Member Info for Troughsnout

Ha - so amusing to read someone @Scot126 who writes almost every day on PANR. Very comfortable with my geo knowledge thanks pal. The only ad hominem comments come from yourself not me. I'm sure you can take solace in all the commercial successes drilled in Pantheon's illustrious 16 year history and extremely conservative guidance all along!

The permiabilities they gave were estimated. There can be no actual measured permeability without taking whole-core or at least side wall core. The graphics and numbers they used were from old presentations. You have to ask yourselves why they would rush out a follow up presentation only a few weeks after the last one. Share price, bro.

Completely agree, and the Brevarthan Research note was if anything pretty conservative about the cash build...if we have a sustained tight gas market driven by the Russkies cash could build above £400m at year end, given average revenues (ex hedges) of £3m a day currently... I think also looking at the BR note the depreciation charge looks a little low, which might mean the cash tax figure is too high...

Similar to Brevarthan Research post : https://brevarthanresearch.substack.com/p/serica-energy-building-cash. Cash accruals will build with December revenues booked as cash in January.

New update from Brevarthan Research on Serica. Cash building towards £400m by year end 22. https://brevarthanresearch.substack.com/p/serica-energy-building-cash
Leaves upside to £3.40+ on conservative pricing assumptions.

New bullish piece out on Serica from Brevarthan Research: https://brevarthanresearch.substack.com/p/serica-energy-building-cash Cash on balance sheet could approach £400m by year end 2022.

The report converts everything to dollars for ease of comparison, along with the market cap and current cash balance. While Serica has no debt, it does have contingent payments due to BP and other parties based on various milestones, along with a portion of decommissioning costs and also lagged liabilities based on derivative settlements and the cashflow share arrangement, along with a dividend payment pending. Hence the H1 starting "net cash" position makes prudent adjustments to the cash and equivalents position of £92m to get to a "net free cash position" of approx £15m or approx $20m. That $20m acts as a starting point for a calculation of incremental FCF (free cashflow) in dollars which appears to be well north of $100m depending on where those liabilities (the net offs described earlier) land at year end (figures which we don't yet have). It is even more encouraging that December receivables will not yet have been paid from that period of super high gas prices. So yes I understand that may cause confusion but its an attempt to look at the balance sheet prudently.

New piece on substack published, postdated by RNS but still pertinent : https://brevarthanresearch.substack.com/p/serica-energy-gassing-up

Substack piece just posted: https://brevarthanresearch.substack.com/p/hurricane-energy-brent-to-the-rescue. Some thoughts about cashflow, debt, bubble point etc.

Saba have been buying since February this year. CA's recent Hurricane purchases have come after the liquidation clause invocation by Saba. See CA's RNS's. As for the court saga, I don't think anything nefarious took place, I just think it was bungled and the company's immediate liquidity didn't presage a technical default, though that may well happen next year. The question for you is what happens if CA is wound up later this year, as is suggested by CA's recent RNS.

New note out from brevarthanresearch(dot)substack(dot)com on TEN field, Ghana. Production decline continuing into June. Suggests reserves will have to be further written down if trajectory continues.

Pretty clear to me that CA are buying Hurricane stock in order to create a poison pill for Saba Capital. Saba have 20%+ of CA and have invoked a wind-up clause for the EGM later this year. Saba have shorts in CA's other holdings eg De La Rue and Allied Minds. However shorting Hurricane isn't easy for a US hedge fund. Given Hurricane is a potential illiquid risk of going to zero, by buying more Hurricane CA is attempting to ward off Saba and get them to give up their wind up attempt (which is a risk arb trade as CA trades at a 20-30% discount to NAV). So unless CA put in a bid for all Hurricane shares outstanding (seems unlikely) this looks like a poison pill defence which either works (Saba goes away) but them CA doesn't need all that Hurricane stock, or fails, in which case CA will be wound up and the Hurricane shares will be fire sold later this year. On that basis to own it you really need to believe at a minimum Saba get cold feet (neutral) or CA go for the jugular and bid for the whole company if they hit 30%. I'm not sure CA's shareholders will allow them to do that however, and it would represent over 50% of CA's NAV. In terms of Hurricane's own prospects, I recommend brevarthanresearch(dot)substack(dot)com pieces on Hurricane.

@Slift
Final thought on Gas injection at TEN:

Reinjection will provide pressure support but it will also sweep more oil especially if the oil can be kept in a gaseous form underground which depends on what pressure the oil drops out at dew point. So in that sense its correct. But that will not give lower associated gas production. Following along these lines will result ultimately in leaner gas as oil stripped so more gas produced if you want to maintain oil production at a given level. Ultimately it is unsustainable as the oil will decline. This assumes oil is in a gaseous phase in the reservoir in TEN but we know than not to be true everywhere. We can say that TEN is a very complicated animal regards phase distribution.

Slift

I wasn't aware that Ntomme production was anywhere near or below bubble point. I completely take your point that raising pressure avoids gas cap formation in the field, and therefore avoids impairing oil production further, but conversely injection over time, while lowering oil decline (or temporarily raising production) raises associated solution gas production over time. What intrigues me more is whether the company is planning on taking Enyera gas and injecting it into Ntomme.

They are importing LNG because Accra is allegedly short gas and its too expensive to pipe it from TEN/JUB. Also - TIA as they say in Africa. Someone making some $$$.

@slift. If that's the case why have higher levels of injection from the existing injector over time lead to higher GOR and lower oil production?

Surely a gas injector ultimately raises the GOR??!

Thanks for your post JJ. I agree its a matter of opinion. I'm just not sure a gas injector will make much difference in the case of TEN - there are no other wells planned there. In fact gas is a huge problem as you may have read on the substack. The first LNG shipment about to arrive at Tema too. So there is nowhere for it to go, and calculate the gas oil ratio at TEN and you can see the problem.

You can back out the monthly production trend on the Ghana petroleum commission website. You can see Q2 TEN production from Kosmos release and compare with H1 Tullow TEN reported production. That enables you to get to a figure of 33kbod for TEN in June. That implies a 1-2kbod monthly decline in TEN. It will be thus mathematically hard for TEN to deliver 35-36kbod for the second half. Happy to be called "shorter scum" if you like. Its quite alliterative, i'll give you that. But I appreciate you are "in the know" so I will continue to toil in the foothills of your mountainous knowledge.

Back out TEN production. 33kbod for June is accelerating decline, given half year average. Remember the negative op leverage of the FPSO costs (c600-700k$ per day), which run through the CF from financing line. 35kbod for H2 (gross) is not realistic. Despite new Jub well "slightly" ahead of expectations, Jub H2 production guidance is broadly flat. Cashflow treading water while production falls. Tick tock.