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Bowley: there was some fairly drastic interpretations getting made around the "environment activists" posting on facebook about what is frankly an everyday occurrence - opposition to new oil and gas developments. People were suggesting a potential major setback had occurred, etc etc, which to me was not a reasonable conclusion to arrive at based on the facts as presented.
I'm suspicious of anyone who makes daily postings arriving at extreme conclusions (10 bagger by Christmas ! / Major setback with Permitting! / Everyone else is drilling like crazy ! etc etc) repeating the same points over and over again as the most logical point to conclude is they are trying to influence the share price.
https://www.wsj.com/articles/shanghai-lays-out-covid-19-reopening-plan-as-china-cancels-2023-soccer-tournament-11652619639?mod=hp_listb_pos1
Partial re-opening of businesses in Shanghai from tomorrow (Monday) according to the Wall Street Journal
Maybe the Chinese will grow tired of the King-Canute-trying-to-stop-the-tide routine and wise up:
https://economictimes.indiatimes.com/news/international/world-news/chinese-social-media-abuzz-with-rumours-of-xi-jinping-stepping-down-for-covid-19-mismanagement/articleshow/91560750.cms
master82: We will be waiting on the surface equipment being fabricated then shipped in any event. The land certificate issue could get dealt with in parallel with that. There is no reason to believe the land certificate issue will not get dealt with the in same method as the land use issue, e.g. any problems and some discussion with the central government can sort the problem out in the worst case.
Regarding the surface equipment, I would guess (obviously I can't know but would suspect) that they have ordered the surface equipment from Chinese suppliers due to proximity and cost, if this is the case that bodes well for delivery times as China is reputed for doing things fast and economically (to be diplomatic about it).
I'm also optimistic that the designs for the tank(s), pump and generator are standard design (see below photo showing duplicate equipment designs across wells), which should further reduce delivery times.
https://news.mn/wp-content/archive1/english/photo/2013/4/643d260c00cd8633/4bd515b3ff8c085big.jpg
It would not surprise me if the delivery period for the aforementioned items is measured in weeks rather than months if ordered from Chinese suppliers, it looks like some of the items could even be "off-the-shelf" or available for rent
https://www.alibaba.com/product-detail/High-efficiency-rocking-machine-donkey-pump_244222975.html?spm=a2700.pc_countrysearch.main07.187.43b85e63CCMAm7
I have personally not written off 2022 for MATD for getting Heron-1 online as equipment delivery times could well be much lower than expected for Western O&G projects,
All in my humble opinion / do your own research
curiousandcuriouser: there is people opposed to oil and gas development everywhere there are oil and gas projects. I would not get sucked into worrying about it excessively.
We see it ourselves in the UK (Extinction Rebellion, Greens/SNP administration in Scotland, etc etc)... Fortunately when the financial imperitive becomes overwhelming the decision makers with budget responsibility (i.e. Central government) always tend to come down on the pragmatic side, e.g. that oil and gas is absolutely essential to our current way of life during the transition period, and high prices benefit no-one.
Think of the Shell Cambo field,... 12 months ago treated like the ugly sister at the dance, now a different story that energy prices have spiked and the government is practically begging O&G companies to up production.
I cannot see why Mongolia would be any different, the government have too much invested in their O&G industry for progress not to be made (refinery being built, pipeline contract awarded etc etc)
AIMHO/DYOR
mbarnholdt:
https://atradius.co.uk/article/risk-map.html
Posted by Mount Teide a couple of weeks back somewhere else...
Too much blah blah blah on this board, not enough reasoned debate about MATD.
Rampers
Derampers
Embittered crybabies
We have them all. A few genuine investors as well
master82: bringing on any new oil and gas project is a multi-year activity (in my experience), this has not been helped recently with COVID. I'm seeing a similar thing with Touchstone Exploration just now and it's Coho field. When these junior oilers are reliant on 3rd party companies and governments delays and setbacks seem to be almost a given.
I keep seeing people posting about other companies drilling, but I haven't seen any validation of comparison beyond that - the Elixir drill depth looks to be approx ~560m and 760m according to the RNSs, would such a drilling rig be appropriate for PetroMatad , who drilled Heron-1 to 2960m?
Manro: Why don't you sell up if you don't believe in the MATD investment case? Genuine question. I can see that at one point you had in believe in MATD as a share (going back several years) so why hang around if you are convinced you're on to a loser?
Dasha from MT, care to elaborate?
Bowley: On the subject of scheduling and future works, I took the opportunity to write to PetroMatad over the weekend and asked if they had considered looking at Russian or Ukrainian land rigs.
A recent Rystad Energy white paper titled “ONSHORE DRILLING – WHERE IS DEMAND HEADED” shows much lower rig utilization rates for Europe and Russia compared to Asia with the onset of the conflict in Ukraine.
For 2022 European and Russian land rig utilization rates will be ~43% comparing to Asian utilization rates of 75%. This gulf gets even wider next year (2023) with utilization rates in Asia remaining at about 73% with Russian and European land rig utilization rates dropping to about 28%.
The aforementioned white paper stated specifically that Ukraine land rig demand would drop by about 90% due to the conflict.
Therefore it would seem if ongoing issues arise with local drilling contractors potentially there could be benefits to Petro Matad to consider looking further afield, if this could be done without causing any problems with sanctions etc.
Possibly even some of the European / Russia rigs would be winterised also and may (possibly) not need to shut down during the winter season - if anybody has any spare time it would be worth suggesting this to PetroMatad as something to investigate (if you had nothing better to do with your time, like me, haha!).
Bowley. I understand the frustration about PM not committing to dates is frustrating for investors, however, the excuse for that is fairly watertight (shutdown of block 19 export facilities due to border closures with China, and closure of chinese border preventing drilling rig operations). PM has zero control over these issues.
I have seen the opposite happen, where the CEO promises the earth and then loses all credibility when self-imposed deadlines aren't met, due to issues outside of the companies control. (See situation with Touchstone Exploration just now with its Coho field - CEO was making statements like 'online in 60 days' after the discovery in 2019, it has now been close to 3 years since discovery and it is still not online, due to waiting on a 3rd party to build them a pipeline. Every 2-3 months the guy comes out with another "Just around the corner" statement - fairly laughable).
For me I'd rather have somebody credible who (in these circumstances only) does not make commitments to timelines, than make promises which is complete baloney. To do otherwise would only invite criticism when the deadline wasn't met.
However, under normal circumstances, I am in 100% agreement that scheduling information should be provided by the company, but I feel under the current circumstances this is not applicable.
The workover/stimulation of Heron-1 could still sneak in this year, the drilling season doesn't close until mid-November in Mongolia (as stated by Mike Buck in a previous presentation) and its a few weeks operation to get Heron-1 ready to go. That would leave just over 6 months to get the job done... A lot can happen in 6 months with a co-operative central government. The surface equipment is on order also,
Regardless if production comes on this year or next year I'm happy to be patient, as all signals point to an increasing oil price (or "supply crisis" according to some analysts).
AIMHO/DYOR
"THE DISTORTIONS OF CHEAP ENERGY" Natural Resource Market Commentary by Goehring & Rozencwajg predicts OPEC+ spare capacity will have run out by the end of the year.
-----
"The Oil Crisis Unfolding in Slow Motion
...Assuming Iranian volumes come back, Iraq boosts production and no other countries suffer unexpected outages (all very generous assumptions), we still estimate that OPEC+ spare capacity only amounts to 2.8 m b/d. Based upon our models, all of this capacity will be needed by the end of this year... The truth is no one knows what will happen when we run out of spare pumping capacity potentially this year. During the two oil crises of the 1970s, OPEC maintained significant spare capacity. Even when prices ran to $145 in 2008, OPEC’s spare pumping capability was substantial. Never in the history of world oil markets have we been in this situation--- we are about to enter unchartered territory...
We have argued for years that negative rhetoric and anemic spending would bring about an energy crisis, and we think that is now upon us."
-----
Thanks to Mount Teide who pasted the link originally on another site.
https://info.gorozen.com/2021-q4-market-commentary-the-distortions-of-cheap-energy
https://progressive-research.com/research/operational-update-2/
Mainly a repeat of the Operational Update RNS, however makes a couple of statements about scheduling that were not made in the RNS:
" This will leave the well ready to produce once export restrictions are lifted. " This is stated twice, and is a fairly big statement to make!!... and I 100% hope this is correct.
And it hints about another possible issue:
"This will leave Petro Matad in a position where it can, hopefully, secure the necessary land certificates in Blocks XX and V." This was touched on in the RNS and MATD have already said they will escalate to central government if problems arise...
However, it fails to mention the possible DQE partnership, which I feel is a big oversight, as a binding agreement to accelerate Heron development would (one would expect) certainly add a few % points onto the SP...
curiousandcuriouser: It reads to me like the directive issued means they do not need to wait for the law to change,
...The Cabinet of the Mongolian Government issued a resolution directing the certification of exploration and exploitation licences by the central Land Agency such that local approvals on land use are not required. We are advised by industry regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), that this will allow work on all Production Sharing Contracts (PSCs) areas to progress without land access delays
To me that reads like the biggest obstacle to getting Heron-1 online has been removed, there is the obvious problems with covid outwith of PMs control but that will get resolved in a month or two (I bet). PM will need that time to get the surface production equipment in location anyway.
AIMHO/DYOR
curiousandcuriouser: I have to give myself a pat on the back for this one, I read the situation bang-on and told everyone on the board :-
- PetroMatad having problems with local protestors/permit office/council
- PM Lobbying to central government to change the law to redress problems with current legislation.
Regarding the availability (or lack thereof) of land rigs, I hope that MB is looking at alternatives, in particular the situation in Russia and Ukraine should make land rigs available from those two areas... It sounds like Heron-1 for workover activities is not affected by the Chinese covid lockdowns, which is reassurring.
Master: You may be letting your nerves read a negative into the situation, keep in mind there was a lot of stuff on the table in terms of the DQE deal: geo-technical input, drilling, stimulation, and completion services, production operations and oil export. . also potential payment (or partial payment in oil). No doubt block V would need to be discussed a well... such a deal would take time to negotiate and then review the written T&Cs... probably some back and forth and lawyers reviews needed...
Bowley... The project you linked too looks to be in a completely different part of Mongolia, almost the southern most part?
https://i0.wp.com/tmkenergy.com.au/wp-content/uploads/2022/02/Fig.1_General-Location-Plan_Feb_2022_Gurvantes-XXXV.jpg?resize=1536%2C1040&ssl=1
Different location, different industry, different governor + local council, and different set of problems...
2 and a half months since the last operational update, we are overdue an update generally imo!
I note there seems to be a condescending attitude towards some posters keeping us updated of the developments with regards the facebook posting of local protest groups; I for one am grateful for any member who takes the time to both research and post information, even if I don't agree with their personal conclusions as to what it means for MATD.
I'm optimistic with MB reported as being in country that we can expect some news sometime this week,
ATB