Member Info for Tobin

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.

Impressive production. Do we know how they are moving so much oil?

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.

I agree, a must see.
Get the feeling that TXP are well placed for the bid round, and XM seemed impressed with quality of the data room. Get the feeling he saw what he wanted. Though we know that they have maybe 20+ targets already identified on the block.

Spoke to the CFO at the London event and he was more inclined to buy backs as he was quite clear in his mind that the shares/company was markedly under valued.
But with shares fairly tightly held and a limited free float with Canadian regulation, he didn’t see more than 10-12% buy backs/ year.
So still plenty for a dividend policy.
He was also saying they would have more cash to return when they sorted new banking arrangements. This has come to pass.
He was intimating a 10% buy back AND a 10% dividend on the then share price.
Considering the amount of cash they are throwing off, quite conservative.

Peru hits the news and the share price goes down. Not surprising really but a “buy on the dip” opportunity.

At the London presentation the forward figures were conservative but Manolo seemed optimistic that he could move more oil by optimising the Amazon route.... The barges have to wait for an ocean going tanker to arrive and then off load. He has a plan for some storage tanks that will optimise the transport of oil.
There is another refinery he can ship some to that is closer in Peru, I can not remember the name, 2000bopd ish as I recall,
And a pipeline from the river to the ONP bypassing the bit that keeps getting cut.
So he is working on it.
Peru is still in a mess politically.

We know they are going back to cascadura but do we know how deep they are planning to go? The Cascadura Deep-1 had to stop at 8,133 feet because of the pressure but the original target was 10,600 feet.
With the new rig performing so well are they planning to go for the deeper target again or is this planned just to be a development well ?

I agree, with such a large discount there is clear upside especially with continued buy backs.
On the other hand it is clear that there will not be a wind up just yet.
I can easily see 20% returns over the next year or so, if not the pressure will be for bigger buy backs or wind up will be back on the agenda.

It’s good to see the new rig perform. Hopefully the testing will be as straight forwards.
We will have to see what the flow rates are like but I recall PB years ago suggesting that some of the targets on this block may need fracking.

Manolo was talking about this at the presentation in London. The plan is to bypass the section that often gets cut and put in a new pipeline from the river to a pumping station. Oil will need to be barged to this facility but the distance is much less than down the amazon, .
The hope then is that those who are cutting the pipeline will realise that oil is still getting out and the pipeline can be repaired. I think that is optimistic but it should mean PTAL gets more oil out.

Sorry, wrong forum, though it was TXP. But much the same story but there will be dividends from PTAL sooner.
But again they have other targets, and I think they may become preferred bidders for other fields in Peru.
Again this will absorb. Cash but if successful will be a bigger company with bigger divis.

Txp isn’t a dividend play anytime soon. They have too many targets to drill.. 18-20z
This is going to absorb a lot of the cash they will be churning out from the Cascadura wells.
But in 5 years the company is going to be a lot bigger with a lot more wells. How big? Nobody knows.

google investor chronicle pantheon for the past week if you can not follow the link
https://www.investorschronicle.co.uk/news/2023/02/03/private-markets-are-more-transparent-than-public-ones/

The share price has gone nowhere even though the markets have bounced back. US markets are up 5-10% over past 2months, and even more since September when a lot of valuation date from. NAV should be over 500p and they will be taking every opportunity to pick up new investments at good prices. Buy and hold.

I think you could burn green hydrogen but it is rather wasteful. Better would be to use it in a fuel cell and produce electricity. It is only 60% efficient but if done in your house the other 40% is heat, great for your hot water etc.
But the problem with hydrogen is the round trip efficiency of making hydrogen from electricity to store and the back to electricity... for trucks or anything else... is never going to be better than 40%. Batteries or pump storage is 89%.
Hydrogen is so superficially sweet .. take water and make hydrogen , use the hydrogen and you have water again. But the physics and economics don't stack up.