Member Info for Soundingoff

There's a reason why almost 1 in 5 FTSE 100 companies are run by accountants and over half of CEOs have a finance background. It's not about the numbers, it's about coming up with a strategy to move the business forward.

I was waiting for that... We'll see.

A real life sale example is Cove Energy, where many did not believe the story unfolding:

- The share was manipulated by the MMs the whole time. They needed to stimulate the market.
- 4 months before being put up for sale, the SP was 60p at one point, with 24p of cash. So the asset was 'worth' 36p
- There were many broker ratings stating 120p-170p, but this had no effect on the SP
- 3 months before the sale, the SP was 70p at one point
- Just before the company was put up for sale the SP was 80p
- Then IIs started piling in, with massive buying
- The SP was 110p even though the other shareholders in the field valued it at 170p
- They had connectivity all over the field
- Everyone argued about production vs exploration
- The sale took a few months and with some counter offers, 240p was the end result.

From what I've read it was based on 15TCF proven plus 15TCF on seismic, although there was potential for more at the time. But there isn't a huge amount of information out there, as it was mainly kept internal (sound familiar?). So when you factor in the difference in shareholdings, it's 2.5TCF +2.5TCF. Each drill there is 10 times more expensive as it's offshore, and there is also the fiscal differences in terms of gas price, taxation and royalties.

When you take into account all of the variables it looks very favourable for us.

are interested in farming in to the Sidi Moktar license in Morocco.

I'm sure I remember you agreeing with me back on Oct '17 that we wouldn't be drilling until Summer '18 ;)

I also go back to TE8. It was a step too far, but how far? We have TE5/6/7 as a basis for development. I would assume that the extension of that area would be derisked further after recent seismic and analysis.

JP's previous advice is to take proven reserves/drills at 90% of NPV which of course makes a big difference to those calculations. If proven reserves are a relatively small amount vs potential then I can understand the logic in getting close to full value for these proven amounts.

2TCF would, to some degree imply that 'only' one of the three drills were successful as well. Though TE9, if successful would be a mix of proven and derisked via analogous structures.

I would also expect the Lakhbir High of .4TCF GOIP to have a higher derisked %, along with other areas that already have historic drills such as TE2.

We also do not know the true palaeozoic potential yet either.

Lots to consider.

I really don't like the SP movements here. They feel manipulated and I don't think that bothers anyone other than us PIs...

At some point investments need to give back.

Very funny tag-teaming. No one is fooled ;)

Agreed Ozzie. As Brian has said, the Major's want significant assets...

However it does show the potential we have, especially as we are yet to fully understand the Palaeozoic (at least externally).

You would need to do a considerable amount of work to make a comparison between the figures. You need to look at oil/gas prices being received, a proportion of the reserves are offshore, and then you need to take into account taxation etc. Quite a task to make a meaningful comparsion.

I've done a few comparisons in the past with real life deals and they confirm our external advice of £1.50 per recoverable TCF on an NPV10 basis at $8 per scuff.

Thanks Fred, I didn't realise they didn't take the shares.

fred- Sister took part in the end.

75% seismic complete.

https://twitter.com/soundenergyplc?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

PNE- We simply don't know do we? We're also still using the 1%/3%/5% trapped hydrocarbons as well.

I think Sound are keeping very tight lipped about the basin and who can blame them. Everyone's a loser if it's over estimated.

Mid case is 20 TCF now ;) I'd love to know their current internal thinking on the Palaeozoic as well, rather than the old safe multiplier.

Agreed davey. It's all getting very interesting.

The event is still 'details to follow' so... ;)