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You guys are both assuming that 2, 3 and 4 will be developed. So am I or I would not be here, but there is certainly some risk they won't be developed. Maybe SNP is waiting for a clear commitment from Total before even considering a buy out. They and other Chinese entities are buying mostly proven reserves. Why pay large amounts for something that is a possible bust? They may have to pay more later, but then they know better what they are getting. The risk of no development may be low, but if it does not happen, SNP officials would be in a very bad position with the central government if they paid billions for a bust. I don't right now see a compelling reason for a buyout from SNP or any Chinese entity. Particularly at Offer's price that we all assume is at a major premium to the market. At some point further down the road, I think Krom's numbers will come into play, but not yet.
Our current share price says it all. I think Total will commit to block one development in the next six months to a year, but who knows when for our blocks.
db
Thanks, not very close, it looks like hundreds of miles, at the border of Gabon and the Congo. Still, any GOG presalt is going to raise the temp. Hope they are successful.
db
That is OPL 240, I have that one. I was asking about the Gabon pre salt prospect that HP posted about. Gabon, as you know, is just east of our EEZ block 11. A pre salt play close by would certainly be of interest to us.
From HP:
" GoG News: 25/11/2010 - Harvest unearths targets off Gabon (Africa Oil and Gas) - 64 (aog v13-23 25november-text____0026)
Harvest Natural Resources has pinpointed its first target in a potential two well programme off Gabon in the first half of next year.
The US independent (formerly Benton Oil) took over the Dussafu Marin block from Sasol in 2008. It is targeting sub-salt prospects after completing the processing and reprocessing of 1,330km of 2D seismic and the pre-stack depth reprocessing of 1,076sq km ..."
Probably against the rules to post anything positive here, LOL.
db
Thanks HP,
Would like to know how close that is to our block 11. Here is another nibble around our periphery, note CVX and Total involved.
from African Oil and Gas:
…and rare Nigeria deep well
Chevron is planning what is currently a rare deepwater wildcat
in Nigeria.
With the Nigerian upstream still pretty much stalled as operators
wait to see a new system in place the US major is planning
a well in OPL 247.
The highly prospective block neighbours OML 130 which
contains such discoveries as Akpo and Egina. OPL 247 is on
the border with Equatorial Guinea and is operated by Chevron
with a 40% stake while Total has 36%, Heritage Oil has 10%
and NNPC holds the remaining 14%. The block is around
150km offshore southeast Nigeria in water depths of 3,281-
4,922ft (1,000-1,500m
db
" are you really ok with all of this???"
Nope. Just trying to be rational. I am really not interested in all the wild scenarios, for or against. Endless fault finding, seeing things in the dark, and drawing wild conclusions, are all just plain silly. We are going to the AIM, we will get the new ANSAI report, probably including drilling info. If not then at least the conservative interpretation. Probably in the next few months. In March we find out about phase 2. Management is communications challenged, but will probably not affect outcomes much. We are in the hands of SNP, who have at least hinted we are commercial, and Total, who clearly is going to develop block one.
I think 2,3 and 4 will be developed eventually so I am staying invested. Management is what it is, and that is not as bad as they are pictured to be here. People are over the top with "material events" going to the SEC, conspiracies to take us private etc. Frustration and lack of patience are breeding silly posts.
My ignores of the complainers are back on, except for Middy, who provides on occasion knowledgeable insight. Should be easier to read. But I WILL be sure to answer all of his correspondence, LOL.
Because of Homeport, kownski, and some others this remains a great board. Though it requires a good pair of boots, to put it mildly.
db
"There will be a simple explanation in the next few days..."
Who said that?
Let's move on to the next made up crisis that is management's fault.
Lots of ridiculous posts here.
db
"There will be a simple explanation in the next few days..."
Who said that?
Let's move on to the next made up crisis that is management's fault.
Lots of ridiculous posts here.
db
Ha!
And we will try not to confuse ideal purpose with reality.
db
Ha ha,
The " b*tch alot" award used to routinely go to strass, but he has been pounded into the dust by Midtier.
db
And same to you majicathome.
db
Thanks Homeport,
Your post makes wading through the uh... side tone here worthwhile.
db
That was my guess, we may know something when the PSCs come out. Or it may just be that demand was anticipated as weak. Hope not.
db
Homeport,
If I remember correctly, some representative from STP had said they would purposely keep signature fees low to speed entry and development of the EEZ. Sorry, no link.
db
BBDCs? LOL
db
You must be kidding.
One of the most attractive things about HDY is its small market cap, and the likelihood that it might meet or exceed the .7 billion in the run up to drilling. ERHE hit .7 billion based on the PSCs and might have gone higher and be higher without the investigations. There are clear lessons to be learned from both stocks. I certainly look at market cap, particularly in comparing the two.
db
Ha ha Stress,
You are doing it again. Our market cap reached over seven hundred million dollars. Which translates to an HDY share price of over six dollars a share. Not there yet.
db
TopShelf
I just can't understand why you and others that are so profoundly dissapointed in your investment don't just move on. If you can't see a future return then you are the one that is ridiculous to stay invested.
And "We will be out of money VERY SHORTLY" is a also stupid, unless you consider four and a half years at the current burn rate " VERY SHORTLY". Plus whatever they can get for the shelf registration and the EEZ partnership agreements. The least of our problems is running out of cash.
It is hard to believe that you are so confused about things. Maybe if you concentrate?
db
TopShelf,
Perfectly good reason to sell, why hang around?
db
mz157,
I agree the AIM listing is unlikely to boost the share price by itself. I am however, looking forward t0 the info that will be released with the application. Weeks may be months but it should be released in the next few months. Without another extension, the EEZ auction should end on the fifteenth of this month, and bidder information should trickle out with awards, giving some sense of the value put on the area by bidders. The lack of response to Middi's letter is unconscionable and frustrating. A clear mistake on management's part, but not the end of the world. And eventually we will get partners for a carried interest in the EEZ. That also will be an indicator of the value. It will be interesting to see how much we have to give up for a carried interest.
Finally, the world is headed for an oil supply squeeze. Whether one believes in peak oil or not, the cost of recovery is going up, and the demand is rising with or without a US recovery. As we continue to move out of this recession cycle, energy resource values will rise, perhaps dramatically.
db
Yes,
But at the risk of repeating myself, it gives a MUCH clearer picture of where we are than the carping here.
db
Thanks kingpindg,
Certainly gives a much clearer picture of where we are than the incessant fault finding on this board.
db
LOL LOL,
Sorry Strass, repetitive complaining is not a sign of integrity. You do say some silly things.
db
Ah ponzi,
You do work HARD for your money.
db
Kownski,
Thanks again for sharing your knowledge. Never did much with earth sciences, but I understand the physics. Basically there is an inverted U shaped trap with gas on top, then condensates, then oil, then water. If there is sufficient gas and you drill the center you get only gas. So if there is oil it is down the sides of the inverted U, the anticlines. That has always made sense to me.
The only hook in all this for me is the statements about biogenic gas. If the gas cap is above oil and generated by vaporizing separation from oil, shouldn't it be thermogenic?
Gets us back to needing the details of what they found.
Is my understanding correct?
db
It would be VERY interesting to see if any of the minnows pony up and continue. That would be a very strong indicator that commercialization is coming in that block.
db
Krom
"I would love to know what Panoro's share of the costs were going to be for Phase 1, and then I would indeed be able to calculate the metric cost + $1 buck and then know the entire value of the JDZ based on that metric."
One could estimate by assuming their cost is proportional to their percentage, and that drilling cost is about a million per day. Probably have to add a couple of days for moving and setup. And perhaps end of drilling analysis, no clue what one would add for that. Probably have to do each block, as block 4 had significantly higher drilling costs.
Might be fun, but probably not to useful, because the rights are more valuable to Sinodax/Total, as the only companies that can make it all pay at lower cost because of location and infrastructure. And they will acquire the rights for zip.
db
Yes.
Do you agree phase two is pretty much a lock and the delay is to force out the non carried low cash minnows?
db
Mz,
So you believe that the minnows are leaving because they have not paid phase one drilling costs. It would make sense that payment would be due prior to entering the next phase.(phase one costs are known fully only at the end of the phase) Panoro obviously is in no position to pay for anything that won't give immediate returns. Makes sense, but as always with this investment we don't know for sure that is what is going on.
At any rate it puts a maximum risked current value on block 3. Exploration costs to date plus a buck. Otherwise Panaro would have sold rather than relinquish. Excludes SNP/Addax and probably Total as buyers because at least SNP and Addax will get the rights anyway.
There you go Krom, a max risked value metric, probably works for all the blocks, assuming all the leaving minnows are relinquishing in like fashion.
It also locks in the end of the phase, minnows would not leave if they could put off payment further, IE another extension of phase one. And the delay going to phase two is just settling the disposition of all the minnow's rights. And taking the time to force them out.
One more argument that phase two is a lock. If one assumes the minnows were allowed to pay at the end of the phase rather than pay as you go. It would be nice to see something in one of the contracts that lays that out.
Actually the fact that they are all leaving now, after the first extension of phase one, pretty much makes it a lock that they did not have to pay as they went, and that phase one is over, they are leaving because they have to pay now. Ha ha. The whole industry knows we are going to phase two and we are waiting for an announcement.
The above makes perfect sense to me, but I am still on my first cup of coffee.
Comments welcome.
db
What all that means to me is that nobody puts enough value on Panero's share to buy out their position and pay the coming share for further exploration . We will see if SNP or Total picks up their share and moves forward. This is apparently the pattern with the other small players pulling out, no compensation.
It is quite possible SNP is gaming the small players, but they supposedly have info on drilling results. Perhaps not the sophisticated analysis that SNP and particularly Total are capable of, but the raw data at least.
All things are possible, I suppose, but what we know is companies are leaving with out compensation. Not a particularly good sign.
db
After making 10 million last year, Panoro has lost 9 million this year to date. They are selling and farming out assets to improve their balance sheet. It is clear that return on further investment in block 3 is to far off for them to spend the money.
My question is if 3 has any value, why not sell their percent. They make a flat statement that they will relinquish their rights at the end of phase one. Does not sound like the block is worth much. Unless there is some restriction in their contract saying they can't sell, which seems unlikely to me. Sounds like no one wants to buy it.
Some body tell me I am wrong please.
db
The rationale of course is that they have a significant advantage in Nigeria, and marginal fields appear to be presenting real opportunities for indigenous companies. Though ERHE is not technically an indigenous company, it has real connections in Nigeria and at least familiarity with STP.
That said, I must say that I agree with you. And I am not sure I like the idea of diversification elsewhere without some indication of better communication and execution.
db
"I hope so, but the updated NSAI report will not include the Phase 1 JDZ drilling results."
Why do you think the new NSAI report won't contain phase one drill results? I thought that was the reason they could change their estimates. Why would they not include the latest data?
Thanks,
db
Thanks for the reminder. I reviewed those posts and also looked at some later dated spread sheets from Quest Offshore. No change in reserve estimates or in what was found. I will bet dollars to donuts that the NSAI report shows condensates in Kina.
db
I finally had time to look at the Quest Offshore Data Base referred to in farrel90's post defending the commercial viability of Block 2.
(thanks farrel90) This is the link he provided"
http://www.questoffshore.com/Home/HelixEnergySolutions/Data/SubseaForecast/Quest%20Subsea%20Database%20-%20Forecast%20Projects%20FEB%202010.XLS
Line 100 is data and and possible development info on Bomu in block 2, line 109 is Kina/Kina South in block 4 and line 110 is lemba in block 3. These were last modified 10/20/2009, before Malanza and Oki East were drilled. According to this spread sheet, all three found gas, and Kina found gas and condensates. They give estimates of reserves for Kina/Kina South in the amount of 458 for oil and 1000 for gas. I am guessing the units are million barrel of oil equivalence, but don't know.
They predict all three are possible FLNG type developments with contracts let in 2014 and executed in 2015. They list all three to have horizontal tree manifolds if development takes place, whatever that means.
A lot of this is industry guesses to let subcontractors predict when and where bids are going to be made, I don't know where the drilling info came from, but they apparently had it on 10/20/2009, shortly after these three wells were drilled. Probably through unofficial channels which ERHE can't use. They also apparently can't predict, but Quest Offshore can, and did. Would love to see their data on Malanza and Oki East.
GAS AND CONDENSATES IN KINA.
If this is true(I think it is) we have been deliberately led astray, more likely by SNP, but others come to mind.
Konski, take a look at this stuff when you get a chance, It may make further sense to you.
Thanks,
db
Hey Stress,
"or everyone as part of a family emergency disaster plan. As many saw in San Bruno, California last night when a community exploded, the value of our products and services can be significant."
Are you starting to get a clue as to how FOS this guy is?
Do the weekly pump PRs raise any concern at all? You said you would make money big time by the end of the year. Three months and 15+ days and counting. Lots of BS, yes. Earnings, NO.
Good luck,
db
Balance,
There have been enough hints about blocks 1-4 being developed as a unit to make me think it is likely. And it is clear that Total has the knowledge skill and infrastructure in place to be far and away the most likely developer. Their buy in to block one pretty much confirms they will be the developer of 2,3 and 4 if the prospects are as we think.
And to match their operating percentage in Akpo in a single transaction, a purchase of ERHE or our block 2,3 and 4 rights is simplest way to go. I don't see a better way for them to cobble together a sufficient percentage to proceed as operator.
My only question is timing. It seems that Total will continue with Egina, then Egina south, then blocks 1-2 as a minimum together, then add 3,4 if they are not in with 1-2 development. However, the only incentive I can see to buy now is to avoid a higher price later. I am not sure they won't just wait until phase 2 drilling is done and analyzed.
I must say though that I would love to see a buy in/out in the next few weeks.
db
Most of the minor players, especially the non carried minor players, will be bought out. Any major release of positive info raises their value of course. I think perhaps Sinodax may just be keeping their future costs down.
Big company though, maybe Krom can pry some info loose. If not, they have to answer their deadlines for phase 2.
Sooooon.
db
Complete horse pucky.
Blatantly illegal. This is a US exchange traded stock. Hundreds of stockholders would sue. It would break the perpetrators, and or put them in jail if they ever entered the US. British exchanges have similar rules. This is a red herring, usually brought forward by people looking for a lower entry. If Offer were behind it they would lock up his shares.
Give me a break.
db
Complete horse pucky.
Blatantly illegal. This is a US exchange traded stock. Hundreds of stockholders would sue. It would break the perpetrators, and or put them in jail if they ever entered the US. British exchanges have similar rules. This is a red herring, usually brought forward by people looking for a lower entry. If Offer were behind it they would lock up his shares.
Give me a break.
db
Dr J,
Reading between the lines, it would not surprise me if they issue some kind of a PR on this subject or have another in the works that would preempt this. DK is implying that he can't telegraph a PR in an email, with which we would all agree. Although I also have been disappointed in management of late, it is hard to imagine them not at least looking into this revelation.
Probably optimistic on my part. Time will tell.
Thanks for the communications effort.
db