Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Interesting interview, but main thing that caught my attention was his comment on DTU. His view is that DTU has gone from high risk to lower risk category as it’s very close to commercialisation.
D14mond, fair point to raise as I assume you're worried about admin costs from a cashflow perspective. So looking at 2016/17 FY results the admin costs included �300k of non-cash charges and �700k of drilling related cost (which we don't have to worry about for now), so a more accurate admin cost for the full year would be around �2.4m. As for HY ending Sept 17, that once again included �340k of non-cash charges as well as �400k costs share issue. Which leaves you with �1.5m that will certainly include some drilling related costs, but weren't identified separately in HY report. Company has already stated they are reducing costs further and by the absence of Cully on their website it looks like they aren't waiting round either. So from a cash perspective I see our admin costs around the �2-2.5m per year which is very reasonable considering the cashflow they are starting to generate. So for me absolutely no worries about funds. On a side note, you did mention 17p quite a lot and recently changed to 14p for entry price, which would be a mcap of �16m (roughly double what I expect our current cash balance to be). Is it purely based on charting, or is it a fair valuation of the company at this time in your opinion? As for your comment about selling and volume - it's been that way for months and not sure why it would suddenly dive down to 14p, but you never know. I have my suspicions, but not going to speculate on BB about it. If I'm correct, we should see the end of that in the next 2-3 months.
I can't view it or even buy the report: "The FCA�s Financial Promotions Act prevents retail investors from viewing professional comment and is only available to elected professionals."
Still very early days, but updated my ED cashflow model to get an idea of potential income from WD for first 3 years of production. Assuming similar model as ED with 8 wells per pad drilled simultaneously over a six month period and oil prices the same. Using CPR decline curves I looked at 3 scenarios for retained interest - 10%, 15% and 20%. Using these assumptions it gives an AVERAGE income over first 3 years of: 10% - $1.2m 15% - $1.9m 20% - $2.5m I then re-ran the same calcs using ED performance to date extrapolated using CPR decline curves as first two wells have been performing much better that CPR report estimated: 10% - $1.6m 15% - $2.5m 20% - $3.3m Might not be within everyone's timeframes, but shows the tremendous potential of the company and that's without Helios or DTU. Would be nice to get updated CPR report on Colorado projects in the next few months.
Totally agree Barn, not always easy separating company performance from SP performance but very important if you want to be rewarded.
Should be able to get a lot more than 7.5% on West Denver 48. Hopefully around the 15-20% risk free would be good. And plan is to drill next year.
Wow!!! Nit hanging round. West Denver with possible 48 wells. What a nice surprise for a Monday morning!
D14mond I didn’t forget, but you might want to check your calculations. For starters your Dec figure of 34,709 is gas produced, not BOE - but then you state Mar & Apr figures in BOE. Agree with your Apr figure of 14,492 which is BOE. Add to that 17,710 oil for Apr and total BOE production is 32,202 for the month.
You might want to give complete picture by including gas as well since gas production increases as oil production decreases. So the number for Dec was 47,150BOEPD and Apr was 32,202BOEPD - 68% of December production.
JBG, not sure who’s paying you and how much but they are over-paying! “These are facts, not misleading ramps or deramps. ” Those are not facts, but misleading deramp. If you were interested in facts you would have looked at actual production rates over last 6 months for both our wells and calculated the decline rate. Unfortunately that doesn’t fit in with your narrative. You really are terrible at this.
There’s nothing more tiring in life than arguing with an idiot... I’ll leave you all to have fun, I’m off to bed.
Don’t bother Joyc, he does this on various boards. Just look at his posting history - doesn’t post anything positive on any share. Considering all the practice he’s getting it’s amazing how awful he’s at it. At least some others have some finesse.
Been doing some research on this and by the looks of it we’re trying to use a solution to another problem for our benefit. Apparently there’s quite a lot of low quality natural gas reserves in the US - gas with high nitrogen levels. So they’ve developed a cheap process for removing the nitrogen so that they can use the natural gas. So looks like you just need to find gas with high nitrogen content and then you have an almost endless supply of nitrogen that appears to require very little processing. http://iacx.com/nitrogen-rejection/ From what I’ve read you can also remove small amounts of helium, so wonder if they decided on this approach as a result of what’s happening at Helios?
Seems like a solid business model to me... if only we could find some way of paying for it all until step 6 kicks in... Joking aside, this is what you call building a business. Some might not like the pace, but can't deny the BOD are building a solid business in a responsible way.
CPR report states data from 20+ wells, but main point is they are trying to remove barriers to entry. With 4 patents in place, higher oil prices and hopefully a big reduction in costs this year could see an acceleration in trial deployments.
Apologies, thought the second deployment was also on 2 wells, but looked again and it's only 1. So that's 3 wells to date and 17 to go.
D14mond, thanks for reminding me to review CPR report again - very interesting reading indeed. Not sure where you get "Missed the last 2 years expectations already" from? Target for 2017 was 6 which they missed and 2018 is 9. Or are you already declaring they missed 2018 target? And you're right, commercialisation can take up to 8 years, but just for completeness the statement in CPR was: "The DT Ultravert technology is currently in the field evaluation or pilot well phase and if successful will enter into product commercialization. The field trial phase typically lasts six to 36 months while a sanctioned commercialization phase could last one to 8+ years." You should probably also add that report highlighted two major issues at the time (Jan 2017) - lack of intellectual property enforcement and low oil price environment. Report was very concerned about low oil price and even reduced potential market size due to this. Oil was $54 when report was written and dropped further to $43 after that and only got back above $54 in Nov 2017. Which might also explain why they missed 2017 target. Agree that we need about 20 wells to to fully demonstrate it, but as 4 has been done it's only 16 remaining. That's about �2.3m if we pay 50% and not �4m you stated. And if this nitrogen plan comes off it will be a lot less. Final note on CPR - it's NPV estimate of $78-135m for next 10 years could be very conservative if oil prices remain high and we can produce low cost nitrogen. Still won't happen overnight, but bigger picture is starting to unfold.
City, I’ve been wondering the same for a while and that’s why I’ve put DTU 3rd in my list of priorities for now and will be happy if surprised. Not expecting much this year from it. I’m not a DTU expert, but have experience in mining which has some similarities with O&G. From what I’ve researched they are just as slow as mining companies in taking up new technology no matter what the potential benefit. Who’s going to risk multi-million dollar assets on relatively unproven technology? I have to agree with Diamond that a lot more demonstrations are needed before this will be accepted by the industry, but when it is there will be a very high uptake of it. My opinion on the “tipping point” statement is that Highlands believe the recent court ruling will accelerate uptake or at least provide more companies willing to be a test study.
Simple reason is MM are doing what they are paid to do - create a market. Obviously not much buying pressure, so dropping SP to create activity. At some point dropping it will stop having desired result and they’ll start pushing it up to create market until that stalls... then start process again. All this is on next to nothing volume. Be a bit more worried if it happened with some serious volume- at least 5m a day for a few down days in a row, which hasn’t happened. So not worried despite my paper losses breaking through the £30k mark today as in my opinion nothing has changed apart from the SP with this company. Doesn’t mean I like what the SP is doing, but trying to separate company performance from SP performance.
I asked the question if he’s still there. The response I got was that they couldn’t comment on any individual, but that under old ED deal they would have needed additional staff. With the new ED deal they would need less staff. Importantly for me they didn’t deny he was leaving. I’m very happy that they are this serious about keeping costs down, but obviously only an assumption that Cully has left. With such a small team it was always likely to be a key staff member leaving if they reduced numbers.