Member Info for Scott22

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One little problem. TXP has no money. And no credit at present. And cannot finance anything with equity since the share price is in the toilet. The banks are willing to lend money to some development wells at Cascadura - but only AFTER the pipeline extension to the first
well pad is hooked up and the gas from Casca-1ST and Casca Deep (drilled off the same pad) is flowing into pipeline and generating revenues.

The idea of taking on debt right now to buy properties from Shell is probably the worst idea I have heard. They need cash very badly and they once the gas and the cash are flowing they have very good places to put the cash to work.

Lots of details. Better royalty structure. 4 new wells this year with the new rig. 20 development wells and 40 recompletions in the 10 years. Some water flooding planned. Perhaps most importantly a plan for one exploratory well on Coora block to test the Herrera, deep to the currently producing sands. Work plan sounds very good. Before Ortoire this was the whole TXP story and production from these legacy blocks can probably double, without any consideration of the wildcard of a deeper more prolific Herrera. casgh flow from this asset willl be helpful as they move forward to try to get production started on Ortoire block - and as they ramp Ortoire production with all the development wells that are planned at Cascadura, while simultaneously making plan for Royston (if discovery there) and advancing the next phase 2 of exploration with the three planned explorations wells (steelhead, mosnster Kraken, and Guabine).

He did tell us it would cut drilling time by 20/30 percent. That means more wells. They will drill about 4 wells first on legacy leases to meet drilling obligations there. Unclear whether one or more of those will test deeper sands. Then the likely drill some development wells at Cascadura, maybe a second Coho well (developmental), maybe two up dip wells at Chinook, Maybe (hopefully) some Royston development wells. Finally at some point they will do Steelhead, the mighty Kraken, and Guabine as second stage of exploration. As you can see there is a huge drilling program ahead. Has to be funded. Funding has to come from production starting with Coho, Casca1-ST, and Casca Deep - which are ready to be hooked up.

Good points for sure. But they cannot wait very much longer to accelerate drilling. The Canadian rig is coming in September. That is costing a million just to get it to Trinidad - PLUS there is a commitment to drill 120 days a year for next three years. That means minimum of 150 drilling days by end of 2022. Now in Canada or any other reasonable place you can drill a lot of wells (especially development wells) in 150 drilling days. And they are going to have to pay those charges no matter what. They have to start feeling a sense of urgency to ramp it up. And I for one am totally uncomfortable with any John Wright entity taking on debt. When you owe people money bad things can happen, some of them out of your control.

TXP needs a lot of cash next year (new Canadian rig with 120 day commitment, potential big development program at Cascadura, significant increase in operating expenses), and that will be a problem only because of logistics. We have the product ready to ship (gas at Coho and two Cascadura wells). We have a confirmed buyer with no credit risk (NGC). We cannot get the product to the buyer. We have seen the Ortoire block map for several years highlighting the close proximity of major pipelines. The country of Trinidad has had oil and gas production as a major part of its economy for over 100 years. It is just hard to understand.

It is a bit like a wine producer with thousands of bottles of wine in the warehouse, a Costco sales agreement (not top dollar but secure payment), and no trucks to ship the bottles. Meanwhile they have ongoing cash needs for payroll and other expenses, and they also want to invest to grow production next year. They would struggle mightily.

TXP will also be struggling for cash next year but only because of logistics. As I said we have the product ready to ship (gas at Coho and two Cascadura wells). We have a confirmed buyer with no credit risk (NGC). We cannot get the product to the buyer despite close proximity of major pipelines and by all indications a highly motivated buyer.

Anyway I will open a good bottle of something when we stop this grinding downtrend and start establishing a new uptrend. It will take some kind of catalyst. Big discovery at Royston might be required for reversal. Cruse test won’t help. Hooking up Coho is so anticlimactic at this point that it won’t have any impact. Hooking up Cascadura well will drag on to first half of next year. Development wells at Cascadura will be mid-2022. The next three exploration wells (including the Norwegian monster Kraken) will be late 2022 at best. Hook-up of Royston discovery well (if there is a discovery) and any Royston development wells will probably stretch into early 2023. Any potential to produce from Kraken (if a real monster) will be end of 2023 or later. So lots of exciting potential ahead. And lots of expenses.

They need a wall of cash. Logistics, logistics, logistics.

It is a nothing analysis. Based on no real information.

What we actually need is some progress on some front.
We have three wells ready to hook up and start producing.
Coho should have been producing months ago. We have multiple locations for Cascadura development wells pending an overall plan and some negotiations. We have an important 5th and final exploration well (Royston) ready to spud, targeting the biggest prospect yet. We have a test pending of 20 feet of shallow Cruse at Chinook, not important but also no indication we can get it done. We have a commitment for a few wells that are to be drilled on the western legacy sites - why wait when Oil is over $70 a barrel. Some of this stuff has to happen so we can have the cash for 2022 to drill next three exploration wells, multiple development wells at Cascadura and maybe 2 up dip wells at Chinook and maybe a second Coho well, plus some
drilling on legacy lands in west, including maybe a test or two of deep sands there. For sure we have to do enough of this to pay $1 to get Canadian jackknife rig to Island and then use it 120 days a year for three years. Meanwhile there is NOTHING happening except the roar from the crashing c ollapse of the share price.

Super find for Royal Helium - they had a pseudo-bedrock indicator on seismic and drilled through to find 39 feet of helium/nitrogen. Must have a terrific seal and sounds like they have a resource they will be able to produce. Sounds like a fairly big resource but unclear how big until more testing. May be other areas to be discovered in Canada as well.

Hopefully Helium 1 can confirm a big resource as well - there is room for more than one new source of helium for sure. Meanwhile the next Desert Mountain well #4 in Arizona is not going as swimmingly.

I agree with you totally. But you would agree that we are being tested mightily. I I sort of wish they had not said “wall of cash” quite so many times in the last year and a half. Because so far it is nowhere to to be seen. And they will have a big need for that cash next year.

I sort of wish they had said that they were expecting a wave of cash. Then they could use the metaphor of a tsunami. It is a calm blue sky day with not a hint of a wave in sight. But it building up far away and out of sight - and eventually will arrive with a forceful impact.

Good points, well taken. I do not consider MF as anything wonderful, but they did provide a little contrarian balance when they first started. They were right about Amazon for example at about 10 time points when the consensus was that Amazon was way overvalued. I think they were part of a shift to totally different valuation metrics for some of the fast growing stocks that were riding shifting paradigms (or even creating the shift) and using debt and ever increasing equity to fund their growth and even dominance in their markets.

You may be right. Nothing much to do about that that however. Plus TXP has traded in Toronto for longer than in London - it would be hard to totally control all the MMs into a big conspiracy.

I have the gut feeling (not always accurate) that we are way oversold here and that it would not take much to spark a reversal. Problem is we are not getting much. Nothing happening.

1. Coho hook up or even final plan?
2. Just a plan for Cascadura and a timeline?
3. Royston road, rig, and spud?
4. Date of arrival of Canadian rig.
5. Timeline for development wells on legacy areas to west.
6. Will they drill one or more deeper wells on legacy acres to test deeper sands?
7. Will they acquire addition leases contiguous to some legacy areas to give them better access to tap deeper sands?

I don’t know the answer to any of these questions but any positive developments on these items might spark a reversal.
I am almost positive that a discovery at Royston would be a huge positive but I would rather it be something that adds fuel to an already established uptrend - rather than the item that sparks the reversal.

Anyway, I bought more today. Only thing giving me any pause is my past association with John Wright entities. But I keep telling myself that this is different because there is ZERO debt (hard to go belly up without debt), they have Paul Baay and Xavier Moonan, and the story is just so much more compelling than some of the past Wright deals that went wrong.

This article says that Jubilee is building a new processing plant to process the materials from the Eastern limb. Is that true?

Added 10k, got them a penny cheaper on AIM than in US, even after adding the $100 (penny per share) fee.

I think I have enough (burp!). As for the discussion of Motley Fool, they said that He1 was a stock to buy in June. Last I checked the month of June is not over. Let’s at least not judge that recommendation until the end of the month. Also if you subscribe to MF they have a lot of info available tracking their picks over various time intervals. They are not shy about their misses and do not erase bad picks from their analyses. Overall they have been hugely better than most broker picks.

I am fully there. The initial indications were that Casca Deep would produce at 30-40 million a day and there was no indication that there was any problem with the well bore. Paul clearly implied it was a much better well than Casca 1-ST. Now I am fully aware (since I am there) that there is a lot of additional pay that was not completed or tested and that additional development wells including ones targeting the discoveries at Casca Deep could easily push Cascadura overall production to 200 mmcf/day.

But the actual production from the Casca Deep Well is less than expected, less than either of the zones tested at Casca1-ST, less than the one zone they will produce at Casca 1-ST (can’t produce both because of size of pipe). Plus the well bore at Casca Deep was injured by drilling and they “are confident” it will clean up and produce at 22-24 mmcf/day. All that is much less than I expected from the initial reports about that “work class” well. I believe it is a wounded world class well that did add some info to what was learned at Casca 1-ST (remember the two wells are 900 feet apart and drilled from same pad). But the final report was a little discouraging. Maybe there was a little relief bump up because it wasn’t as bad as Chinook, but that bump was not back to where it had been pre-Chinook results, and it was not sustained. Really it is hard to argue that the final Casca Deep results were not below expectations from the preliminary results and discussion thereof.

The bridge repair chatter on Canada board was about a bridge to CHINOOK site which could delay testing of Cruse there, a non important item. There is nothing wrong with any bridge on the road to Royston site, which would be the only drilling delay I would be concerned about. There we are waiting on soul stabilization materials and preparing the rig.

The delay hooking up Coho to production is getting ridiculous. The delay getting Casca1-ST and Casca Deep on production are equally bad and maybe worse because we won’t even have a plan for putting in surface facilities until the entire Casca development plan is submitted (maybe September) and then negotiated (gig knows how long that will take).

Meanwhile I am still buying. With some trepidation.

The idea of discounting the results from Cascadura Deep well has been mentioned many times but is not correct.

Why didn't Cascadura Deep final results get huge positive response? Mainly because they had already gotten credit for even more than it proved to be in the end. They talked about over 1000 feet of pay, world class discovery, best well yet. So that was all baked in.

Then we learned that production from the tested zone will be less than either tested zone at cascadura1-ST well. And also that the well bore was injured, but they are "confident" it will clean up and produce at tested rate. Why should mostly negative stuff warrant a jump compared to what we thought we already knew.

5X in three months.

I love DM but this most recent piece was pretty promotional. He is right to be excited about getting to the point of drilling the the wells.

But I don't like mentioning a 5 times share price increase in 5 months. The company executes the plan, the market determines the share price. And there are a lot of complex factors that play into that, not all of which are controllable by the company.

I also do not think this 3 minute blurb about start of drilling was the exact place to talk again about a globally significant resource playing important role in helium market for the next 100 years. Let's wait and see on that. I guess the comment about having a tiger by the tail if they strike helium in quantity would have been good enough.

He did say they cannot put the helium in there ground if it is not there.

Interesting - are you aware of any other instances where institutional investors have asked companies to move from quarter reports to every six month reporting? I have not heard that before. I guess "timely, predictable, and transparent" can be provided on different time tables as long as that is communicated clearly. But the idea that the reason to report less frequently is so the institutions have a better chance to pick up shares at lower price if the company is doing well (which they know because they have access to information that private investors do not have) - all seems pretty much against the "timely, predictable, and transparent philosophy that I prefer and that good companies try to follow. Maybe a little AIM-like, but not necessarily that good.

true enough for me too, though some are actually chugging upwards

Why don't they start reporting financials in a more standard fashion of quarterly reports. Financial reporting that is timely, predictable, and transparent is very important. Most companies that do well in the marketplace have that as one component.

Of course delivering the positive results to report is the most critical. But is a company is running on all cylinders and growing revenues and profits and also improving its situation in its own market - then making the financial reporting a real strength does not seem that difficult.