Member Info for Vernony

One think tank has predicted that oil could fall as low as $30 pbrl in 2016. It would take a war , in the MiddleEast, for oil ever to see $65 pbrl ever again.

Exactly, thanks

I don't think you are addressing the whole problem. It is Shale which is causing the drop in world oil prices and it will continue to do so and even increase as time goes by. Therefore, the more shale gas and oil in the market the less Saudi oil will be sold. It makes sense, therefore, to buy into Shale (in other countries by Saudi, but not in their own)it will give them the best of both worlds.i.e. as one declines the other increases ...

Good idea for Saudi to buy into shale . However, I am not sure what you are trying to say re assets. Proven assets have a value, assumed assets from. say, 3D profiling have a notional value. At the moment CAZA are probably best described as asset rich, but cash-flow poor. With an added notional value for its unexplored licences . To my mind it makes CAZA a sinch for a merger, say 60% - 40% . That would not particularly hurt the PI because CAZA would be debt free and its share of the deal would be free to move upwards

Well I don't see why Saudi would wish to to turn off their taps and sacrifice income for no income. They do have a country to run, and the only thing they have to sell is oil and sand. That is a bit like saying that America should plough up its wheat fields to force up the price of wheat ! With reference to supply and demand. There is still demand,and the company have to create their own customers, the same as any other business (and oil company) . Their margins, however, are not enough to service their debt and also prospect for more at the same time. If they could produce more oil, they would make more at their margins. As I have said on here before , it is most unlikely that the USA will wish to see its own oil/shale gas fields go out of business in order that they can start to reimport oil from the Middle East at a cost to their own balance of payments and political blackmail. There are all sorts of tax breaks a government can give and no doubt they will try to ease the situation at home soon. Can you imagine the outcry from the American media if they do not ? As I see it, CAZA has a lot to put into a merger and very little hope of survival outside of one. They took on acceptable debt at the time , but circumstances have wrong-footed them. What they have to offer now is working wells ( no expensive drilling involved). They have pretty much proven oil reserves, yet untapped . Its not a question of an economics degree, its logic !

Are you confusing merger with take-over ? In a merger we would retain our own shares in CAZA. In a take over we would be offered shares in the new company, depending upon the current standing of the company taking over, then it could be on the basis of anything from 50 to 300 CAZA shares for one new share . That would wipe most PIs out , as you say !

Seems like a paid holiday to me. Anything to do with fracking in America is available through the American press . America has fracked 800,000 wells over the years. 2,000,000 fracked worldwide and, no, the water supply of America has not been nationally poisoned . There are no more earth tremors than is the normal background . You don't need to visit the USA all of that information is made available right here . Back home fracking has been going on here for man y years now and, no, we are not all poisoned, and no more earth tremors than is normal (about 300 per year in the UK) , and no despite the BBC and the Telegraph, Cuadrilla has never admitted that the caused two earth tremors as a result of fracking. They said 'probably', there could be other reasons for choosing that word, whatever, the word probably can never be used to describe a fact. It boils down to 'unproven' !

Hi Lizzie, I don't follow that, a merger would be surely on a percentage basis .I.E. someboy else gets 40% of CAZA in return for squaring off the debts. Somewhere in the agreement would be agreement to restart drilling, because increased quantity is the only way to beat falling oil prices . If they don't do this then they will shrink and shrink . CAZA's main asset is ownership of the licences for some very, proven to be, proliffic territory.IMO, of course, this BoD has been hanging onto its status, because it does not want to share power , and they have left it too late. The only option is for them to merge and that will be on far less favourable terms than it would have been 6 months ago. I have a IMO, of course , feeling that they are sittiing wringing their hands in dispare and saying 'woe is us', when they ought to be faxing likely partners

I think you have it about right Spike. They really need a lift of $2-$3 per barrel on the world market, and as this is unlikely to happen. Well a small war in the middle east could help ! Having said that, they appear to have the oil underground, but unless they can afford to drill, then there will be in decreasing amounts that they have to sell. So the figure of of an increase of 24% in the price of BOE doesn't mean much if you are pumping less. Its gloomy, but not impossible. If a big player becomes interested in what still be in the licence area....That they are talking to somebody looks hopeful but lets hope it is not simply a refinance deal, but a co-operative arrangement with an exploration company

Just totting up their wells, some may be only partially owned . They currently have 8 producing wells and 8 non producing wells

http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html

Well said and you could have added inmature and often quite dim too . Most of them are simply relaying what they have read in biased or disminformation leaflets put out by the organisation they support. Very few have actually researched or cross checked what they have read. Still is a generation thing they grow out of it, remember the CND marches and the Swampies and the anachist movements. Well they have all grown up now and have families . The cost winner leaves his/her home at 8.30 am five days a week and gets back home about 5. They have mortgages or rent to pay and real responsibilities and trying to keep their heads above water . Most have become model, law abiding, citizens. Some even doctors, bank managers, industrialists, investment managers, military men, policemen, politicians and wouldn't think about demonstrating, nor pay much attention to the issues about which the undeveloped youngsters demonstrate about today

Sorry to disagree, but they have to get the most they can for it, not just sell to any buyer who comes their way. If not they could face law suits from disgruntled share holders. My gestimate is that this company's worth is around $1.5 billion (given all its proven assets, perhaps more if you take its potential assets into account) The debts they have are insignificant in that figure....The problem they have is that as a small company the price of oil is squeezing their margins. . Larger companies have economies of scale so they are ripe for take over voluntarily, or hostile. Although there is a lot of buying today, somebody somewhere perhaps knows something, or it has been tipped in a investor journal somewhere ?

Oh well, as I have said, they have proven oil resevoirs (not just 2D or 3D indications) In effect a buyer would have to buy the oil in the ground, plus plant, less any debts. I don't think the Regulators would permit it to be sold for less than its worth, because that would be a fraud on the investors...The only problem is if CAZA run up more debts in the interim. I hear you on the buy in prices I bought a tranche of mine at 25 pps . Just wondering if anybody has a high window cill that I could rent (will pay by cheque !) :))....I am not blaming anyone but I still think it has potential. I don't know their actual figures but as a rough gestimate assume that over their whole operation they have 3,000,000 barrels of oil/oe, still down there. So give or take 5 pence they have a lot of cash down the hole, as it were !

Yes, I think you are right, I had better stop digging its upsetting the market

Whoops senior moment there they are probaby earning 1.5 million $ from sales per four week month

I am sure that somebody will correct me if I am wrong, but didn't CAZA pay off York some time ago by a debt for shares swap ? Anyway I am sure that CAZA will not simply wait until the sp reaches zero, they must be talking to somebody somewhere. The plus point for CAZA is that they have proven oil and they are currently pumping it. That relieves any partner or buy in /buy out of a lot of expense. So the company does have a value and that is an estimate of their recoverable oil remaining in the ground, plus its rigs and pumps and machinery and, of course, another ollie company would run it along with its own administration, thus wiping out most of CAZA's current administration costs. Rule of thumb cal suggests that they are probably selling BOE at the rate of 1.5 million per four week month at a current price of $47 pbroe, from which one has to deduct costs and debt. It does seem sensible to sell it as a going concern. I dont think that you could farm in/out as the production is then shared pro rata . Their sales aint big enough to support two administrations..All IMHO, of course

Yes, you could be right, especially the last paragraph of item 4 . That would seem to fit CAZA admirably

Yest, that's true. There is said to be 300 years worth of coal under our feet. Mind you I think Messers Scargill and co, had something to do with industry looking elsewhere. Still, as you say, it's still there . I'll take a look in the garden shed to see if I can find that shovel I have somewhere : ))

Well one report recently placed oil at about $30 in 2016...But looking at things logically, why would the UK wish to import oil and gas if there is near sufficiency right there under our feet. I don't believe that the government would want to see our assets wasted and the added cost to the balance of payments deficit created in its place , not to mention the political problems of being dependent upon foreign energy. What ever happens, through tax breaks, or whatever, the government will keep home produced energy alive and productive