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I doubt that this is an issue since it's only 600.000 shares and it's all part of the company's stock options plan. Since we know they're all a greedy lot then I doubt TGC management will pass on an opportunity to get a few more cheap shares...
http://www.marketwatch.com/story/oil-prices-stay-supported-as-crude-trades-at-year-high-2015-04-30
Brent reached 66$ today.
It's looking really good for the next weeks/months - maybe 70$ isn't that far away now.
Also the tipping point in US production is almost reached.
This momentum now makes it a good time to drill.
The options are part of the stock option plan of the company. I doubt management will pass on the opportunity to pick up a few more shares for themselves so i don't think it will be a factor...
Plenty of options to choose if you look at the seismic in the company presentation. They will go for 5 wells.
Don't fret over day to day prices, I know it's frustrating but keep your eyes on the july deadline. And remember: news trumps all and we should have lot's of news before then...
We all know delays are not uncommon in the OTC world so:
frustrating = yes
annoying = yes
Think of the reward for being patient. 92 million barrels of oil should equal to a high enough share price.
That's also what makes it so frustrating for so many here: the potential is enormous and it takes so long to see the company get it realized.
Once the drilling schedule is PR'ed then we know we can look forward to some great things.
It's probably going to drift lower untill the company released it's timeline/drilling schedule, that well end all doubt.
Since the farmout ends in july we should see drilling activity before then since they already have the money for at least 2 wells. The latest PR and company filings state end of qtr2 so june it probably is.
So we wait...
Delays without explanations hurt credibility, I agree. Communication from both companies didn't help since there is almost none so we can only guess as to why delays happen.
I'll wait it out untill july...
the sooner the better, everyone here is anxious for them to get started. Get drilling HENC & TGC !
I agree with the fact that things probably could have moved faster but how much faster is anyone's guess. I've been annoyed by the slow pace as well, frustrating but it's out of our hands.
Remember that they only had finished reviewing the seismic last november when they PR'd that they had identified 8 drilling locations. Since then they tried to get the money for the drilling campaign in an environment where oil crashed.
My guess is there is an opportunistic approach here as well: get as much done with as little money as possible. The longer they waited the cheaper it became to drill a well. So it's been in their interest to wait as long as possible.
Their only real deadline then here is the expiry date of the farmout with HENC which is july. Since that is approaching and oil back on the rise we can look forward to great times.
The hardest part is always the waiting...
Looks like oil bottomed in jan/feb. It's been rising the last month and now is around 60$. Forecasts indeed look good especially longer term.
Untill a drilling schedule is anounced then we can be sure both stocks will go nowhere...annoying for all the dead money. We can't do anything but wait...
"Drilling late this qtr"
Do you mean june then ? I'm getting tired of always slipping deadlines...just like everyone else here.
Welcome to the board. This one indeed has amazing potential, you've entered at a great time just before things get started.
You should get in now since drilling starts next month. Oil probably won't see 100+ dollars again for the next few years. By that time this company will already be sold...
Even with current oil prices the company can get a 100% or more profit margin which should make this company a big money maker. To give you an idea, Total - the european oil major needs a 60$ oil price to be profitable. This company can do it for half.
"The company issued a statement saying its economies in response to the fall in oil prices would save $8 billion in cash, which would allow it to sell oil at $70 per barrel. Ordinarily, its “break-even” price for oil would be over $100 per barrel. But the $8 billion cash infusion means it can sell oil profitably in 2015 for about $40 less, according to Patrick de La Chevardiere, Total’s CFO."
This makes it an ideal take over target.
GLTU whatever you do.
Sorry, I misinterpreted your question in answer to a previous reply.
Yes the answer is correct: TGC will end up owning more acreage after the farmout is complete, this ownership is for the complete licenses so not just for the wells. From the TGC presentation:
"Current farm-in agreement with Holloman and Perseville:
Holloman and Perseville are required to transfer an aggregate
5.83% to Terra Nova on both Petroleum Exploration Licenses
(PELs) for each well drilled to a maximum ownership of 49.83%."
You will find this info as well in the filings for both companies. HENC's ownership will drop to 28% on both PEL's after the farmout is complete.
I checked again just to be sure, I made a mistake: it's actually for the complete 6 well program. From the henc 10K:
"In the event any well drilled in connection with either the initial or optional drilling programs is commercially viable, and Terra Nova elects to complete such well, Terra Nova is entitled to a preferential recovery of one hundred percent of the costs it has paid to drill and test that successful well. Terra Nova is entitled to 80% of production from that successful well until either that successful well has ceased production or Terra Nova has received net revenue equal to the reimbursable costs it has incurred."
But like you said, it doesn't really matter since we all bet on both horses and if they hit, we all win big indeed !
I don't believe TGC will look for new properties or try to build itself into a big local oil company (to start with, they don't have the money). My take is that they will go for the buyout route as well. A clue here is in the recent interview with Carlo Civelli:
"We have told Terra Nova management that we will continue to fund the company either through private placements or by taking a direct interest in the underlying concession, which is exactly what we did in Papua New Guinea years ago. In addition to our large investment in the company, we also owned 20% of the underlying acreage. When the company found a huge gas discovery, we sold our 20% interest to Oil Search Ltd. (OSH:ASX) last year for a very nice profit. We are looking to do the same here."
So far they are doing exactly the same as on their previous company which they sold for 900m. So I'm betting they will sell as well when the right offer comes along.
Then you need to read the farmout details again because your argument makes no sense. After the farmout TGC will end up with more owernship (or control of the acreage as you define it) of the PEL's then HENC. Only if the farmout fails then HENC will own more.
Either way, GLTA of us...let's hope for some good news next week
Hello tchauncy,
It's good to see you back again on the board, you originally led me to this stock a very long time ago. It's always great to read your input.
Like everyone here I own both stocks but I'm betting the most upside to be had will be with TGC.
My theory: I'm guessing TGC will sell another % of their acreage to end up with around 35% of both PEL's. Perseville will also pay it's portion of the drilling costs (so that accounts for 1/3 of the costs).
The share structure of TGC is also 15% smaller so together with a higher ownership % then for me it's clear TGC looks more interesting then HENC.
The currency issue now looks to be a big benefit for HENC but this is not set in stone and will change depending on macro economic conditions.
Like I said, I own both and I'm counting on both to make a healthy profit.
I believe he meant that HENC only receives it's share of the profits of a well after the cost of drilling the well has been recouped by TGC. That is correct in the optional 3 well program, so for 3 wells only.
I've been going through the last TGC filings from march 30th, interesting items mentioned:
"The process of drilling preparation,
including locating and engaging a drill rig and acquiring the required approvals and operational permits,
has commenced. The Company plans on drilling a well in May 2015."
-> drilling in may...
"The Company plans on drilling up to two wells on PEL 444"
-> Only 2 ? That would be a dissapointment.
"The Board of Directors has deferred the appointment of a Chief Executive Officer pending the outcome of
the exploration activities on PEL 112 and PEL 444. The Chairman of the Board of Directors will continue
to serve as the interim Chief Executive Officer."
-> Will we get more news concerning activity on PEL112 as well ? Seismic results or more ?
I've been going through the last TGC filings from march 30th, interesting items mentioned:
"The process of drilling preparation,
including locating and engaging a drill rig and acquiring the required approvals and operational permits,
has commenced. The Company plans on drilling a well in May 2015."
-> drilling in may...
"The Company plans on drilling up to two wells on PEL 444"
-> Only 2 ? That would be a dissapointment.
"The Board of Directors has deferred the appointment of a Chief Executive Officer pending the outcome of
the exploration activities on PEL 112 and PEL 444. The Chairman of the Board of Directors will continue
to serve as the interim Chief Executive Officer."
-> Will we get more news concerning activity on PEL112 as well ? Seismic results or more ?
I hope they will PR their intentions more clearly: is it their intention to only prove reserves or actually get oil wells into production. Producing oil wells will pay for future expenses...
Q for the board since I'm not familiar with how this works: the new S8 form for the stock option plan, are these shares that the company buys on the open market from the current float or are these new shares that will enlarge the OS ?
Let's hope so because end of q2 for a start of drilling is just ridiculous with the july deadline. Not very impressed with the press releases, no details on their plans/financing etc...
New buyers will only come along when these things are set in place with a clear timeline.
HENC news out as well: lease extension:
http://finance.yahoo.com/news/holloman-energys-drilling-campaign-pel444-162500911.html
You also stated saudi a will flood the market with more oil to punish iran. You mix facts with your own assumptions, that is what's bothering me.
No you are incorrect.
Saudi A is the most powerfull member of OPEC, they push their agenda through. That is something else then what you say: ignoring OPEC (BTW OPEC votes by consensus). If they saw no value in OPEC then they would have left OPEC years ago. OPEC is like a union: the more members you have the more powerfull it becomes so it makes from a politically view the most sense to become the most powerfull union member, this makes them de facto the oil price requlator.
It's in Saudi A interest to keep the current UN santions against Iran intact which limits their imports/exports of all goods including oil.
You seem to agree with me concerning Yemen, see my previous reply:
"It's only of strategic interest next to important shipping lines to the suez canal. "
so we only seem to agree on that part, everything else you state is simply wrong.
You make wrong assumptions.
Saudi A is already flushing the market with oil - they will not pump anymore since there are already at OPEC max quota (which Iran is a member of by the way).
Yemen can not, it's a producer of no consequence: around 130.000 barrels. It's only of strategic interest next to important shipping lines to the suez canal.
Question: once drilling starts, does anyone know how long it will take to complete a 5 well drill program ? I know it depends on several variables but maybe we have some drillers here on the forum ? does it take weeks - months ?
59$ is nice but it's unsure if this will last since it's geopolitically inspired. Oil should bottom out in the 2nd quarter so even if it drops back to 50$ then we are still sitting on a 100% profit per barrel. With an avarage 70$ per barrel next year then I think we'll do just fine.
I've updated the ibox, if there are any suggestions then let me know !
Since we don't know all contract details we can't be sure, just guessing here.
Awaiting news...
If you are unsure of your investment then sell. Insiders have put their own money in this venture so i don't see this failling.
90 days before the july end date would indicate a start before april 10th unless henc agrees to a start in may ? I wish they got moving, this keeps getting delayed.
Very interesting interview, thanks for posting
Permits should be done by now so I imagine we can't be far off from any new developments.
Come on HENC & TGC, get moving !