With the next fireside chat this Friday at 2pm I'm guessing that we'll get an RNS update later this week.
As the Saipem rig is still near Sidi - and not doing anything - I'm hoping we'll get another drill (& a paying partner announced) there, before it heads off for the next Tendrara drill in circa March/April.
day cos I CUT MY THUMB PICKLING MY ONIONS but I then read this laterin the day
A man was working on his motorcycle on the patio, his wife nearby in the kitchen. While racing the engine, the motorcycle accidentally slipped into gear. The man, still holding onto the handlebars, was dragged along as it burst through the glass patio doors.
His wife, hearing the crash, ran in the room to find her husband cut and bleeding, the motorcycle, and the shattered patio door. She called for an ambulance and, because the house sat on a fairly large hill, went down the several flights of stairs to meet the paramedics and escort them to her husband.
While the attendants were loading her husband, the wife managed to right the motorcycle and push it outside. She also quickly blotted up the spilled petrol with some paper towels and tossed them into the toilet.
After being treated and released, the man returned home, looked at the shattered patio door and the damage done to his motorcycle. He went into the bathroom and consoled himself with a cigarette while attending to his business. About to stand, he flipped the butt between his legs.
The wife, who was in the kitchen, heard a loud explosion and her husband screaming. Finding him lying on the bathroom floor with his trousers blown away and burns on his buttocks, legs and groin, she once again phoned for an ambulance. The same paramedic crew was dispatched
As the paramedics carried the man down the stairs to the ambulance they asked the wife how he had come to burn himself. She told them. They started laughing so hard, one slipped, the stretcher dumping the husband out. He fell down the remaining stairs, breaking his arm.!!
"WTI $56.69, Brent $62.20 +73c, Brent $62.20 +98c, Diff -$5.51 +25c, NG $2.76 -16cFurther signs of a bounce back from crude oil yesterday as markets thought that the immediate past of a shake out had been overdone, and so it should. Not much ..."
Love your enthusiasm and I think your methods are far superior to those of our well informed Billyfish
BF - Seriously, thanks for your knowledge and insight. Provides a layman such as I with much food for thought. Still long and strong with SOU though and have faith that JP genuinely had our interests at heart.
Hi BILLFISH, as always, lots of speculation here and even more on the lse board. As you know I prefer to keep an eye on the less complicated way of research,and trust much more old fashioned methods.....
The pendulum is still very positive around 8 to 12 months. SP was £3.60 ,now £5 ish. Tarot says success will come but not at the high figures being mentioned. Runes good also, £5.00 ish I think. I will look again in one month. DYOR etc
I believe JP was reported to have said he would be looking for sale price of 4 figs ps, admittedly before aerial gradiometry and 2D seismics. Perhaps as data comes in and is analyzed this could change. Good question for next fireside chat - is that confidence still intact?
Many thanks BF for such a thorough analysis of what Im sure is the key question given that JP has hinted at a sale before the end of 2018, lets say with 4Tcf by drill and 15-20 Tcf by seismics (unless the P layer is more bountiful than we dared dream.)
This is a complex question with many variables which we know nothing about.
I have been trying to chip away at JP over time to get some insights but he keeps his cards pretty close to his chest.
One of the things that determines the value of the gas is its end use. Is it purely thermal,i.e. for burning only, or can it be used further up the value chain, for example as feedstock for petrochemical plants for instance.
You can see how much capital is being invested in bringing the gas with the correct composition(ethane) into this plant. What makes this investment stand out is the fact that the pipeline bringing the North Sea gas from StFergus terminates right beside this plant, yet the economics of the petrochemical industry makes it more cost effective to transport gas from Pennsylvania.
We haven't been told much about the composition of our gas other than the gas at SM is a bit stinky and needs investment to remove some H2S. Nothing has been mentioned about the composition of the Tendrara gas.
Initially I believe we are going to sell it for thermal use. However , we as the current owners, need to think 10,20,30 years down the line, and determine what the value of the gas would be if it could be used by the new owner further up the value chain.
You also have to figure on how many shares will be in issue. Right now we are just over a Billion shares at 50p. Do we have enough capital to do the job right?
I am not so sure on that one.
Once the seismic data has been analyzed we will be in a better position to understand how we go forward. I do not subscribe to the view that you can sell the seismic data over an area the size of Tendrara for what JP hopes to get. Smaller areas -- yes, but over our East Moroccan assets, I would want the comfort of a calibration well or two to verify the results before I wrote the big cheque.
The local price of gas being obtained by SDX is in the $9-$12 range. Bigger customers get a discount taking them to the lower end while the smaller guys pay the top end.
Imported bottled gas is a bit dearer at $18.
These are the retail prices. JP will be selling at wholesale to a company that has to invest billions in new wells and infrastructure to realise the worth of the asset.
For me though the biggest determinant will be political and how the local government decide to use their new found bounty.
It would be easy to go hell for leather and replace all the imported gas, to take over the Algerian contracts in 2021, to expand exports into Europe.
That would produce a short term boom but deplete the reserves at the fast rate and they would be back where they started paying big bucks for imported gas.
A better long term use of the gas , to my mind, would be to use it as leverage. The long term plans are to build a pipeline from Nigeria for gas and develop an LNG import (maybe export) facility.
These facilities will require long term gas supply deals to be struck. As long as you have an abundant, competitive supply of local gas you can negotiate keener deals.
The alternative is the $18 they pay at the moment as the importers have them over a barrel.
This approach could mean that the government imposes limitations on the new owners which would be reflected in the price they are willing to pay us.
Then there is the view that the potential new owners take.
This link shows that view from the perspective of Shell, who I think would be one of the interested parties.
Would be interested in your thoughts re value of our Tcfs proven up during 2018 by drill (the fabled £1 per Tcf) or by seismics (with CPR verification), which together would give a range for our final sale price. Well probably have 3-5 Tcf by drill, the big unknown seems to be the value of seismic Tcfs.
I would think the 2D seismics would be hugely important in siting our 3 drills in Tendrara, avoiding the tight sands that resulted in poor flow last time.
I understand where you are coming from. I recon the west coast assets could be worth more Tcf for Tcf as they come in smaller accumulations than the Eastern assets.
The 10 year tax holiday starts from first gas , so smaller pools enable more gas to be exploited tax efficiently compared to the larger pools on Tendrara.
Set against that the western assets have not insignificant volumes of H2S which equates to cost to clean up the gas. I have been trying to get a handle on this but JP is keeping pretty tight lipped. I think as soon as the company open up on the H2S costs then the market will come to appreciate the tax advantages of the smaller gas pools.
There is also a 9 well drilling campaign being conducted by SDX. They are on their third well now. They are being hooked up to their production facilities fairly quickly which is expanding their wallet pretty rapidly. Spring could see them ready to either take on or at least participate in new assets in Morocco.
Spring could be looking quite encouraging for us alongside the seismic news from the East.
I don't know about that.
If Range manage to relist when they said they would ,at the Market Cap they proffer on their application, and also deliver the SP on the 14th that the last company sponsored broker note promised ,then you would be looking at a 1200% uplift in 24 hours.
I think we both know that neither of these events is going to happen!!!!!
What is more likely though is that the intensification of fiscal apartheid due to arrive next week will elevate the value of your losses provided your tax code starts with an "S" ,which I think yours does.
You forget where we are in the calendar year.
We are in the month where the financial services industry collectively clean out their wheelbarrows in anticipation of collecting their hard earned year end bonuses.
The month where fund managers show amazing fiscal dexterity by applying the lightest of touches to their portfolio and producing massive spikes in price on the day their funds year end value are calculated.
It is not called the Santa Rally for nothing.
Much better to judge the SP in the New Year where the Spring Rally tends to be a more measured and sustainable phenomenon.
no pun intended.... At least the markets seem to like it and for now that is important for us.
On paper the figures look promising but personally I wont be getting over excited until we have some income from these potentially good figures. (Memories of the 2 major failures in Italy, monty and badile lurk at the back of my mind) so until I hear the words, "revenue" "sales" or other monetary references I have all fingers and toes crossed.
However todays news does Sound promising long term..... GLA
"WTI $57.30 -69c, Brent $63.11 -50c, Diff -$5.81 +19c, NG $3.18 +5cOPEC day today, so we are in the land of guesswork, yesterday's modest fall was in response to the speech by the Saudi Oil Minister who was corralling the Russkis to sign up for ..."
I am surprised at the barely warm reaction to this mornings RNS. I found it rewally very comforting to say the least.
I appreciate the words of caution that completed the announcement but as everyone knows, who invests in exploration companies, the actual production figures are all that matters.
However, in my opinion, the Sound Team have not misled us in the past and I have no reason to doubt the findings of this RNS. Even if just the lower estimates prove to be correct, I believe that this will be a very successful company and will show a good return to the shareholders.
JaM......Perhaps they never moved from the fireside after the first fireside chat? The news and data was just so pheckin good they merely filled their glasses and pressed replay.
"Break out the cheroots James old bean, there's a good chappie....(hahahaha.....)" "These posters on iii will be debating this for months and arguing among themselves (chuckle chuckle chuckle)" "In the meantime we can scoop up some more cheap shares and dish them out down the club, what, (hahaha), jolly good show old bean. (chuckle chuckle chuckle)"
Come on Justa..... get with the gig man, we repeat everything on here, value for money and all that.
Quite a lengthy session and very positive, all typed no voices.
There should be a link to it on the Sound website
The highlights, IMHO, were:
BM: Aerial gradiometry results "very exciting" and helping to navigate seismic programme.
CPRs for seismic programme released in phases: end Q1, Q2 & Q3.
BM: gradiometry & seismic helps us delineate the depth to basement and the extent of the source horizons in the paleozoic. we don't expect any change to our 31tcf basin estimate.
JP: Saipem rig is sat at zero standby rate near Sidi. It would take about 22 days to mobilise it back to Eastern Morocco.
JP: Sound opening a new play in Eastern Morocco. "Scale of upside is huge"
BM: the recent RNS wanted to focus our attention on Paleozoic.
JP: Sidi seismic won't be until post summer 2018.
BM: quality of gradiometry results exceeded our expectations & the dat allows to better predict prospectivity.
JP: Aerial gradiometry has already started to derisk the paleozoic.
BM: previously unrecognised subsurface features largely in paleo but interesting features in Tagi too.
JP: Saffron/Coro deal likely to be completed early next year.
BM: the 3 previously announced drill locations are unlikely to change.
JP: the goldilocks zone with seismic completed and a few more wells drilled - "this zone is around the end of next year to my mind" but depends on results of seismic & drilling.
JJ: the gas price SDX has achieved recently in Morocco is a positive.
JP: We have considered consolidation with Schlum in some depth, but can't comment further.
BM: first phase of seismic (around A structure area) should have been interpreted by end Feb. If all goes well plan is to then update the (7/17/31 tcf) petroleum systems model.
BM: the gradiometry will particularly enhance understanding of Anoual (where data currently poor).
JP: gradiometry outcome very positive, showing clearly the paleozoic basin structure. It "confirms the path we are on"
BM: "still excited"
JP: the team were negotiating infrastructure funding arrangements this week.
BM: will finish processing aerial gradiometry mid Dec
JP: Sound increasingly dividing into two parts:
high risk, high reward (exploration);
Large scale, low risk (development).
BM: Schlum "very positive" about gradiometry & seismic.
BM: We have already identified opportunities in Anoual.
BM: planning update on Eastern Morocco drill timings in December: Next spud likely March or April.
JP: Gradiometry results will be RNS's in December.
BM: Sidi seismic would cost less than $10m; "highly unlikely we would pay for it ourselves"
JP: Algerian gas is priced b linking to a Brent index.
JP: Signs that oil & gas sector is picking up recently. "difficult to predict but 2018 could be a rather interesting year for our sector and for our company"
BM: we've bought all the equipment to undertake Koba (Sidi) EWT.
JP. the licences surrounding our Eastern Morocco acreage are held by Shell & Repsol on the Moroccan side & Sonotrack (?) in Algeria. Some of these licences have recently been upgraded to full which triggers commitments & work program,mes.
JP: selling the business is not a challenge - the challenge is doing it at the right price. "My job is to guide you as best I can of when I believe we will hit the goldilocks zone - I currently believe that to be end 2018 but it may come earlier."
JP: we would like to keep a small % of the Tendrara pipeline: "I want a veto on who uses it". Pipeline returns aren't our proposition for investors.
Saipem rig will stay in Sidi until "it is finished"
JP: It may be used in Sidi first "can't be explicit at the moment - this should become clearer in due course"
JP: We are focussed on onshore Morocco. I do not exclude further onshore acquisitons in Morocco (Luca has been dedicated to this for the last 6 months).
JP: short term newsflow:
completion of gradiometry
completion of seism
I rest my case. The pilot and his secretary were obviously speaking out loud whilst typing up the Grad results and were overheard.
The rally in sp on Wednesday afternoon was likel;y to have been the boys and girls from down the "club" topping up with cheap shares.
Whilst still good news the typical pattern will be for a wee slide before a slightly larger rise north. This is, IMO, the perfect opportunity for any one with funds to be considering a top up.
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