Sirius Petroleum Share Discussion Threads

[htrocka2] 22/3/2017 11:53

We could do with a bit more info on the JOA.




Taken from a 'TOTAL' site ( note that the issuing of an EPC required FG approval (NNPC is State owned)
'June 21, 2013:  Total today announces that its subsidiary Total Upstream Nigeria Limited (TUPNI), operator of the OML 130 block, and co-venturers have obtained the necessary approvals from Nigerian National Petroleum Corporation to award the main EPC contracts for the development of the offshore Egina field.'

(EPC..Engineering, Procurement and Construction)

[dr rosso] 22/3/2017 11:50

"The Well Management Contract provides Sirius with the engineering and operational capability to drill, complete, and produce wells in 2017 and Add Energy was instrumental in working with Sirius to secure the drilling contract with COSL Drilling Pan-Pacific Limited."


Each of the above Companies is entirely competent and expert in its own right to manage well operations. Even just ONE of them wouldn't bother getting out of bed to be involved with just Ororo marginal.
So why are all 3 needed? How about multi drilling across multi assets

[bumhammer] 22/3/2017 11:06

Must admit it did come across a bit odd, plus with what seems to be an extra 150m dump from a old legacy holder..
I guess there is a certain amount of faith needed that this Co moves in mysterious ways

[pipelinepete] 22/3/2017 11:05

150k production a day within 2 yearsI'll have what he's having

[sherl0ck] 22/3/2017 11:04

Ave - I'll be the first to admit that I've swayed back & forth over the years regarding whether we're really in it for the longer term or if we'll ring-fence certain assets for the consortium and then disappear.

Our USP seems to be our critical access to assets that other international companies can't access, so on the one hand there's a valid view that we could become an operator and continue to pick off, develop assets and accelerate our growth and shareholder value alongside partners for a long time to come.

On the other hand it's also clear that based on the identities of the partners revealed so far, the overall project must be very large. In which case unless we just end up with a tiny equity share following JOA, our value stake in the expanded consortium could quite quickly become very valuable.

Recognising that logically there's a limit to what additional assets you can realistically keep on acquiring and developing at any one time once you already have a solid portfolio (particularly if large gas fields with significant dev costs are involved) then in a way the unique value that we offer becomes less critical and we might reach a strong value point sooner than later, in which case it would be tempting for both us and our partners to do a deal resulting in us stepping aside.

[sherl0ck] 22/3/2017 10:54

BH - Initially it was unsettling to see a long term holder seemingly so content to turn his back on this opportunity, but I'm trying to retain an open mind as to all the possibilities and overall I'm not currently concerned.

[aventador] 22/3/2017 10:47

I think we will be stuck here a long time yet for any big profits most ltis probably will barely break even on first oil unless massively averaged down.
Be worth the wait for 25-50p IF they get this pipeline and block announced asap plus but how much longer is that wait going to be!

[bumhammer] 22/3/2017 10:45

Does that concern you Sherl0ck or do you see it another way perhaps?

[sherl0ck] 22/3/2017 10:40

What doesn't make sense in any insider share shuffling/snaffling scenarios is Calvet recently opting to take £0.5m in cash rather than bootfilling with loads more cheap shares at 0.5p.

[dr rosso] 22/3/2017 10:32

Yep, should be turning out 60k boepd within 15 months. 30k from each of the 2 projects, with big upside into 6 figures from Project B. By 24 months, shall we say 50k from Proj A Ororo 95 once the H sands are added to production, with 100k from Proj B 241.


Usual way forward is for each Project to be operationalised is through a spv.
Subsidiary of SRSP ie Sirius Ororo 95 Ltd and a subsidiary of Owena O&G ie Owena Energy, take stakes in a newly created vehicle which controls and manages the asset. Likely that a consortium group will want a slice of that pie.
Sirius Petroleum must change its status from Investor to Producer in the circumstances.

[solarno lopez] 22/3/2017 10:20

The day rate for those 3 rigs will be eye watering so the end result must be even more eye watering ..I was going to say floods of tears but some might get the wrong idea !!!

But that is what the result will be waterfalls

[carrbradshaw] 22/3/2017 10:18

Liking your thoughts Dr R - I'm hearing it's going to be a very interesting 12-24 months - at long bloody last!

[dr rosso] 22/3/2017 10:09

Should also be pretty obvious by now that Partner 4 consists of a participating consortium whose big money is required once the initial drills have started and the wells completed. Think East (ex-Crosby guys) and East again (Havoc links). 3 wellheads at $10m a throw, for starters.

[dr rosso] 22/3/2017 10:06

One subtle clue is in the use of plurals. O2 requires ONE wellhead sitting atop a conductor support platform. From one wellbore they can extend mdd over several km and drain all 12 stacked reservoirs, plus the H sands from the multiple wells. So why wellheadS.
This is not just about O2. It's been a case of pre-production on other assets so that a co-ordinated exercise will take place. Imo, all 3 available jack-ups from COSL, those being POWER SEEKER BOSS will be utilised simult, with spud dates synchronised. Those COSL rigs will also be needed for elsewhere in the Delta (see NUOG).

It also means that sufficient multi-asset funding has to be in place for developing each field within Project A (95) and Project B (241).

Lekoil managed to get their Otakikpo marginal up and running in no time. The difference there is that Otak is geographically distant from Lek's main blocks and is treated as a separate project. Tax efficiency becomes hugely important for Sirius, with PPT up at $12 pb. Exemption applies to each project. What this means is that 95 (incl. Ororo) has to kick off with 30k boepd FROM THE START of this PROJECT A becoming operational. After 5 years, they'll be paying full PPT. To start off with say 3k boepd is hugely wasteful of the tax incentive on offer.

Same applies to Project B (241). They'll be wanting 2 rigs working on that, and co-ordinating + maximising flow from well completions.

Back to the beginning. How many wellheads on order? I'd say 3, with 3 rigs for co-ordinated drilling and slotting those wellheads into place. With limited pipeline infrastructure, someone is going to be mighty busy providing a shuttle service for both compressed gas and oil. Bobo's focal point of Ororo is rather misleading in presenting it as a stranded marginal which needs to be underway before anything else can be considered. Ororo is the strategic hub, central to a coordinated plan in which multi assets start to produce together.

How does this fit with massive share shuffling? It doesn't take a genius to work out what the multi-well campaign will look like, so those closer to the action are stuffing their select accounts like no 2moro. Distressed seller, rofl.

[pipelinepete] 22/3/2017 09:43

Might be of interest for some out therehttps://youtu.be/p6ddSA9lrkc

[htrocka2] 22/3/2017 09:43

good post Sher10ck.. and an curious yet interesting point from Bron.

'If sirius can convince add ,cosl,and schlum selling them the story ,then its obvious it could be sold to the market and hence raising money at much higher prices '


It seems a strange thing to say, yet it feels that raising money is not the priority. Getting the fourth element on board seems to be the overriding factor. This fourth element appears to be of such importance that signing Schlumberger was a condition of it being a member. Having thought about this in combination with info from the above posters, I can only come to one conclusion, with Sclum, ADD and COSL on board and signed up, SRSP now hold the Aces and trump cards with respect to money men and their thumb screws, in fact they must be falling over themselves to get a piece of this pie. The only element I can think of that prioritises both Schlumberger and the Finance and was probably instrumental in getting ADD and COSL on board is that Ondo State, who have access to all vacant Marginal Fields, want to come on board. We're already in partnership with the State Vehicle but it looks as if they may want to take up a larger role within the partnership. The head of Owena is the ex Schlum (Nigeria) CEO, hence the entity that no doubt convinced Schlum to sign with SRSP. With the three elements SRSP have at the moment is more than enough to begin drilling at Ororo....but the real prize is access to other fields.....all under some form of JOA.(my opinion only)

Allow me to remind you of and extract from the ex Governor of Ondo State Dr Mimiko's farewell speech.(note the final three words....and 'exploitation' as opposed to 'exploration')

'We have built on assets inherited from past administrations. We have for example, deepened our investment in the Oil and Gas exploitation and in a short while, we shall start earning direct income from one of them.'

[1sonic] 22/3/2017 09:41

Be great though pp and Sherlock to see this at 5pence plus.... Sound Energy shot up on Schlumbereger news yet this stays under a penny - yet we a building a massive project yet the price says we have litre of oil not millions of barrels - We need news!!

[sherl0ck] 22/3/2017 09:25

Another idea is that it's sometimes prudent to not reveal your cards too early, especially if we are engaged in sensitive pre-farm in negotiations on other potential assets. Think of it this way - what happens to the value of a footballer and the likely interest of a host of other clubs when it's openly revealed that Chelsea, Man City or anyone else with deep pockets have expressed interest?

I appreciate that valuations of oil & gas assets are somewhat more stringent and scientific, but there could still be some element of truth in this. Just a thought....

[bronislav] 22/3/2017 09:14

I am not moaning Pete,I am happy with my investment .Its just how I see it which is merely an opinion and of course lots of other posters opinions have merit..What the market thinks of Sirius is likely not what the reality is...
Sol .i don't see any rise in the share price in the near term ,I wish I could be certain of that as what a position to be in ,alas it's all speculation from me but it does get the discussion going and stimulates thought.Like most I will be relieved to see the back of it but not until the time is right .

[sherl0ck] 22/3/2017 09:13

PP - last night I went back over the forum posts for the week immediately following what I think was a key RNS. Guess what I found....moaning, derisory comments aimed at Bobo and loads of fighting and childish name-calling amongst investors. There was very little useful analysis of the actual RNS info and even as of today, the most relevant clues have been completely ignored. "You can lead a horse to water etc...."

[pipelinepete] 22/3/2017 08:58

I don't know why the board tell us anything - all we do is moan

[sherl0ck] 22/3/2017 08:53

Bron - it depends largely on why exactly COSL, ADD, Schlum & No.4 are here. If it's primarily to drill for some crude oil in Ororo and potentially other 'to be acquired' offshore fields, then this is exactly the story that has already been openly relayed to the market in RNSs and via PR....and so far the market has been indifferent, which has probably meant the trade off between raising critically needed funds versus issuing shares has been less favourable for us.

But the consortia partners may well have a bigger plan, which I think is subtly hinted in RNSs, but the specific details of which haven't yet been shared more openly due to what the Board described at AGM as wishing to retain 'competitive advantage'.

So if there are firm confidentiality restrictions and we're operating in stealth mode then I'd question what exactly the Board could reveal that hasn't already been declared and which would definitely ignite the share price?

Spud date? Maybe this hasn't been finalised yet. Ororo deeper sands data & management expectations? Perhaps, but until the drill bit actually enters the H sands they're still only prospective resources. (LEK declared potential access to billions of prospective barrels on their block and the market was pretty indifferent and likely won't align much value until actually drilled). Specific details on other assets? Probably unwise during a negotiation phase and realistically, most companies don't reveal acquisition targets until a deal is complete.

Look at the Seplat consortium which has dragged on for a few years now. We don't even know the partners' identities there, let alone anything about their plans and target activities, which shows just how sensitive and secretive these things can be until everything is signed & sealed.

I actually think the Board have been pretty generous with RNS info this past year. Judging by twitter and other forums, most investors however have only given them a cursory skim read.

[1alfi] 22/3/2017 08:22

Thats correct Sol, until all the equity shares are settled, then positive news flow to raise the share price to a reasonable pre-takeout value ? Sell off Ororo to the fourth partner and then repeat the same method with 241 and whatever else is available in the pipeline of assets. Just idle speculation and wishful thinking.

[solarno lopez] 22/3/2017 07:54

In that case Bron perhaps we should expect a low ball price going forward

[bronislav] 22/3/2017 07:43

If sirius can convince add ,cosl,and schlum selling them the story ,then its obvious it could be sold to the market and hence raising money at much higher prices .The opposite seems to be the case ...get as many shares for the money instead of gettind as much money for the shares..It has a positive angle in the realisation that these sirius shares are in demand although not through the open marketin my view.