lets hope we get that farm in agreed in the next month then.. This is gambling.. . (further) diluted to oblivion or even go under vrs multi bag if farm in .. thats the bet you're making here.. bets your money, takes your chances...
I don't think the question is answered - PVR will have to plough on if the farmin deal fails. That means they will seek to contract a rig and seek all the approvals from the department etc. In turn that will require LOGP to also commit their portion of the funding. If it were BP, then everyone would be comfortable but precisely because it is a cash poor minnow, they will have to have the money in hand. Stephen Boldy said they would raise in Q1 unless a deal was done. They won't wait until 31 March to take a decision and I assume PVR will not stop their drill process simply because they are in negotiations on a deal that is yet to be done (that would leave them very vulnerable). At some point LOGP will have to pull the trigger on a fund raise. My question is when will that happen? Don't get me wrong, I'm hoping every day for news of a farmin deal but we have a lot of false dawns on BROE and so should anticipate they will have to drill it again by themselves.
Has jimmy not, in effect, answered your questiion in his original response post Mams.
LOGP sit on their hands for the weeks / months until they know if the farm out agreement completes or not. If it does they likely get the 5m for the drill as part of it and that drill happens when parties agree it happens.. not too long after agreement reached I guess .. but whenever, LoGP would have a carry so no worries.
If it doesn't complete another farm in partner might be sought and LOGP survive - bridging loan to keep lights on etc - for a while longer waiting to see if success in that endeavour.. only of thats not happening do they have to think about trying and get the 5m from a raise or such like imho.. that might indeed be a big thing to get done, if the can get ot done.. etc..
LOGP holders are hard core speculators, the way you're thinking I'm wondering if and maybe you buy BP and forget about this Mamms..
Jimmy, you make it sound like a done deal but in fact it is not certain. The statement from PVR states: "However, given its conditional nature and subjectivity to final contracts, no specific commercial details are being released at this time. Shareholders should note that there is no certainty that this farmin will be concluded and further announcements will be issued in due course and as appropriate." That's a fairly strong caveat. Therefore I don't think LOGP can sit on their hands unless it is a h2 2019 drill which is what I think it must be. My question is, when do LOGP walk the streets and raise their $5m? The CEO said q1 2018 before Christmas and we're half way through now.....
PVR announced that they had agreed commercial terms for a farm out and given the oil company an exclusive period to conclude legal terms.
If this happens then logp would most likely get back costs and a well carry, so no need for equity dilution.
There is a drill planned and LOGP need circa 5million bucks for its share of the costs. A loan extension to keep the lights on while negotiation is continuing is one thing but they will have to raise money for the new drill. When does that need to happen? Given that they have not been seen in the market yet looking for cash, that strongly suggests 2019 at the earliest for a drill....
It would be usual practice for both par and Lansdowne to farm out together as otherwise LOGP could block transfer of interests in license and drilling plans.
As LOGP are dependent on borrowed money I expects that their lender will keep them afloat till the farm out gets done and they receive back costs.
I've also been following this saga for a long long time, have zero PVR shares, but a 'lot' of LOGP.
I've just run a series of reports concerning LOGP from Companies House and from Creditsafe and the 2016 accounts plus creditsafe report have a note from the auditors stating that there are 'going concern' concerns. This was for the period one year hence from the date of these accounts. I don't know the present position.
Your post here on 30/12 states that LOGP have zero cash and I really think that means that there's nothing of worth but maybe the remnants of a loan from a 3rd party - can't recall the name. I don't know but supposedly this keeps them fluid day to day.
There's a load of posts here, and on London South East, about what their (LOGP's) B'Roe share is worth and I think you had a go at this as well. I agree with many of the opinions which are bandied about but not the ones where LOGP could fail because of this. I've said this before (on LSE as AJED) but raising $5m to cover their 20% of the 'K' well is equivalent to a cup of tea for many Operators and funders and I hope LOGP are doing what they can to solve this. Losing 20% of a given opportunity cannot occur.
I suppose that after all this waffle my real question to you and the ones on here with a sensible opinion is where the hell are they going to get it from without giving everything, or a large % of their 20% away?
I'm also intrigued as to why the appraisal well (K) and the farm-in are separated out by O'Reilly. As I stated on LSE I don't think people understand that this is really the case and LOGP's position ref $5m for the 'K' well will become chicken feed in comparison to this if PVR decide to develop (or further appraise) under the terms of whatever occurs with the farm-in. To me it seems very strange that there's an announcement ref an appraisal well and this isn't tied into the overall farm-in directly. It's almost like a teaser and if it were me I wouldn't sign any farm-in until the 'K' well had been drilled and was successful. That's a long delay and puts to bed the quick turnaround lots of people are talking about.
It is, as is ever the case with a certain CEO, fascinating.
yes I see this and thank you for taking the time to explain it ...
if this is correct and Broe now represents the best value ... should one be concerned about their financial difficulties about being able to stay in the process long enough .....?If this is not a worry should one leave PVR to concentrate on LOGP and Broe
also what is the situation with the other free carry interest which I understand is in some type of near bankruptcy ...
I ask most of these questions just from curiosity ... I feel if Broe works I can more or less recuperate my losses here and this would more than satisfy me and if it does not I do not wish to lose more on this .... It has been the most unusual investment of my life and never has my timing been worse ... I may have lost more elsewhere ... but off shore Ireland is what you call an eye opening experience for me... and I thought I knew or understood Ireland a little .... but not at all obviously ....
I would usually share your concern about another PVR farm out , the difference this time is the new seismic technology announced by Pvr which I believe is a major major technical breakthrough that address the concerns I had for 5 years about Barry roe.
This change in technology would be immediately obvious to so many oil companies that its not surprising that one them agreed commercial terms and asked for exclusively to close the deal. All within weeks of announcing the new seismic processing results.
Thats why I think this is real.
Yes Senn you are correct ..... the expression you have about the fat lady singing or finishing to sing is I believe appropriate too .... it is what you refer to as an agreement in principle .... like a couple talking about the possibility to be married while they wait for the pregnancy test results in the bathroom.... nearly there!
What they announced was.
1. Commercial terms agreed
2. Well locations for next wells agreed.
3, period of exclusivity to complete the deal.
To me this looks like they need time to complete the legal documentation which will detail the transaction.
Did they announce this Jimmy?
I thought they had entered into an exclusivity agreement as regards the negotiation of a possible farm out deal ?
I am not writing this to contradict you Jimmy rather I write to seek clarification ..... perhaps you could correct me if I am wrong ... as if they have a farm out agreement subject to "legal documentation" ........ (presumably this would mean "permission from the relevant authorities"? or if not what legal documentation do you think this refers to?)
.... this would indeed make the share more interesting than I view it at present ...
like Caraldo I too have been here too long and have perhaps mixed things up with the earlier potential farmout deals that occurred on a near annual basis in the past ... although I accept that according to you the new seismic data makes that a closer eventuality now ... than was the case with earlier possible deals that failed ....
Pvr announced before Christmas that they have agreed farm out terms to drill the next wells, but subject to legal documentation.
So either there is a farm out or a takeover, either way great value.
As far as i know ,a well will be drilled on barryroe in 2018/19, also there is talk of a farm in soon. I read somewhere on the bullet board that logp as enough money to keep alive till the end of feb.
talks of farm in and data room's have being going on for years,so if there is a farm in the major will want it for very little money as pvr and logp need the cash.
So my question is I own share s in logp ,which are massively down ,and after reading posts from jimmy I am thinking of averaging in ,to get my money back , the data above maybe inaccurate as i am soo long in this share that dementia maybe setting in , So has anyone got any thought s on this ?
Brent oil price $69.15 got to be good for barryroe oilfield and its 340 million bbls of proven undeveloped reserves.
Logp have 20%.
At this ridiculous low oil price lands down are not a take over target.
With regard to the new Barryroe seismic please look up the PVR website and open the barryroe technical update file presentation to the Atlantic exploration conference.
The difference in seismic quality is immense. Previously it was not possible to map the reservoir directly on the seismic and hence it was not possible to identify if there were intr reservoir faults which could compartmentalise the field. Now such faults can be mapped and location of production wells can be placed with confidence.
I believe its a game changer and thats why a company very quickly agreed commercial farm in terms to barryroe.
Undrawn amounts on the loan are sufficient to fund the Company to the end of Q1 2018 and Brandon Hill Capital have confirmed their potential willingness to increase the size of the loan, should it be required, pending the ongoing farmout discussions.
"I believe that the new seismic makes such a huge difference that whoever has agreed commercial terms to farm in will not not to let the opportunity pass, because they will farm in with a great deal, which will still be fantastic for logp ."
when did this new seismic become available, and when was it carried out and what new information does it say about the barryroe field.
I am a share holder in lopg for years ,and i value your posts over the years .but there is a part of me thats tells me ,that this could be more spin
I am equally originally invested in both Pvr and Logp.
The potential upside in logp is far higher in Logp only because its short of cash and the share price got hit hard.
At a current market capitalization of less than £8 million in respect of 68 millions barrels of C2 independent reported reserves is exceptional value, if you believe a farm out can be done.
I believe that the new seismic makes such a huge difference that whoever has agreed commercial terms to farm in will not not to let the opportunity pass, because they will farm in with a great deal, which will still be fantastic for logp .
Standard farm in practice is to be reimbursed for past costs and as logp main asset is Barry roe its likely that most of its capitalized exploration costs of 12 m relate to Barry roe. I expect that logp will get at least 6m in past costs which will solve their financing problems. They are funded by loans at present and I expect a lender will finance them till they get these funds in.
If you believe that a farm which has been announced will be completed then logp represents incredible value.
All the loons are out in force again (not that I'm not, just a more consistent loon).
I was wondering whether you are more in PVR or LOGP? If a deal can get done so LOGP can avoid a fund raise then they have the best potential I reckon. the problem is that they will need to pull the trigger on a fund raise sooner rather than later - if there is no farm out by the end of the month, they will need to go cap in hand I reckon.... Could a farm out get done that quickly?
Jimmy's thinking here motivates me to think big here too.. still a smallish position for me here but open to adding more again as I feel appropriate.. and as my bet has doubled up already so worst case it'll be the houses money I'm giving back..
You are correct about PVR disappointing for so long.
I have been posting about seismic quality for years as being a problem. So whats changed.
Firstly new chairman with solid oil company experience and angus mc coss the exploration director of tullow and within one year they farm out Druid, reprocess the seismic on Barry roe using experts for the problem and within weeks of announcing the seismic they have agreed commercial terms for Barry roe farm out.
In my view the focus has changed in pvr to generating shareholder value and most importantly mitigating risk.
Certainly after the next Barry roe wells are drilled a takeover value of 25p for LOGP £1 for pvr are reasonable targets, way to early for those values now.
PVr have advised that the oil price break even price for Barry roe development is $35 per bbl so at a current oil price of $65 there is a $30 per bbl pre tax profit.
Because the license was issued under old tax terms a 25% corporation tax applies and no royalties. Each barrel produced will generate a profit after tax $22.5 per bbl.
Allowing for the time value of money to discount that to present day values works out at approx $11.25 per bbl.
We know that pVr have granted an oil company an exclusive period to conclude legal farm in documentation. Assuming that the farm in company take 50% equity in the field it will be worth 340 million bels X 50% x $11.25 per bbl = $1.9bn .
So how much will they pay to farm in, certainly they will fund the cost of the next wells valued at $25m plus past costs of at least $80 million.
This still makes a very attractive investment for a farm in company to a field with independent reported undeveloped reserves of 340 million.
LOGP have no money but if a farm in deal gets done they will be refinanced and still hold almost likely 10% of Barry roe plus cash of circa 2.3 p per share and a carried interest in the next well program.
PVR stated that the next wells will lead to a final investment decision for Barry roe development.
If the npv of barryroe is $11.25 per bbl then an acquisition of Logp for $5 per bbl is very attractive. If logp retain a 10% interest in Barry roe worth 34 million bbls thats $170 m or £0.25 per share .
So the current share price does not even represent the cash it will get for past costs when a farm out is completed.
And all because the new seismic made this possible and it has taken only a few weeks from the announcement of the new seismic to announce commercial farm out terms have been agreed, subject to final contract.
This has to be the lowest risk highest reward opportunity on Aim.
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