Member Info for Soundingoff

I'm assuming he put the order in prior to taking up the post and therefore bypassed the closed period.

Context is the perfect word trademeup. A premium for appraisal/exploration on top of TE5 is just a few days of dividends for the Majors. It's all about risk vs reward. There's enough potential reward there for them to be very interested.

Interesting to hear contingent payments are still on the agenda. Thanks RR.

trellis- Your first paragraph is incorrect. Those at the AGM will confirm that testing on TE10 only finished yesterday morning.

You are trying to compare an NPV10 calculation with a cup of coffee. Wow.

Trellis- Indeed it would need approval, whether Sound is sold as a going concern or the assets are hived off. Our stated aim has been to sell for some time. Regulatory approval is one of the first ticks on the selling checklist, so I expect anyone who has been in discussion will have been vetted.

Morocco want exploration. With the right partner of course.

I'm afraid some change their view pretty swiftly when needs must ozzie.

This was the right move IMO and was telegraphed at the BB. With hindsight, I felt there was too much enthusiasm by Sound at the BB event, but maybe that's my interpretation.

I'd be shocked if we're not already some way into discussions already. Dealing in these circumstances very rarely starts when announced publicly.

TE10 would have added 50p mid case to our value. The question is how does it affect the targets left on the table and the overall seismic. The gas did flow, but not commercially.

I still see us as a very attractive target. Much of the groundwork has been done and a buyer with cash (or shares) has a licence to explore.

Thanks for the personalised limerick. I think!

Given that it’s been very hard to buy anything decent at times, I can’t agree with a worked sell. It feels worked to allow preferred customers to get the shares they want.

Neither HL or IG will let me buy more than 10k shares. But I can sell what I like within reason at barely any discount.

Cheshire- As KTF has noted, there are significant variables that are unknown right now. One of those is the Palaeozoic. Quite rightly they are keeping quiet until the results of TE10 are known.

If we assume we are sold after a successful TE10, with flow rates meeting expectations and both the structural and stratigraphic targets are validated, then my expectation is that we will receive close to NPV for TE5 and TE10. Purely because of the exploration left on the table. As a ratio, this dwarfs our well know example of Cove Energy.

In your calculations you have assumed a broad value of TCFs from our model. However I'm expecting a much more precise valuation based on our inventory. For example, you cannot value TE2 and TE11 on a similar metric as the TAGI is a better known target.

Finally, as a commercial decision, whatever our final sale price is, it will be a relatively small cost for a Major to invest given the potential upside. Exploration is cheap in Morocco and so is development. The only question mark is the confidence a buyer would have in (as an example) those 12 drillable prospects finding gas and flowing it.

CK- It has been updated due to the following:

Following the latest seismic mapping, modelling and net pay analysis, the Company has now estimated the gas resources discovered by TE-10 across both the structural and stratigraphic trapping geometries.

CK- Info from 18/02 RNS. Once tested, volumes may well increase. Though we obviously need commercial flow first:

The Company announced on 7 January 2019 that the FMI (high definition formation micro-imager log), which provides a micro resistivity image of the well bore at a much finer resolution than the initial logging suite, had potentially identified the presence of additional thin bedded net pay within the previously identified potential gross reservoir interval between a measured depth ("MD") of 1,899m and 2,009m MD.

The Company recently commissioned the independent consultancy ERCE* to undertake a petrophysical analysis** of the gross reservoir interval encountered in TE-10. The analysis integrates a preliminary sample subset of the 57 side wall core samples with the wireline log data, including the FMI data and the high-resolution density logs.

Based on the results of this analysis the Company has made an upward revision of the previously announced net pay estimates, from up to 10.5m to up to 15.4m (a 47% increase), with a mid-case of 13.1m and a low case of 9.5m. This net pay is distributed throughout the 110m gross reservoir interval identified. The objective of the previously announced mechanical stimulation testing programme will be to access this distributed pay.

The Company has recognised the presence of a fracture network in both the FMI data and side wall cores. The potential for a positive impact of this fracture network on the net pay calculation was not included in the scope of the petrophysical analysis undertaken by ERCE but will be considered once the well has been tested.

TE-10 Volume Estimates confirming Multi Tcf Potential

The Company previously confirmed gas shows observed during drilling and calculated that net pay extended below the newly mapped structural closure at approximately 1,943m MD (updated from 1,958m MD communicated on 28 January 2019). These observations suggest that the gas accumulation most likely extends up-dip into the North East Lakbir structural-stratigraphic trap.

Following the latest seismic mapping, modelling and net pay analysis, the Company has now estimated the gas resources discovered by TE-10 across both the structural and stratigraphic trapping geometries.

The North East Lakbir structural-stratigraphic closure has been assessed with a mid-case potential on a gross (100%) basis of 1,430 bcf gas originally in place ("GOIP") with a 3,408 bcf GOIP upside case and a 584 bcf GOIP low case. As is always the case with new discoveries, a further reduction in this range of volume uncertainty will require appraisal drilling. The volume range in the structural closure alone has been assessed with a mid-case potential on a gross (100%) basis of 81 bcf GOIP, 170 bcf GOIP upside case and a 30 bcf GOIP low case. Whilst these structural closure volumes have already been demonstrated by the TE-10 well, a successful well test is always required to confirm reservoir deliverability and comm

Sorry I should have posted AIM rule appears to suggest updates...

AIM rule 11 states updates are required if any liquids/gases are recovered to surface.

That's a stock image of a flare and isn't TE10.

250- So far this appears to be going exactly to plan. Have a listen to the BB recording from 4 minutes in where this explained by Brian

The EIA update is relatively unsurprising, as the whole thing is careful time management IMO. It leaves us open to a number of alternatives.

Ramadan slowed us up last time didn't it ;)

Not to go too far off topic...

I agree the home storage option makes no sense economically for almost all, even if you had the ability to DIY, but it's interesting to see what's achievable.

EVs are going to come in much quicker than many expect IMO, especially as many are going to move over next year with the change to company car rules. This will drive through the used car market as well in a few years. Though I agree for most it doesn't make sense yet. Range will be here in a few years and to be honest the difference between claimed and actual is not really any different from that seen with petrol/diesel. The issue is motorway vs urban use, with the latter being a much more efficient use of the battery. Most EVs are barely depreciating at the moment and used Leaf values have actually appreciating. Battery problems are still an issue for older cars, but more recently degradation appears relatively minimal in comparison. Most people wouldn't dream of driving a car to 200k and that's what many are forecasting as acceptable use.

One way around some of your issues (cost, depreciation, battery) is to hire. There's quite a bit of innovation out there. Have a look at Evezy who are a start up.

https://www.evezy.co.uk

Anyway gas is THE bridge fuel and that's why we're invested.

Indeed I remember testpack. Unfortunately, you clearly pulled your figures out of err thin air, as despite asking repeatedly, you chose to offer no figures to support your 'calculations'. They were wrong then and they're wrong now.

Your main point is more interesting and something I have taken a great deal of interest in over the last year or so. Advances in electric vehicles (EVs) are astonishing- charging, range etc. There are many falsehoods regarding these vehicles too. For instance, the UK electricity network already has the capacity to service the widespread uptake of EVs, despite many arguing it couldn't. There are currently limits to the maximum solar array a domestic residence is allowed to install, but as an example, if I installed a battery system, solar could power my house and all my driving without ever needing access to the grid.

I'll be going electric from next year as the changes to company car benefits will mean like for like motoring costs will plummet. Though I must point out this works for me and my set of circumstances. For many it would not.

Transport may account for 60% of petroleum usage, however much of the transport is not just private vehicles. Therefore the effect is much less pronounced than your basic summary suggests. There's plenty of reading material out there if you're interested.

We also have to look at the change occurring in transport globally. Energy usage for transport purposes (whilst growing still) is rapidly shifting to non-OECD countries, where their ability to transfer to EVs (or HFCs) is much more limited in the short term.

There's lots of data out there on the changes expected, and unsurprisingly they don't support your posting.

Come back in 10 years and things may look very different. But that's why I've invested in gas as a bridge fuel.