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Fuelling The Dragon - China's Growing Appetite For Oil
Friday, October 22, 2010
As one of the world's fastest growing nations, China needs energy to fuel its expansion onto the world stage. After all, it has bona fide plans of becoming a global economic power over the next few years. In light of this, the continued rise of the Asian nation remains pivotal to global oil demand. China may continue to sit behind the gas guzzling US at current, as the world's second largest consumer of oil, but it is certainly playing catch-up.
Indeed, China's oil consumption is growing by 7.5% on a yearly basis and an incredible seven times faster than the US. And this trend is showing no signs of slowing: Chinese crude oil import rose to a record high last month. According to Chinese trade data, 5.683 million barrels per day (bpd) of crude were imported in September alone. This strong Chinese demand is setting 2010 up to become the second strongest year for global oil demand growth over the past 30 years, according to Barclays Capital forecasts.
It is taking a lot longer than first thought, But there must be one hell of a Hydrocarbon Kitchen in place.
Sneak
Krom: The .5% and 10% shareholders are restricted from selling in the open market or private placements. If the company is sold and the company delisted it does not effect anything. In order to get around the restrictions and stay listed, The company has to purchase a % of a company that has a revenue stream that meets the unrestricted shareholders requirements. Hence the Marginal field plays they are looking at. On the other hand, Any offer that may have been in play must have been to low and now the company is Hunkering down for the long Haul!
JMO, But WTF Do I Know.
Sneak
Krom: It would seem that they are removing another obstacle to any deal that may take place.
JMO
Sneak
Oh, How Truthfully Sad!! We are nothing put Mushrooms, Held Captive in the Dark!
SNEAK
em: Very Funny Indeed! I like to refer to them as the West End of an East Bound Mule!
Sneak
Southerman: Your response is Well Thought, Insightful, Constructive and Helpful Dialogue. However that type of Invisionment will not work here as this board likes Gloom and Doom Crack Pot Conspiracies that talk about how everyone is going to be Ripped Off!
Thanks for the Input. WTF do I know, I am just another Postive Thinker, The Glass is Half Full!
Sneak
Krom: They sold shares to R & R because of the Letter, BOD'S way of saying Take That! Middy! LOL
Just havings some fun.
Sneak
Condor: The original prospects in the JDZ were thought to hold 10 to 14 billion barrels of hydrocarbons or a 1.1 billion barrels per block average. Then the NSAI Pre-drill report claimed only about 654 million barrels average for the best blocks. Now after drilling it seems that the number has been cut in half again! Oh How Shameful this BOD are conducting themselves. Like an Ostrich, They have their heads in the Sand. As Frustration Builds, This Investment play feels like a broken shutter flapping in the Wind.
Have a Great Weekend.
Sneak
Old Danny Boy would not tell the Truth, Even If It Sounded Better!!
Sneak
Seek: That looks like the same type of transaction that took place with AXC and SNP. Purchase all outstanding shares, PLUS WARRANT! Could this be the Gap needed to be closed. The per share offer is lower than once thought by SEO and hence a lot of warrants will be issued to satisfy the GAP.
Sneak
Krom: Sorry, I was not more specific. Chrome 308 million, Atlantic Bank Nigeria 60 million, Offer 4 million (This boards assumption with the R&R deal), New shares 107 million, That is almost 57% of the outstanding total shares that will be 830 million, Plus any amount of outstanding shares owned by Nigerian interest and not detailed in any report known, Inorder to reach the 66% needed for ownership transfer.
Krom: The AIM listing maybe about allowing other Nigerian Political Interest to share in the prospect of an Intended Monetary Windfall to Come.
JMO
Sneak
Krom: Why should SEO and friends stop at 50% if the drilling results are that good! The New shares maybe a prelude to a company wanting to takeover this Company, By acquiring a 12% position or 107 million shares they lock up 2/3 voting shares with SEO and friends and offset the higher purchase price of any takeover.
Another scenario is they will need money to purchase the balance of their rights in the JDZ and EEZ as well as purchase a small % in an ongoing hydrocarbon revenue stream for the AIM listing and bunker down for the long haul while waiting for production to begin in the JDZ or a buyout that satisfies the largest shareholders.
JMO
Sneak
BB: I believe that those players that dropped out did not do so because of alleged poor drilling results, But the daunting task of financing the JDZ Area Wide Development Project and the time it would take in doing so.
If ERHE is involved in a JDZ wide development plan, It would have to place all of its % rights in the JDZ into the Hat and ERHE would have about a 12% stake in this play.
Here is how I see it, The original estimates of oil in the 9 blocks of the JDZ were 10 to 14 billion barrels of hydrocarbons. That is about 1.1 billion per block on average. The original NSAI numbers for ERHE seem to be based on 654 billion per block. The average of the 9 blocks with ERHE getting 12% would be about 706 billion barrels of hydrocarbons, Hence this may have been the source of the $10 a share statement.
If a consortium were to be cobbled together and the drilling results release, this new Consortium could raise the development cost as Petrobras has done in the open market.
Just food for Thought
Sneak
Danny Boy is still trying to respond to Middy's letter. He is Deep in absent Thought!
Sneak
amj: Maybe they are looking at the Aban Abraham ship. LOL
A little humor does a person good.
Sneak
Poor old ponzi: Halloween is still a few weeks out! There are no Skeletons in that Closet! It is more like a Witch Hunt! BOO!
Sneak
Company Profile
Rodman & Renshaw is a full-service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. Rodman also provides research and sales and trading services to institutional investors. Rodman is the leader in the PIPE (private investment in public equity) and RD (registered direct offering) transaction markets. According to Sagient Research Systems, Rodman has been ranked the #1 Placement Agent in terms of the aggregate number of PIPE and RD financing transactions completed every year since 2005.
Could R & R be the Investment bank that will handle any buy-out offers?
Sneak
Could it be a down payment on an acquisition target? or down payment on part of a producing revenue stream?
Sneak
Rodman & Renshaw got the Cheap shares and warrants, What they do with them is anyone's guess. The clear and present Truth always get Crushed and Gloooooooom & Dooooooooom Conspiracy Theories seem to always Rule the Day!
Take it Easy Man! Stop Beating Yourselves Up.
Sneak
Stop the Bloviating about how bad this move is! Hopefully ERHE will find itself onto the following chart by Rodman & Renshaw.
http://www.ogfj.com/etc/medialib/platform-7/ogfj/energy-ma-update.Par.17254.File.dat/Rodman%20MA%20Update%20Mar10.pdf
The Glass is Half Full!!
Sneak
How many more shares can be sold before Operational Control of this company leaves the grip of SEO and Friends? 5 million shares maybe.
Sneak
Individual block sales are a Non Starter! If that were the case a Class "A" stock for the JDZ and a Class "B" stock for the EEZ would have been setup. The Prospectus, Aim listing and updated NSAI report are All Window Dressing for a sale of the Company to the highest bidder. If SNP or Total are stalling or low balling, I am sure that KNOC would like a larger piece of the Action. They are in the JDZ with the purchase of Dana and would like to enter the EEZ. JMO
Here Kitty, Kitty, Kitty!
Sneak
Careful Krom, Good old Danny boy may say you got the Translation Wrong, They meant to say $1.09 a barrel. LOL
Have A Great Day!
Sneak
Thanks BB for a Very Logical Post. I Nominate "BB" for Ambassador of the Board!
Have A Great Day "BB"!
Sneak
ew: This from the BBC, 2009 December - Nigeria and Sao Tome agree to set up a joint maritime military commission to protect offshore crude oil fields. All this for Dusters Wells, Ya Right!
PN and Danny Boy can say what they want, But the above BBC statement in December of 2009 says it all!
Sneak
China pay $7 billion cash for 40% of Repsol which has 1.2 billion barrels of oil reserves or $15 plus dollars a barrel for 480 million barrels of that reserve.
Sneak
To all the Bashers: The clock is Ticking!
http://www.independent.co.uk/news/world/asia/fears-of-chinese-land-grab-as-beijings-billions-buy-up-resources-2095451.html
Read it and Weep!!
Sneak
Pepsi: The 59.5 number came from TOB spreadsheet listing rights % per block. That is 59.5 % points out of 300 % points. That number assumes Conoil stays in the Game.
Have a Great Weekend
Sneak
This goes to show you that even the bashers are not asleep at the wheel. Just have some fun buddy, There is a Rapper singer named Rashenal. The word coincides with the Terminology coming from management. It is all dumbfounded the SNP text.
Sneak
Come on Middy Play Nice.
Sneak
Yes, I suppose that is another angle to this story, Sounds doable with and the AIM Listing. However, If that was to take place, A sure Fired lawsuit and a SEC investigation will surely ensue. I would like to think that the additional shares for sale are intended to meet our financial obligations (signature bonus) for blocks 5,6 & 9.
I do however find it Quite Interesting that the resolution to blocks 5 & 6 is still open and who helped pick the EEZ blocks, that is the million dollar question or shall I dare say, Quince Essential missing piece to this Puzzle!
Always look forward to your Input.
Have a Great Weekend.
Sneak
kownski: Lets us look at some interesting scenarios. Lets start with the idea of a 4 block development plan. Lets assume $8 billion for development cost for each block or $32 billion in all.
Block 1: all players are in.
Block 2: 25.5% are out or heading out, leaving it up for grabs.
Block 3: 24.0% are out or heading out.
Block 4: 10.0% are out or heading out, assuming Conoil stays in.
So 59.5% of blocks 2,3 & 4 are up for grabs.
Lets us now assume that ERHE gets $10.00 a share or $7.23 billion for its combined interest in the 3 blocks or 51.5%. That would mean that the balance of the percentages left available would be worth $8.35 billion. This is a number IMO that is much to high considering the economics cost of this play and the length of time it takes to make it successful. Using the above buyout numbers for blocks 2,3 & 4, The blocks would have to have 6 billion barrels of recoverable gas, condensate and oil in all.
The other small players have nothing more to offer than the rights they have in the JDZ. SEO has the EEZ plus he may have some Political sway in Nigeria.
Whatever ERHE will get is anyone's guess, But if ERHE is to get the Lion share of SEO asking price, All the other small fish must be remove and the Info about drilling results must be kept under a tight lid until this is done. JMO
Sneak
Longtimer, I agree, Totals entrance into Block 2, should lift the lid of doubt holding down this stock price.
JMO
Sneak
Tam: It could be another Red Herring in order to give credibility to the delays taken place. This type of rashenal is more credible then Danny boy saying the $10.00 statement was $5.00 and the SNP statement is wrong. JMO
Sneak
kaydee: That all sound good, But I prefer to be in the camp that claims that all the smaller fish must be removed from the pond before the Big fish is caught. Having said that, I believe that the added time or delays are related to ongoing talk about their exit from the Pond and at what price. All of the departed have not released any details of their Deals. JMO
Sneak
ewing: Is this the same Guy that said "He did not say $10.00, He said $5.00." Now he is telling us that the plain printed text did not say what it had stated. I'm sorry, But I will rely on the SNP web site instead.
Sneak
Krom: I thought AFREN had something to do with EEL.
Sneak
Strass: On second thought, I am switching to a PIG for the Holiday Meal, It sounds more Appropriate as to honor this BOD and Management Team. The Symbolism will be Stunning!
Sneak
MZ: You are being to kind to them, A fry cook, How about an Ice Bin Loader, No timing needed just wait for someone to scream Ice Please!
Now let us all step back and remember, All this Jockeying for Position over Non Existing Commercial Quantities of Hydrocarbon. Ya Right. Something is Up.
Sneak
Stock: I agree, Don't you find it interesting that the JDZ will auction off the rest of the JDZ block 7, 8 & 9 this coming spring and still no word about the resolution of blocks 5 & 6. I do not know If the Chinese are all to blame. Yes they bought AXC, But AXC controls the Info in the other blocks and has said nothing, Could it be Plausible Deniability? Who Knows? It seems to me that blocks 1 to 4 hold the most hydrocarbons and mum is the word. I look forward to and update NSAI report, Phase two drilling program, EEZ PSC's in the best blocks chosen by WHO? Are Suitor perhaps? I am in a state of mind that at this Thanksgiving we all may have plenty of dressing for our holiday Dinner. JMO
Sneak