Member Info for SQ320

shakey at the time the company talked about doubling production from Meseda they had in mind 2 development wells (Rabul 3 and 4) and 2 wells to maintain production (Infill producer 1 and 2). Rabul 5 seems to have been a relatively recent addition to their plans. So the results here should definitely help them achieve the doubling production target. My only concern is that in the RNS announcing the Rabul discovery, PW does not mention doubling output, only increasing it.

Aim you may not believe this, but a company's prelims are the same regardless of the source they are taken from whether it is advfn or investegate. It's a legal document. The following was Circle's final opinion on LAM-1. Now you may be ecstatic about it's result, but clearly they were not. Drilling then moved to the Lalla Mimouna block where the first well LAM-1 intersected the objectives close to prognosis and an unexpectedly thick sand sequence at its base. Subsequent test results provided good natural flows to surface, but were not as promising as expected pre-drill in terms of indicated volumes and the well was suspended for further analysis and potential workover/sidetrack.

Aim, you help me??? Lol. Your post of 22:22 has exactly the same quote as mine posted exactly 20 minutes earlier !!

It's the RNS issued on the 29th June 2016.

On that link you've given its the Prelims on the 29th June 2016.

Your info is dated 2015, mine is from 2016. At the end of the day, there is no pipeline from Sebou to Lalla Mimouna and you'd need that if you were producing anything worthwhile.

Aim you are referring to an earlier news release, mine was the latest news on LAM. And not only did that well not go anywhere neither did the ANS well. Overall the only thing that Circle got out of Lalla Mimouna was data: During this drilling campaign, we drilled the first three wells on our Lalla Mimouna exploration permit in Morocco. The first of these wells discovered gas and flowed to surface during a well test. The second and third wells had indications of gas but were not flowed to surface. Although the volume of gas found in these wells is lower than our pre-drill expectations, the wells have provided invaluable data, which is now being integrated into our regional interpretations in order to determine future drilling locations. (from the 2016 prelims)

aim4utopia. Let me fill you in, this is from Circle's June 2016 Prelims: "Drilling then moved to the Lalla Mimouna block where the first well LAM-1 intersected the objectives close to prognosis and an unexpectedly thick sand sequence at its base. Subsequent test results provided good natural flows to surface, but were not as promising as expected pre-drill in terms of indicated volumes and the well was suspended for further analysis and potential workover/sidetrack." https://uk.advfn.com/stock-market/london/circle-oil-COP/share-news/Circle-Oil-PLC-Preliminary-Results-Announcement/71843490 So the initial results seemed to be promising, but that was as far as it went.

Aim4Utopia, was LAM-1 put into production by Circle?

jag here are the catalysts (IMHO) 1. Annual results - cash in the bank and receivables and reserves information. They should have been doing quite well in terms of cash because the Egyptian netbacks should have doubled even though the oil price has not. 2. Lalla Mimouna - good results here would bring project 24 much nearer and might open up the northern part of the block 3. Ibn Yunus should add 9p to the NAV in case of a good result. 4. Yes, the gas price.

daft it seems to me that the company have been smart enough to manage expectations (even if PW did benefit as a result ;) The brokers downgraded their expectations of Egyptian gas to $2.50 earlier this year and that is what their (low) sp targets are based on. So if we get anything above $2.50, even if it is less than $4, we should see a mark-up in broker SP targets.

Aim: "It is the way you write every post with a negative finish. The last was SPIKE. Meaning no actual value just AIM pump and dump." No, It won't be a pump and dump. If they get more than $2.65 it will immediately revise the value of their assets upwards.

Urraca the company's NAV does not care where the assets are located. If the value of the assets in Morocco goes up because they've found more gas and at the same time the company tells its brokers that it's gas in Egypt is going to be worth 30% less then the brokers say we won't move the NAV. As I said, if the company turn around and say that we were being too conservative and it will sell for US$3.50 (or hopefully even more), then we may see a spike in the SP.

Precisely SD is all about volume, but if everything you have now gets you 30% less (not because I say so, but because the company does), then you're going to have to prove up quite a lot more to make up for it.

I've been accused of being bearish on this one, but I am pretty sure I have previously flagged that if the Lalla Mimouna wells come in, that would be much more significant than the one they've just drilled in Morocco. Other parts of the podcast that stand out are Malcy's bafflement about the SP non-movement. I have a theory about this and in light of the recent LTIP some people may add the conspiracy adjective. The GMP broker report and IIRC Edison as well, both have not moved their forecasts in light of some of the well results because they have followed guidance from the company that the gas in SD will not be priced at US$3.50 but rather US$2.50. Now when the actual price is agreed and announced at least there won't be an unpleasant surprise, but if it is more than $2.50 clearly there was a benefit to someone ... of the earlier downgrade.

In the short-term going by Edison's figures (which I know some consider to be conservative), they have a risked figure (32%) of 2.9p for Ibn Yunus. So if it comes in we could be looking at an uptick in the NAV of 9p. Kelvin is down for 2.3p, but risked at 24%, so another 9p there. Of course, the impact should be much more if you then consider the implications for the rest of SD.

Aim how is 1tcf worth $4bn over its lifetime? From what little I know 1tcf would be worth $4bn. Then you account for the working interest (55%), and the tax (40%) and you're left with $1.32bn. And then you have to discount back the future income streams, so likely less than that. Obviously, it's still a nice figure. But while the gas quantities in Egypt look big as a rule of thumb, in comparison to Morocco, I think you have to halve them to account for the lower price, then halve again for the WI and then halve again (roughly) for the tax.

Urraca, It really seems to me that $0.39 is opex. And the drill costs are separate and capex. This is why it is significant that Edison say that to get to project 24, they will need another year's worth of drilling in Morocco. This is why the Edison note that someone linked to below, shows revenue rising, but also capex going up. Yes you are right about depletion. And I think that helps to explain the lack of SP movement in the light of discoveries. The implications of demonstrating connectivity and how we can get to 2-2.5tcf is beyond my paygrade at the moment. Perhaps one of the more bullish posters can explain?

Shakey, that 2.5tcf figure seems to be well beyond what the company are claiming they're going for, isn't it? If something like that comes in, it could take a couple of years off my retirement age. But aren't the company claiming something like 150Bcf in SD? The other problem with Egyptian gas is the tax rate (40%) and they get about half the price of what they do in Morocco. IIRC some of the more conservative broker notes recently are claiming $2.65 for Egyptian gas, so more than that could have an impact on their projections. The company have also made noises about possibly being able to sell to private customers for $7 which would be a real result.

Leapfrog - yes they are very useful indeed. People often only assess them in terms of their headline target price figure, but usually that's the least useful bit of information. My takeaways from this note are: 1. The company will need to keep committing capex (actually it will go up). This is really useful because everyone bangs on about the profit margins and non-existent tax rates in Morocco. There's a good reason for this IMHO, you have to keep drilling, these wells have a short shelf life. In his latest interview PW says that the 2017 campaign has replaced the gas they produced, it may add a little more. 2. Their valuation does not take into account the growth in gas production in Morocco. So everyone here can work out what they expect the production to be and base their investments on that. To be fair to PW he has over the period of some interviews given some detail about time lags involved in getting factories built (in Kinetra), hooking up customers etc. As a non-oily I get the impression that Morocco is a fairly well-drilled province and it's good to see the company being innovative in terms of its efforts to squeeze out as much gas as it can.