I would say that I am not a chartist but arguably if you ever bother to look at a chart at all then you are a chartist even if you deny it... but from the chartist view point there is a classic descending triangle. This would be viewed as a consolidation pattern and you would expect a break out to the upside. First target would be about 63p and second target about 83p.
Trinity in an announcement in April stated they expected the results of the bid round to be announced in May.. well 1w left.
The bid round ran from June last year to the 9th January .
Nothing seems to move fast in Trinidad and the slow pace seems to go to the bureaucracy of government . Its not that they had that many bids .. 16 bids for 8 blocks.
The percentage fill of the barges is very variable, as is the months affected. The guidance they put out was conservative though, likely much better. The variability in the Manaus root is why they are looking at other options. The Manaus route does otherwise have advantages... the oil doesn't have to be thinned with lighter oil for the pipeline which reduces cost and they are paid on delivery which helps cash flow.
I suspect will not make a huge impact but over time will help share price. Ultimately what matters is that they keep making money. I would prefer cash to find a home in new projects rather than dividends and buy backs but it seems they have cash for all.
In reply, on the Manaus route the barges sail in a convoy and then off load to a sea going tanker but the barges are often waiting for the tanker to arrive and then the off loading takes time. The company were looking at a plan to build storage tanks and Manaus to stream line the process. Seems quite a bit of work and expense to me but they are the experts.
Just to clarify over 635,000 barrels of oil shipped in April. A record I believe. https://www.perupetro.com.pe/wps/wcm/connect/corporativo/7318e1ef-aaa2-4c91-8313-7d2090cba5fa/Producci%C3%B3n+l%C3%ADquidos.pdf?MOD=AJPERES&liquidos
Ultimately I don't think it makes much difference if spare cash is returned by buy back or dividend. Indeed I would be happier if they were to use it to expand the company such as prove up and bring on a new field. This will come with time.
Main issue is the oil price.
One advantage now is that they have no debt and cash in hand. If necessary they can defer further capex as their return on a new well is almost like a fracked well with very high initial flow of oil that returns invested cash quickly and then a long tail with very low expenditure.
Just a reflection. PB had said in the past that he thought that some of the targets on the block may need to be fracked to show their true potential.
But here, with evidence of sweet crude but low permiability, there was mo mention of fracking. Presumably they must me pretty confident of getting good flow from upper zones….
It still leaves the question if in future they may want to come back and stimulate the wells at Royston with fracking?
Not an expert, just asking the question.
AGM announced but no more buy backs.
Royston flowed before so other zones should flow.
And PB has said before that some targets on this block may need fracking to show their full potential.
And Royston isn’t priced in at these prices anyway.
But to be clear the fall in NAV was all due to FX. Valuation was slightly up.
This is usually used in reference to small mining companies but it looks very appropriate for TXP.
After the initial proving up of the geology concept and speculative/exuberant phase we have been in the “orphan phase” with no money coming in, construction costs and delays with covid and bureaucracy.
Thoughts?
I think that Royston will likely disappoint many investors. Many probably expect too much. That was shown with the first Royston well that was clearly an exploratory well looking at several targets, set up for gas it found oil on all 3 targets .
That is a good result for an exploratory well.
The question now is how productive will one of these targets be?
This first Royston development is unlikely to be optimal. They will likely have to see how it cleans up, it may need a pump. PB on one of the presentations a few years ago thought that some of these deep targets may need fracking to show their true potential.
But I wouldn't be too negative. Cascadura is big, and will deliver great cash flow for decades and there are 20+ targets on this block, and hopefully they will add to this list with the current bid round.
Big picture is that the company are right on the geology. Not every drill will be commercial but they are likely to get better over time at targeting those that are.
So 2 days on the run we have had buybacks. 0.15% of MC but it’s a start.
PB on site.
He isn't often on site but I recall has been in the past for testing of new wells so ?Royston test results imminent?
Also at the end... 60 workers on site, so cracking on.. especially as much of the kit has been prefabricated.
NAV 463p. A year ago it was 417p.
So looks like continues market beating 12%+ annual returns that it has done for decades.
The SP doesn’t reflect this. Discount is close on 50% now.
Fortunately I don’t need to sell, in fact I am buying back in. Obvious concerns over fall out of SVB but experience tells me that sell offs at times like this are over done and gives opportunities for managers .
There’s a strong future for gas, DEC are counting on producing for the next 50years..
If you believe the zero carbon lobby then this looks optimistic but there’s always carbon capture and storage that is much more doable for NG than say coal because NG produces half the CO2/kw of coal.
And even with a big ramp up of solar/wind there’s a big need for backup. Battery and hydrogen doesn’t cut it and maybe never will.