RE: SP20 Oct 2018 15:57
Afternoon all.
As the SP went a little backwards yesterday, instead of trying to understand the market mechanics I thought I would revise why I believed Angus to b the right place to invest my hard earnt.
First of all, I looked at the overall pic of the Co assets to assess what's been happening and where.
In principle and ignoring Holmwood, we have 3 going concerns, 2 of which are already licenced to produce, those being Lidsey and Brockham which I understand have a combined rate of 212bopd.
Some have or still exhibit concern about funding for the future but seem to forget the implication of cleared eanings already flowing into the coffers, and as a rule of thumb, PV has stated for every 100bbls some £1.2m is generated.
Without trying to confuse, we hold a 50% interest in Lidsey and a whopping 65% of Brockham so I think it's safe to say we are receiving some £1.3 - £1.4m p.a.
Although with it's 25% of Balcombe, not only is there a very good chance these numbers will be exceeded then as they have already slugged at 3000bopd, given with the correct sized tubing, this well should contribute a good 1000bopd for our 25% making a total of 1200bopd or an annual income of £13.2m and if one looks at the P/E on say 15 we arrive at a perspective M/C in the region of £ 198m or 6 times that of today's.
Both Lidsey and Balcombe along with Horse Hill show connectivity to the Kimmeridge and the odds are that Brockham will also become part of this giant play unfolding before our very eyes.
One must not forget that lessons already have been learnt and with the perforation about to take place at Brockham, I wonder just how big the tubing will be as we know, 2"s at Balcombe was not enough to cope with the volumes that appear capable of flowing.
Should Brockham achieve a flow rate, then using the figs above we can happily say for every 1000bopd that flows, 650bopd is ours or put another way, for every 2000bopd produced, in round figures, it's going to equal what Lidsey and Balcombe are capable of doing with the emphasis this is still early days.
One could easily drive themselves mad trying to work out different combinations obviously with a bias to create as much wealth as possible, but there is still one factor that hasn't been brought into the equation which is that there are only 51% of shares that are available to peeps like you and me and with only 382m in issue this means that only a tad under 195m were up for grabs and if the shares fall into sticky hands that are prepared to hold on, then traders etc will have less of a chance of upsetting the apple cart.
There is a consensus that II's are not yet involved but there is a feeling that they are closely following as events unfold and their appearance will undoubtedly will have a major influence on the SP for it follows that if one tries to get on board, others will follow, and all will be chasing the minimal shares available to them.
Finally, wait until the majors come knocking which may be sooner t
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