...so they are letting go of the first Tau-lease, and hope that time has improved until 2025. And they have no cash to acquire anything. I wonder why Delek just dont give away their shares and take a tax loss? They have the money to drill, so if they dont leave, why are they still there?

What would you say about the old Anadarko discovery that GSPE got their hands on a few years ago? Do they still have that lease? That is a conventional play? Could it make sense to develop at these oil prices?

I own Africa oil (AOI.T) that through subsidiaries has a few percent in the giant Venus prospect that Total is drilling right now next to Shells recent discovery in Namibia. Also Eco Atlantic (EOG.V) are huge lease holders in Namibia. A few years ago on an investor meeting I tried to talk the Africa oil CEO into partnering with GSPE, however it obviously didnt fly =)
As I have stated before: wildcatting in Guyana, SA, and Namibia gather lots of interest while safe places like GOM is out of fashion for some reason. MktMvn gave me some answers, but I still find it a bit funny.

I wonder what has kept W&T away from Gspe prospects? Are there so many other prospects, or is it something else? Mahogany is sub salt(?) so they have some experience of that type. Maybe MktMvn has heard something?
Yesterday W&T bought some producing assets in GOM for 47m, and they participated in the recent lease auction. Maybe they are just waiting for Gspe to bleed...
I noticed that both Gspe and W&T has hired Al Petrie as IR. Although I hope hes off the Gspe payroll since no one returns mail anymore.

Ok, I interpret that as GSPE will resubmit the 2020 application when or if they have contracted a rig.

John usually answers: john.malanga@gulfslope.com

MktMvn, are you referring to the application that was filed back in 2020, or did they refresh it?

I think its very weak that Gspe and Delek wont give us any information on the future of Tau2. 2022 seems to be a deadline, and I dont think that Delek waits until license expiration with "Oh gee shall we or shall we not?". I think that Delek must have made up their minds already and they might be looking for an additional partner but its not a make or break. If you want a partner, it would be a sign of strength to any of those if you already declared that you are confident to proceed anyway.
My fear is that Delek is out and that Gspe have difficulties replacing Delek because its obvious that they cant proceed alone. Are Gspe obliged to report any changes in the Delek partnership to the market?

As I stated before, my guess is that CENAQ would want to start off with some producing assets that generates a cash flow. Maybe later they do some wild cat exploration.
Something big must happen before there is any interest in sub salt plays. A Tau 2 discovery could be that big thing. And I think its up to Delek, others seems to be looking elsewhere. Lets hope that Delek are too involved to let it go.

I would be very surprised in a positive way if Gspe got to keep all of their 25%. Back in the days when they made the deal that gave Delek 75% and TXSO 5%, it was considered a very favorable deal for Gspe. They are running out of cash, and any other financing to cover their share of capex would probably be very toxic. I expect no more than 10-15%. If Tau is successful they will of course be in a better position to negotiate if and when they move on with Corvette.



I would guess that the Gspe-team has performed your pitch starting 7 years ago, and I believe that they have turned the industry inside out in search for potential partners ;) Obviously they got the best deal with Delek, and as I said I doubt that the conditions would be better today.
I could add that Gspe seems to have 100% of Corvette, and that they might throw in an option for any partner to take a substantial part in it if Gspe avoids being skinned to the bone at a new Tau2 venture.

I was of course referring to Delek buying producing assets, not Gspe (actually Gspe has placed bid on smaller producing assets according to IR).

I think that the history with the Tau 1 mess up shows a lot of risk. Majors often partner with other majors, so if Delek bought into a mature field they wouldnt have to operate it. Seems like most oilers go for producing assets right now, and the low interest in our prospects doesnt say otherwise. Im just a retail investor and I can only assume that the industry knows whats working for them. I would be happy if we got a second chance at Tau, but while its personal for Seiz (and us?), its only about the numbers for Delek and no "what if we missed this hidden elephant, we could have got x-million barrels and so on..".

Thanks MktMvn. As I said it would be nice if they told us their plans. If they were seeking a partner it wouldnt hurt their position if they were open with moving forward with drilling anyway.
I agree that things probably have changed, many mid/small caps claims that the majors have plenty of producing non-core assets for sale. I think that some posters exaggerate the attraction of exploration, compared to buying producing assets with low risk. Oilers must be wise with their spending since financing seems to be harder to get now days, and I think that they are pushed into renewables rather than oil exploration. With exception from the large basin openings in Guyana or Africa for example.

I would like to see Delek dumping 300m Gspe shares without destroying the share price. Who would buy, retail? It seems hard finding a partner, so I doubt that any serious player would absorb those shares.
Delek simply knows that if they sell, the market would see that they are exiting Tau and that means that there is probably zero value left in Gspe.
Delek is hanging around to the end hoping to find an additional partner, and if its not possible before Tau expires they just write off the whole story as tax loss.
However it would be nice to know if Delek has decided to drill even if they dont find a partner. At least it might calm the nerves of both us and the Gspe management. I dont know if they know, or why they dont let us know. Their IR promised me that there would be a PR "soon", but that was in May. And I guess that some people here are busy reporting on daily oil prices and rig count rather than sending questions to management =)

MktMvn. Would it make any sense for a potential GSPE/Delek partner to secure any additional acreage around the Tau prospect? If they pay to participate in a Tau 2 well they will get some technical and geological data that would be useful in other prospects? And if Tau is a hit their leases would work as cheap warrants.

If those bidders were after sub-salt, they might as well join GSPE at Tau, since most explorers normally go with partners anyway. Of course shallow prospects requires lower capex and enables to go solo, but as we saw at Canoe its not a sure fire home run.
By the way; if there is new interest in shallow prospects, wouldnt the old Anadarko discovery and the Rooster platform be on the radar? Or did GSPE relinquish it? I think that Corvette also has a shallow play?

Yeah, really stupid politicians to invest in free and clean energy from wind and sun! Why get it for free when you can buy it from nice places like Saudi Arabia, or Putin? Lets hang on to oil and coal and see what happens while it gets more expensive and harder to find enough of.
And lets put some fracking into work again flooding the market pushing oil prices lower, that would benefit GSPE right? =D

Is high pressure a guarantee for hydrocarbons? What else could cause this high pressure, other fluids like water?

Thanks MktMvn. I suspect that what we are waiting for is Delek finding an additional partner, otherwise I guess they would have handed back their 75% to GSPE by now (whats the point holding it until it expires?). The Delek balance sheet must have been in a decent shape for a while now, so I just think they want to spread the risks before going ahead with this drill venture.
I just think its odd that this happens in the US, in shallow waters, nearby infrastructure. One could think that the constant never ending search for oil on US territory would involve 400mboe prospects, but no...

yes, because they had to! There was no other way for GSPE to pay back that 10musd loan. And if Delek took 100% of Tau instead, Im sure that Seiz and his operating team would have left right in the middle of the drill.


Since the first Tau drill was a mess and since GSPE as an operator turned that well from a estimated 30musd to a final bill of close to 100musd, Im sure that there could be a few reasons thinking twice before teaming up with GSPE and a sub-salt prospect. That might also be the reason why theres no green light from Delek yet. However I wanted someone with knowledge to answer the questions about GOM and sub salt. Thanks for trying. Lol

Then why why why why are not potential partners storming the GSPE door??? And they never did when GSPE had the leases!

MktMvn well spoken about the importance of plastic.

Another question: Why is there so limited interest in GOM prospects? I also own Africa Energy and they have no problem to farm out a 300mboe prospect offshore South africa without any close infrastructure.
Its obvious that the GSPE founders didnt realize the difficulties getting partners. They have struggled since 2014, and finding Delek wasnt easy. Is it the subsalt-thing scaring partners away?

Well Im impressed that CENAQ got financed since the BOD has slow-dead or bankrupted ventures behind them. I doubt that their first deal will be an exploration venture. I expect them to buy into some production providing them cash flow and then we might see some wild cat drilling later on.
Im not sure that CENAQ key members holding in GSPE are positive, imagine being a CENAQ-investor watching board members using your money to save their own private investments. Especially when its exploration with no granted return.
However as you say its the only potential partner that we know of.

It feels like they cant both buy production and fund their piece of a Tau re-drill. Then they need to get fully carried through the drilling campaign. They are just too late with everything, with oil prices back at the 70s there should be very few fire sales left. Everyone wants production here and now, only major players are divesting for political reasons, and that comes in too large portions for GSPE to swallow. They are just stuck for now in something they never wanted. They wanted to hunt for elephants, and now they are left out in the wilderness eating rats for their survival.
Im not even sure what status new projects are in the business, there are Guyana and South Africa yes. But otherwise its mostly about increasing production in current assets, and use that cash flow to hurry into renewable. A good thing for the planet and all of us, but not encouraging for exploration and the price per barrels of such undeveloped discoveries.

MktMvn, I got some answers from GSPE:

They will know "soon" if Delek is going ahead with Tau 2, and they will PR it shortly after. They dont know much about Delek financial issues, and how hard Delek was hit by the oil price crisis. They have no knowledge about Delek trying to divest their holding in GSPE or in Tau, although it would be normal to size down from 75% in Tau.
GSPE continues to seek other partners if necessary to replace Delek.
Permitting is a non-issue, its all about financing.

One interesting thing: GSPE claims that they have been bidding on a few producing assets, but has not come to any closure yet.

I dont know what to think about that, if they spend their cash on an acquisition then they have to get fully carried through a Tau re-drill. Or maybe they dont believe it will happen.

I really wish they could tell whats holding them from go ahead. They say that they are going to drill in 12 months, but have they made any final decision? I guess that Delek hasnt given the green light yet. I think its time to contract a rig by now if they mean business.

GSPE only have offshore leases?

"The senior management would mostly remain intact" well great for them to get stock options, while other shareholders get chicken sh*t to jump the ship. Cause chicken sh*t is what we get if there is a take over before any reasonable financing and drill plan in place for Tau 2.

Delek should have made up their mind by now, are they in or out!???

Then why didnt he raise 150m for Gulfslope?

However, will be interesting to watch even though Im very skeptical.

Well it sounds a bit like GSPE could be a target. However we should wait and see if the Cenaq IPO will get real. I just dont see those guys pulling off 150m without any prospects (?) and their track record. The CEO from the bankrupted Freedom oil and gas (Freedom and debt dont rhyme very well), and Chairman from GSPE and TXSO. Why should these guys get 150m while GSPE hardly got anything when they had all their prospects?

At least the Chairman learned from GSPE mistakes that you need to raise a large pile of cash before you start a new venture.

I wish they were bold enough to tell us the truth about whats going on. They blame Covid of course, but is it covid causing low oil prices or covid causing slow administration and lack of equipment?
Are they moving on with Delek or are they looking for others?
Now we have oil price at 60usd despite covid. Its time for new "bold" excuses!

Didnt GSPE have an option to buy the Rooster platform and the VR 376 lease G36357? Or was that something else?

Do you expect someone to tell you about potential inside information? Im grateful for your work though. Have we ever seen this volume on a single day before? It did not happen when the Delek-JV was announced, and the board is not crowded with random pumpers yet. It could be something, but risky for most people to accumulate on inside-info.

Its probably a short squeeze. There was a technical consolidation just around ma50, and the Kosmos-news could have been the lit that set fire to the outbreak. It doesnt take much money to move this share. I dont know what shorters think about penny stocks, is it worth shorting a stock trading below its cash position with an tiny average daily volume and a huge spread? No one can do it with serious money. Also it would be stupid to buy this one on insider information, since it must be quite simple to see whos buying big?
I also noticed that TXSO is up, and thats funny cause they dont have any assets in the gulf anymore if Im correct. They got 10% of Corvette in a settlement with GSPE, but GSPE then returned that lease to the government. Also TXSO is out of money.

I see it from a technical pov. Ma50 was a resistance for a long while, then it became a support. Then with the rise oil price there was some fundamentals for it to test Ma200.
0,10 also seems like a resistance.

This is nothing to put time and effort into, GSPE is all about what happens with Tau. Hopefully maybe some of the Kosmos-partners will glance at it if Delek pulls out.

If short term oil markets are crucial for GSPE to get going, I hope that this will happen:

Oil demand picks up as Covid let go of its grip on world economy and the lack of investments in the oil sector during previous years starts to show. I also hope that the new administration cracks down on shale! Not only are shale an environmental disaster, it also lighted the pricing war with Opec both in 2014 and 2020 that has hurt GSPE bad, and its competing with GSPE for the institutional money! Thanks to shale, institutions dont want to get burned on oil again. Shale has only been a disaster for GSPE investing in conventional oil. I dont know why you guys are so afraid of tougher environmental regulations, because its main purpose is to hit on the dirty shale disaster. And that will benefit GSPE who operates at sea far away from people in a conventional, historical and safe (with reservations for the BP spill) industry. But maybe you guys likes price dumping with opec and shale gas in your drinking water instead of a clean environment and GSPE selling conventional oil at 100usd/boe?

Such fluff mumbo jumbo, not a word about Delek and the actual issues. They talk about Covid having an impact on their workforce jada jada. I think that the truth is that GSPE are drill ready and has been since a year back, all the paper work is done and they are just waiting for a partner. Its not a good sign that Delek has to wait until oil prices improves, this is exploration and larger companies has long time oil price forecasts for such purpose. Are they in or are they out!?
On the other hand they state that they need 10m for their part of the drilling, that implies that they have a partner.
And yes their 2021 drill campaign is "delayed", I did not know that they had a 2021 campaign, as far as I know it ceased in early 2020 when Delek decided to take the insurance money instead of drilling Tau. I dont see any drill spinning in 2021...

Maybe it takes more cash than they have on hand, and doesnt promise 100% success? And if they throw money into it, they have zero cash when/if Tau 2 returns from the dead.

Has anyone heard what Deleks plans are going through this crisis? Obviously they have some focus on paying back loans. And usually you 1. pay back loans 2. cut exploration costs 3. allocate capex on increasing production at current producing assets. Have we heard anything about the last two steps? Maybe that could give us a clue on what priority their GOM ventures have as exploration assets. We know that there has been no mention about it for a while in presentations, but have they mentioned any other exploration targets?

All I can prove is that Im 99% in red on my investment and that I would have a significant amount of tax losses if I wanted to use it. A modest guess is that the same goes for many of you other guys? =)
My other guess is that this year we see a lot more tax loss selling since there is no longer a plan from GSPE on if and when Tau 2 will happen. So investors probably dare to be without their shares during Dec/Jan, or maybe they are simply tired and out for ever.
Does retail do naked shorts? Shorting one million shares would still be pocket money but yet risky when it is close to new year, there is low volume, and investors who might wanna buy back their tax loss shares. If I were a shorter I would do it earlier in the season and cover it at this time around.

"naked shorts" and "somethings up" zzzz, this is just tax loss selling and there is plenty of losses here. GSPE can only sit tight, be very careful with their cash position and hope that someone wants to drill Tau 2 before their lease expire. Caution, this could be like watching paint dry!

Did anyone see if any of the old prospects that GSPE dropped a while ago got new owners at the auction? Or maybe these prospects were not up for sale?

They still talk about doing acquisitions, I consider that fluffy. Do they expect that their 3musd will provide them with an asset that in one or a few years will make enough cash flow and collateral to drill Tau 2? They were talking possible acquisitions since 2014, and if they had done it back then with 100musd market cap they might have had enough cash flow by now to stand steady. Its a little bit late.

And what do they mean by "additional partners"? If Delek wants to get rid of their 75% in Tau then they have to find a buyer themselves. If Gulfslope gives up a part of their 25%, they still need Delek taking their 75% of costs, or else nothing will happen. They have like one other license left, and I dont know the expectations on that one.

In the release we also got prof that the final drilling approval was dependent on Gulfslope first submitting a spud date. Not the other way around.

Again: this all depends on Delek and their plans, still not a word about it in the release.