RE: This company7 Jun 2023 16:20
I think TXP will get wind back in its sails when they get Casudura online or good Royston results, basically FCF flowing in – Forecast in 3 weeks or so. At that point, the massive discount to NAV/NPV10 can start to close.
Sentiment has been crushed by two years of delays. Permitting, approvals, NGC, Shell etc. But the general market sentiment is also low, so it’s hard to separate the two.
Either way, it’s left TXP highly discounted on any metric I use for their current discoveries and forecast flow rates. Then they have over 20, imo- high-grade exploration prospects lined up to drill on just this acreage. Having only drilled four so far.
That said, the Permitting is done, NGC has built the pipeline, and Shells are sorted. And once TXP has FCF, the brakes will come off, as they’re then in control of further drilling and development now that the processing and export infrastructure is in.
Trinidad desperately needs gas due to a BP gas well going offline leaving the country in a bad position. This is likely engaging all parties to meet the June deadline. We can only wait and see.
Asset Exchange & Bid Round
I don’t think this has been discussed much and seemed to land into silence for such a fantastic pending deal.
The asset swap to attain Balata East and Rio Claro. Adjacent to the Cascudura acreage.
All being well, we see this getting ministry approval in H2. I always looked at Cascudura and Royston on the map and how our licence boundary cut it off. How far do they extend into the Balata East block? This could be exceptionally value accretive. I think it’s a fantastic deal for TXP.
It’s in the Herra sand fairway and has a 3d survey already done.
With the drilling of CAS-C in H2, next to the boundary, we should find out more about the lateral extent and depth of the reservoir.
CAS-A drills were exploration wells with an older rig that couldn’t handle the pressures. Only a few of the sections were tested due to not wanting to risk the well. The new Star Valley rig is set to drill producer wells. Larger and deeper. Will we see even greater flow rates and reserve upgrades? 2 X CAS-A wells are expected to produce ~ 12-13000 BOEPD. I wonder how the CAS-C wells will flow.
On a side note, Canada is performing better than London at 61p equivalent price.
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