Member Info for rossannan

PhotographerLTP

I don’t think anyone is expecting a lifestyle/keep the lights on type of placing. Those of us who think that a placing is more likely than not by EOY would argue that we are simply being realistic about how capital intensive this business is.

faz7474

Didn’t have the sense to open one after the Q2 update, I’m afraid, which is a shame because the share price went from over 5p to under 4p once it was fully digested.

offerman

Thought it was just me and faz playing that game - you have good taste! Saw them live in Miami back in the day.

offerman

Nothing else matters.

tidd83

I try to make the point on ADVFN only when it is relevant to the discussion, though admittedly it is relevant to pretty much any discussion of TXP! I suspect that the majority over there have got this one wrong - as you say, we are looking at a 15 well campaign with 2 big (US$4million each) Ortoire drills next year, so a raise seems likely to be necessary and, I would argue, is more likely this year than next year. When have I said that such a raise would be a negative? I would argue that getting it done sooner (say on the back of 2000bopd) rather than later would make a lot of sense, particularly when later could mean leaving it until it is too obviously necessary (which the market would no doubt punish).

For the avoidance of doubt, I will post these arguments and any others that occur to me as and when I see fit.

2fatcatz

When I referred to the 2018 workovers I meant of course the post 14th March 2018 workovers. My basic argument (across a number of BBs is that everything is declining all the time, including, after initial stabilisation, new wells and recompletions, and that BB production arithmetic never seems to completely take this into account so that people’s production estimates are almost always too high (and they are therefore almost always surprised by fundraises). This is why I think a TXP 2018 placing is more likely than not. Not inevitable, but PB would otherwise be risking a cash crunch, IMO. Maybe he will take his chances and, if he gets away with it, it will be a bonanza for TXP, but it will be like doing acrobatics without a safety net!

2fatcatz

You have to test that model against the reality on the ground.

A good starting point is 14th March this year, after the first of this year’s wells had come online. At that point we had field estimated production of 1,705 bopd (based on the previous seven-day average). You then strip out that first 2018 well, which had not long come online at 56 bopd, to give a starting point of 1,649 bopd.

We then jump to the end of this month when, on the back of presumably having all eight of his 2018 wells online, PB is expecting at least 2,000 bopd, an increase of at least 351 bopd.

What will the declines have been in the intervening period (14th March to 30th September) at 1% per month? I calculate these as 120 bopd. So basically PB is expecting the eight 2018 wells to be contributing at least 471 bopd, which is near enough your 60 bopd per well.

So that all seems fine, until we remember about all the 2018 workovers (up to and including recompletions). They also contributed towards matching declines. So where are those barrels? Or is PB’s figure of 1% per month an underestimate?

2fatcatz

The problem with that argument is how much of the new production coming online is replacement production rather than incremental production - it is that which makes a raise more likely than not. The usual workovers, up to and including recompletions, are not, according to the most recent figures, matching declines without help from new drilling and if you look at the production graph in the recent presentation (Slide 13) you can see how in the case of the 2017 wells, declines are really beginning to kick in.

2fatcatz I think the real clincher for me was PB confirming that the two Ortoire drills planned for 2019 will cost a total of US$8million. Add in the cost of the additional 2018 drills and many the other drills planned for 2019 and, on EOY 2018 production of 2100bopd, the bottom line cash position looks too tight for a raise this year not to be the most likely outcome - operating cash flow can be a misleading metric. Also, with Ortoire kicking off in Q2 2019, sooner rather than later seems sensible - do it when you can, not when the market can see that you have to.

tidd83

Yes, that 2000bopd+ RNS could drop as early as the week after next. After that there will, I suspect, be news of some kind of raise (most likely a placing but ideally a pro rata offer), timed to make the best of that production milestone.

cockernhoe

No. Work through the list of investments on the website, taking recent RNSs into account. It’s a mixed bag but there is enough good stuff in there to more than support the current sp.

LGO-fan

What I’m flogging is that the cash is running out but the CAPEX requirement is not diminishing. Something has to give. It‘s just maths.

optimist13

It is AIM oiler smoke and mirrors that has generated talk like that. Take Portland:

Highest observed hourly rate equivalent to an implied daily rate of 352 barrels of oil per day...

Maximum instantaneous half-hourly pumped rates of 441 and 470 bopd...

The reality though?:

sustainable 24/7 rates of between 140-160 bopd...

but it’s okay because further measures can be taken to realise Portland’s full potential...

Classic AIM oiler smoke and mirrors.

UKOG really looks like one where it is better to travel than to arrive. HH is hopefully planning to sell UKOG under the radar into strength. If it turns out that he has a different plan, I will sell GUN.

CaptainSwag

Not much longer now, I suspect.

optimist13

The problem with the pro side of the UKOG argument is that it ignores the huge amounts of CAPEX that are required for further progress. Many current UKOG investors are simply betting on the pump and hoping to get out before the dump.

optimist13

Many no doubt would but the reality is that UKOG is more of a bet on the behaviour of other investors than anything to do with fundamental value.

optimist13

My point is that we want to be able to sell our UKOG at the optimal time. UKOG is massively overvalued by all sensible measures and at some point, perhaps sooner rather than later, the market will wake up to that. We will want to be long gone by then.

Good point, I hadn’t noticed that.

optimist13

When will it be replaced by UKOG shares? Timing is everything.

SlowRoll

It is suspended.