual drilling results (although these will of course be in two stages, so I am probably talking about selling on the back of the net pay figure).

TrekMadone

But is the CAPEX on a gas well allowable against SPT? Think about it. There is no SPT on the gross revenue from the gas well (once it eventually appears in 2020), so why would the CAPEX on it be allowable for SPT?

Gizzy87

You could not be further from the truth, but you obviously prefer your narrative.

shellguy

But you should care about the short term stuff, and the stuff around funding in particular, because dilution can have a significant effect on your longer term outcome.

1750mk1

You will need to ask Gizzy87 - he seems to know what I am doing before I do!

zeusfurla

Fair comment by the market, IMO.

Gizzy87

Of course they will need a raise to drill the second well. With all that existing debt they would be mad to let the bank balance plunge below $5M, even if they are no longer obliged to keep it above that figure.

Goodbody

Have you wound it back in yet?

Goodbody

I will take the other side of that bet.

It is important to distinguish between statements CEOs make that are aspirational and ones that are realistic. You need to ask yourself what kind of statements these were.

sugardaddy

Not remotely. No end Q2 cash balance and no production figures at all.

1750mk1

Nevertheless, that latest production update and the accepted delay in monetisation still suggest that the funding for the upcoming oil well will not be organic.

Alchemyex

Is the reality not, as demonstrated by that last production update and to be confirmed by this week’s financials, that TXP is hardly throwing off cash? This is important because it raises the question of funding. We know that the last placing was for the first well only. The aspirational take on funding the second well is that this will happen organically but will that be the reality? It is also worth bearing in mind, while we are being realistic, that the first well, if successful, will not now be monetised until some way in to 2020.

Z2Z2

A matter of weeks = around 7 weeks (at least).

LL208

In fact timing is everything, given that the first Bonasse appraisal well is now not due to spud before the end of September. TXP recently looked like a good ultra short term trade on the spudding of their 95% CoS gas well, but this was delayed and that news ended up dropping at the same time as a (not unexpectedly) disappointing production update. This duly dampened the spud excitement leaving TXP slightly down. I am happy to hold TXP while the drilling excitement builds in the coming weeks, but it could have been a cracking rinse and repeat opportunity if the timing had been slightly different. So with CERP - if LK had been able to stick to the early September spud that he told offerman about, the excitement would already be building for that, perhaps giving him his placing opportunity. Now though it is quite possible (I would say probable) that the interims, with those missing Q2 figures, will precede the spudding of the first Bonasse appraisal well. Awkward. LK should maybe bite the funding bullet now. An easy way to make it more shareholder friendly would be to make it an Open Offer with an excess facility - he must realise that whether he deserves it or not there is huge retail conviction behind him, so why not both reward and take advantage of it?

LL208

The interims are out at the end of September so before then if he knows what’s good for him.