Member Info for ZENGAS

In terms of a possible cash element Chevron appears to be paying $67.5m here at this stage so how does this deal ie our 12,000 km2 Block 2A look in a world hot spot compared to Challengers 14,500 km2 offshore Area 1 block Uraguay with similar water depths with the Transaction completed today and a similar $40m minimum well cost.

We are already 50% covered by 3D ie some 6,000+ km2 3D worth well over $20m and drill ready for 1 major prospect minimum. Challenger isn't - their farmout is just progressing to 3D and not drill ready.

We have 1.7 - 3.7 billion boe in Kertang alone with numerous follow on prospects. Challenger/Chevron has 2 billion boe across 3 prospects.

Challenger are picking up $12.5m cash for the farmout. Bear in mind Chevron have to acquire firstly about $35m gross of 3D seismic.

The primary terms of the Transaction are:

· Chevron will acquire a 60% participating interest in the AREA OFF-1 block, and will assume operatorship of the block.

· CEG Uruguay will retain a 40% non-operating interest in the block.

· Chevron will pay to CEG US$12.5 million cash on completion of the Transaction, these funds will be used to support the further development of the Company's business (Completed today 29/10/24).

· Chevron will carry 100% of CEG Uruguay's share of the costs associated with a 3D seismic campaign on AREA OFF-1, up to a maximum of US$15 million net to CEG Uruguay.

· Following the 3D seismic campaign, should Chevron decide to drill an initial exploration well on the AREA-OFF 1 block, Chevron will carry 50% of CEG Uruguay's share of costs associated with that well, up to a maximum of US$20 million net to CEG Uruguay.

In basic terms Chevron pay $15m for seismic which would have been Challengers (40%) share meaning the 3D cost is actually a lot more - $35m+ imo - (we already have over 6000 km2 and drill ready.

So Chevrons immediate seismic cost is at least $35m. Paying $12.5m cash to Challenger and $20m for half the well cost. In total the farmout deal is costing at least $67.5m to chevron.

We hope to be fully carried for the well and some cash so i think the above considering all the associated costs bodes well for a good deal considering it's a world hot spot, nearby infrastructure, ready market, intense industry interest with majors in nearby blocks and the fact that we'd been approached from the outset.

Not as much posting now so i think a lot of very short term and momentum traders will have moved on.

Following on from the excellent upstream article it reiterates as we know and what we've been told re more opportunities in the pipeline.

MBR anytime now.

While we only saw/heard word on a DRO mid year but not the actual named DRO. We were able to find out a lot earlier by looking at the Companies house website showing the new registered subsidiary in the name of the DRO/Asset ie DEWA as early as late March last year - worth keeping an eye out on sources other than from the company as i'd expect similar ahead.

These other growth avenues are going to be a significant driver of value due to the still very low m/cap in the scheme of things.

With the low float, too risky imo and for my own strategy to sell and try and buy back in, as someone else might have snapped up your stock you hope to get back.

Plenty of newsflow to come and worth bearing in mind their recent statement last month we were told of 'Multiple, near term catalysts ahead' in terms of value.

Plus Enquest expect to be hit harder for further losses and taxes and are completely scathing about the UK govt and in particular the windfall tax parameters when as they say none clearly now exists.

Expect to see them much more reposition themselves also and perhaps a further deal or two like DEWA to come again with SEA.

5/9/24 -

" Internationally, we are working on a number of growth opportunities in South East Asia where the return on capital investment is compelling.i

EnQuest was awarded two accolades at the Malaysia Upstream Awards, including Operator of the Year. "

Older you don't owe me at all and it's not a right you were wrong debate or vice versa. It's about sharing info and good debate and picking up from each others opinions.

Apologies too if i came across as touchy - not my intention, i just fire off sometimes as i'm thinking and hardly bother to check my spelling so don't read me as having a go. We've been here a long time across many boards and hopefully continue to do so but end of every year i think i'll give it a rest. Anyway i hope this is another big one from years gone by as- Gulf, Sibir, Imperial, Emerald (Emerald a 10 yr dog before it multibagged), Cove, and it certainly has the kind of assets to do so. I hope Save will soon have its day and good luck in PRD - It's impossible to be in them all that show promise.

Keepto - this was my response to Div or maybe it's O&W here ?

Re your post on comparing this to the likes of Cove or others.

I posted this back in February when i saw the potential here.

"Not since Cove acquired 8.5% offshore Rovuma from struggling Artumas in 2009 has there been an opportunity as big imo.

Their share price was 9p in 2009. If you were patient, Dolmens Brian Gallagher called it a speculative buy on tues 9th March 2010 and a target of 59p - so why i always believe it pays to be a patient buy and hold. And unlike Cove i see us with the likes of Dewa and similar follow on DROs pushing us towards £2+value potential given the pipeline of assets.

By the time Shell had bid in Feb 2012 there was an estimated 20+ tcf recoverable (8.5% of which to Cove). Shell bid $1.8b while PTTEP of Thailand pipped them with a $1.9b takeout at 240p post tax."

There was absolutely no infrastructure or industry for Coves discovery back in those days and it's only now being developed.

Referring back to the here and now - my earlier posts in the year and my thoughts then were and before any CPR was there could be in excess of 15 TCF on 2A.

Back in the earlier presentations (i think Feb) - James Menzies said 17 mins into that interview they believed there could be in excess of 9 TCF for Kertang.

Since then and the CPR - the upside on Kertang alone is now as high as 3.7 bbboe or around 22 TCF.

And at 18.30 in he stated "there are multiple structures surrounding Kertang that are also extremely big - it's just that they are dwarfed by this giant.'

You also have the 'Ponded turbidite play trend' that has emerged south-west in the block and Petronas have made the 2 sweet gas discoveries in Singsing and Machinchang. So i wouldn't rule out 30 TCF but that's my personal opinion considering those structures/plays.

The combination of above could take that to staggering figures - but wait and see approach because it's already a £14.65 figure just for 15.75% of the 9 TCF or around $1 billion value.

Bear in mind close to infrastructure, out of the C02 window and when compared to Kasawari that field alone has around 40% CO2 making it much more costly and around $3 billion supposedly alone just to deal with the CO2 (Rystat energy article). All in should prove very attractive to anyone given the majors are all over the surrounding region.

We just don't know what's there until drilled just as Cove didn't know - but the sea bed sampling, gas cloud/chimney, brights etc make it a compelling prospect and the risk basis is greatly improved by picking up these DROs on a separate value creation path where we now have 14 - 19 mmboe and i expect 75p minimum on DEWA plus the expected significant upside to those numbers before a follow on asset that they intend to get - which takes me back to the Dolmen quote, patience, ignore the day-traders for a few pence here or there and the potential for a major prize. All imo as ever.

Last month we were told of 'Multiple, near term catalysts ahead' in terms of value.

We have got the Dewa deal through.

The major Block 2A farmout is due this quarter.

That's 2 and hardly multiples in the near term - so what else to come next 6 months?.

Tuesdays presentation they said they were being brought more than enough opportunities to look over by Petronas. If they are offerring stuff to us in the first place then it's likely something would come our way (if we deem it suitable/right terms).

In addition they highlighted a significant opportunity set across the region.

They also said they hoped to build out a train of more opportunities like DEWA. If so, this alone is building reserves/resources at no drilling exploration cost to find those in the first place with many already covered by expensive 3D.

We are basically skipping two major capital needs steps that most companies require just to get to the stage of having 2C/2P. So this is why there is a huge value lag.

In addition they highlighted a significant opportunity set across the region.

DEWA is only a stepping stone and they value it as a future 75-100p on what is there now - not including the expected upside of some gas reservoirs/faults left untested and further step out.

What value another 1-2 DEWA type deals at zero cost ?

As to 2A we are surrounded by majors such as Shell, Total, Connoco, PTT and others. We have one of the most highly rated deal makers in GM with 35 years experience that has handled major deal advisory sales like Cove Energy, deals for BP, Apache now part of Exxon, Total, Cnooc, Sinochem etc. She arrived in June but was most likely consulted way back as the new focus was considered long before that.

With a farmout deal on such a mega 3d covered and drill ready project likely by year end - and rest of above - i'd think this would be worth a lot more than 50p for starters ie barely £28m which in itself is just too low and a fair but imo understated assessment for the short term and expect a few traders/short termers to move out along the way.

Some of us know (and sufferred for pointing out) the heady valuation of £50m attributed to a Sarawak focussed player awaiting an award of an onshore block at just over half the size to 2A without any 3D, barely 450 km lines of 2D, No CPR, and no ultimate knowledge of what percentage they might have - and no other fall back asset to underpin or seperately grow the company. A valuation comparable would have put us at 100p/£50m mkt cap region.

Kertang itself is only half the picture - It's Block 2a that's being farmed out and if there's a success here, it opens/derisks much more across the block.

Ridiculous numbers but the £14.65 share price was just for the 1.7 billion boe figure in Kertang. The upside in Kertang is 3.7 billion boe.

Block 2 A is a whopping 12,000 km2 which now has a phenomenal 6,350 km2 3D seismic on top of the old 17,500 km lines of 2D as well as over 2,400 km2 of seabed geochemistry. This you couldn't pay for now !

So worth remembering for anyone new to this that within Block 2A - and referencing the June presentation page 9 where you will see a number of -

very large leads in what's called the 'Kertang play trend' very close to Kertang itself.

In addition to that - there are and numerous leads in what's called the 'ponded turbidite play trend' south-west of Kertang.

These have now been upgraded due to recent Petronas discoveries just outside our block ie -

Machinchang -1 2023 sweet gas discovery

Sinsing -1 2023 sweet gas discoverey and adjacent to Sinsing.

The budget to run the company has been cut right back after the streamlining in June and they had enough to run it to end of Q1 2025.

I can't see them giving investors a share price valuation of 75p-100p for DEWA and £14.65 for Kertang one day and dilute that figure the next imo.

Why so confident on saying a 'near term' announcement by year end on the 2A (Kertang) farmout. They've also based that on retaining 15.75%. I would expect negotiations must be well advanced when they are touting those figures.

The question is can they pick up a few $million as part of the farmout process that they are hoping for.

I looked at the deals G Murphy was involved with for Active Energy re the farmouts to Total and CNOOC (led to the Venus discovery) but as Active is a private company the details weren't divulged that i can find.

It's her skill/contacts i hope that lands us a good deal given the industry interest and her wide advisory role.

As for DEWA financing - perhaps RBL and cash isn't needed until a year away yet.

Once a project is sanctioned the 2C will become actual 2P reserves. The CPR and valuation on DEWA is to be ready by end H1 next year so i think only then will we see the financing route but as they say they intend to get a financing deal rather than dilution so RBL perhaps.

Where perhaps a raise could come from would be on the basis of a producing asset if it's deemed value accretive but when that could happen is anyones guess - but i don't see that on the horizon just yet. They are looking at building a train of similar opportunities to DEWA so i would assume they would still continue to come at Zero cost and likewise be debt financed - is the next one 6+ months away/summer next year ? As they said, Petronas is sending a lot of stuff their way and have more than enough to look at.

DEWA production should give us around 5,000 boepd based on the 100 mmcf/d expectation along with the up to 2,500 bls condensate/day and given they have to make the most of the PSC 10 yr production timescale i expect that to be up and running/producing in 24 months. Development plan to be completed H1 next year.

All in, this is materially under rated of what's in store just on the DRO front re DEWA, DEWA material upside expectation and any further assets like that - where we pick these up at zero cost - compared to spending $$$$ drilling actual wells to find gas is a rare opportunity. Effectively booking reserves and resources at zero cost and i can see us having north of 50 mmboe in time regardless of block 2A.

My notes

DEWA -

Hugely transformational at zero cost for those resources.

500 Bcf in place (3-400 bcf recoverable).

'A lot of upside beyond those figures'.

Also a lot of low risk fault blocks to be tested yet.

'There is hard value in those - now underpinning the company.'

'Lots of options under consideration -'negate any need for equity'

Build a train of these opportunities (in what's being looked at post DEWA).

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Kertang on Block 2A.

Mentioned the 3 other analogue type fields that had gas chimneys etc similar to Kertang.

Gas coloumns are huge in those fields - the 450m in one being higher than the Pertronas towers. The other 2 fields with 800m and 1km columns.

Kertang modelled at around 600m - potential upside could be 3.7 billion boe (why i said this was a 'Cove' like play for value months ago - see the £14.65 estimate for 1.7 billion boe).

Expect a transaction announcement this quarter.

Worth mentioning in previous presentations (not covered in todays) - other major prospects in 2A beyond Kertang if a success.

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My take as ever - DEWA+ expected resource upside are company making as Malcy himself opinioned on yesterday and with further opportunities of similar likely - so this is only the beginning of material resources/reserves growth coming in at zero cost wheras others have to use the drill bit first to find those BOEs. Hoping for a 10 bagger from these levels on that basis (which is barely £90m m/cap at current shares in issue implying a future 30 mmboe). This is the underpinning of the company on those.

Kertang - entirely blue sky opportunity.

Absolutely nothing tetchy in my post O&W.

Merely pointing out the lack of research/understanding of some on todays valuation in assuming things are the same. No one said this was worth 75p or 100p today for DEWA.

I said if they had announced this as a prospect, drilled it and announced they had made a net 14-19 mmboe discovery should it reflect zero change ? No and why it's worth 30p. As in the valuations attributed to PRD and previously in UPL in regards to reinforcing their valuations on similar if not worse criteria as to why this is. That's the point i'm making that todays news is a game changer that was waited on.

I've plenty of capital tied up in SAVP as you call it (Jeepers didn't you notice the name change to SAVE ticker a few years back and where you still regularly comment ?). Likewise here, AET and a few minor holdings in companies of possible or not - emerging interest. Chilled, but happy to point out what i see.

You're very wide of the mark with even the remotest analysis Older imo.

I could ask you what warrants a £52m valuation for Predator that you follow with no production or development finance.

If they had possessed this as an exploration project and announced a 14-19 mmboe net discovery how would it have been viewed ?.

This has come at no upfront cost with 3d seismic and 35 drilled wells with flow rates up to 19 mmcf/d all because previously the interest was for oil and these were smaller fields back in the late 80s to mid first decade of the 2000s made by Shell and PCCP. They are now much closer to gas infrastructure at 25km and 45km options.

Possible further gas upside in untested reservoirs.

Potential step out oil 2km beyond the Dana field.

One well testing oil at the edge of the DW41 field at 1600 bopd.

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Compare that to Conrad that needs over $300m finance for a gross 413 bcf (215 bcf net to Conrad) which needs a 60+ km pipeline (10km longer than original) and in addition a gas buyer has to build a $100m spurline all for a plateau production of 120 mmcf/d. Worth noting the well drilling costs they've paid out to discover that 2C and confirm the resource.

First gas not until 2027 and have been waiting for finance to work out this past number of years.

They also have a number of very small discoveries totaling a net 161 bcf off Aceh that on their own are too costly to devlop unless they make a major discovery. Here too, any gas production at the earliest is not until 2030.

Overall their 2C resource is 386 bcf with 161 bcf of that extremely uncertain never mind Mako as the dealys in securing finance have been long an arduous and not acheieved yet.

Their valuation is £70m and and has ranged from £54m to £100m primarily due to the funding situation which i have highlighted over the past year as a comparable but on much better terms all round here.

With much lower development costs we have 25% minimum of what Conrad have, so a £17.5m valuation for our DEWA interest is 30p and again these are on much, much more favorable terms. That's valuing the resource at $1.20-$1.60/boe ahead of the $4/boe as a production asset that the broker/company envisages.

Todays news is a game changer and there is material value here as of now pre development/production for DEWA. Next step farm-out for 2A and i expect a producing asset will also arrive. Again i see this as more material (SEA £8.5m m/cap) to Predator at £52m m/cap and the recent ridiculous valuation of £50m m/cap attached to Upland at Sarawak for an unknown % interest in an unawarded PSC that has no discoveries nor 3D seismic. I know what i prefer in terms of value and the scale of 2A and huge coverage with 3D chased by major oil companies - in this for free.

I think you need to better understand it Older as that assumption is very wide of the mark re value.

Https://seascape-energy.com/wp-content/uploads/2024/10/DEWA-Award-Presentation-20241018-vF.pdf

Step out and untested reservoirs offer significant upside.

And the rest of it

Cavendish note...

"Similarly at Block 2A, we estimate that Seascape would look to retain a 15.75% interest post farm-down. This would equate to a net 261 mmboe. At $4/boe this would equate to a potential unrisked value of £14.65 per share net to Seascape."

From Cavendish this morning 75-100p net for DEWA.

300 - 400 BCF potentially recoverable from an in place 500 BCF

Development ready with no further appraisal required.

Giving a net 84-112 bcf to SEA.

Under much improved terms and a very excellent operating partner in Enquest.

This will give SEA a net 14-=18.5 mmboe net 2P on development sanction - ( my note ie reserves picked up at zero upfront cost).

We note the recent acquisition by Total of a portfolio of Sarawak producing gas assets from Sapur OMV for $4/boe. This would equate to a potential unrisked value of 75p- 100p net for DEWA.

I don't think it's anything to do with a hindrance from the Sarawak government.

If that were so, why did the Korean company get an award 4 weeks ago (and in the midst of these long ongoing state/federal government talks ) from Petronas for a DRO cluster offshore Sarawak.

Has to be remembered that each asset has different costs for development and the terms to sweeten these deals have been up for negotiation.

Unfortunately not longshorttrade.

All i recall is some years back AK saying he thought maybe they could do something in exchange for a field or something on those lines but apologies if that's not the case.

I think the legacy debt was parked up mid decade 2010-2020 and todate those have never been paid. Legacy debt being different from the actual late paid invoices subsequent to that for a period.

Seven Energy went under on its circa $900m debt hence the rescue by Save.

From 2020 s-adm-doc -

'In the period from 2016, Seven Energy was severely impacted by a number of external challenges, including:

A loss of material cash flows from the SAA, as the long term shut-down of the Forcados oil export terminal in February 2016 prevented any “lifts” of oil production from the Seven Group’s indirect interest in OMLs 4, 38 and 41, which was followed by the receipt of a notice of termination from NPDC in

February 2017;

Delays in the downstream customers, particularly the Calabar power station, coming online and the long term gas sales agreement becoming fully effective; and

A substantial backlog of unpaid invoices relating to the supply of gas to Nigerian state-owned power stations, as a result of the liquidity collapse of the Nigerian power sector in 2016 (and prior to the intervention of the Federal Government of Nigeria in September 2017) '

While power output hasn't increased beyond the 5GW level and regular outages, the latest electricity figures are worth delving into in terms of customer growth on what is available and the significant improvement in revenues and improving reduction in subsidies. New government policy seems to be making a difference and one could only wonder if they could get say 30m customers on line, particularly Band A and tie in the 12-13 GW currently available with a 20 GW target still to be met before continuing expansion to a country of 210m population. Some 40 GW of expensive diesel powered generation to displace.

Good improvements particularly when considering the fuel subsidy cuts also and vehicle conversion to gas take up. More cash available for investment and as recently touched on, settlement of the legacy debt.

Discos - End Q2 2024 Total customers = 12.99m

Year on year basis customer increase = 13.24%.

Revenue collected in Q1 2024 = N291.62 billion. ($177.5m)

Revenue collected in Q2 2024 = N391.72 billion ($238m)

On a year on year basis revenue rose by 48.9%.

Government subsidies were N380 billion ($232m) in Q2 down 40% from N633 billion ($386m) in Q1 on Band A customers with Bands B-E frozen.

Seperate article -

' From the N1 trillion revenue recorded in 2023, the minister assured that the Nigerian Electric Supply Industry (NESI) could achieve an upside of N2 trillion income by the end of 2024.

He explained, “In electricity tariff, we can easily make N5 trillion in this sector, and we have seen the jump now. From N1 trillion in 2023, I can assure you we will achieve nothing less than N2 trillion for the industry in 2024. And this can only continue to grow.

“If this sector can boast of between N3 trillion and N5 trillion on a yearly basis as industry revenue, we will maintain infrastructure, we will replace dilapidated transformers, broken lines, damages towers. There will be a lot of money to be committed to investment in the sector because infrastructure is about investment.”

He said the government had also taken decisive steps to resolve legacy debts to gas suppliers and had secured presidential approval to settle the obligations.

According to him, one of the major hindrances or factors militating against the power sector is the huge debt overhang.

He reiterated that about N1.3 trillion was being owed power generating companies (Gencos) and $1.3 billion owed gas suppliers.

He said the president approved the gradual defrayment of these debts, adding that the intervention had also helped in ramping up generation from an average of 4000MW to a peak of 5,527MW."

https://www.arise.tv/adelabu-nigerians-dont-complain-of-high-petrol-prices-due-to-increased-electricity-access/

Report in today’s AI that Tullow is working behind the scenes on a maiden venture to take a stake in Nigerias oil producing Niger Delta, the first time in its 40 year history.

There must be other opportunities out there that Save are eyeing. The previous 2years annual reports they appear to have screened some 40 opportunities so I couldn’t see that just suddenly having ended since South Sudan was announced. Sipec came in the midst of that so who knows what else is still being worked on.

Hi Rocky,

Going back to an earlier post about 10 weeks ago late July

" My tuppence worth is a few variations on where we are/could be



1) If South Sudan goes through - we should be net debt free in 2 years (regardless of Chad).



2) If South Sudan goes through and we gain up to a third of Chad compensation - we should be debt free and possibly have $300m-$400m cash. 



3) If South Sudan doesn't go through - we need Chad 25% compensation to leave us net debt free. 



4) If neither S.Sudan or Chad work out - then we need about 3 more years combined with the Sipec Acquistion to leave us net debt free. 



5) That's not taking into account say a sale or farm in for Niger re net debt reduction.



6) Not taking into account a further oil asset that does go through.



7) Not taking into account much greater Nigerian gas sales given our spare capacity. "

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There's variables to the above since 1 and 2 above in their original form has likely changed. The results are out of the way and as i said a few weeks back i don't see how or why we are suspended for just suspension sake as if to protect the share price as some suggested because it will do what ever come what may on relist.

Therefore they are obviously pursuing a deal to date even with the original deal ending a month ago with the next forecast update in November (or earlier if the negotiations end). It must be worth pursuing because it depends on a shareholder vote regardless - so why waste time if they thought it would never gain majority shareholder approval. Surely the institutions must be sounded out and therefore insiders for AK/Team to be continuing with it ?

My stance hasn't changed as i'm waiting to see what the outcome is once suspension is lifted.

I think we'll always run a long term debt facility for the forseeable even if we were net cash positive to take advantage of any other opportunities.

Other than a few snippets in very earlier presentations , we haven't even seen what valuation can be given to the renewables side as they gain momentum.

Largely forgotten about in valuation terms because we think mainly in terms of our oil/gas assets but if this was a renewables start up/early stage Co with these assets agreed/in motion i wonder how the market would value them and even forward price them.